Tech
Disney does NOT “partner” with crypto companies
On Tuesday I wrote and posted at column breaking the news and reflecting on Dapper Labs’ recently announced tie-up with Disney, the historic, century-old entertainment company that, under the leadership of CEO Bob Iger, has become even more of an intellectual property powerhouse and technology follower. This article contained some errors.
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Most embarrassingly, I misspelled the last name of one of my sources, Ridhima Khan, vice president of partnerships at Dapper Labs, and misattributed one of her quotes to CEO Roham Gharegozlou. Such errors have been corrected and are regretted.
More importantly, however, a central claim of the article – that Dapper and Disney were “partners” in a venture called Disney Pinnacle, which will license Disney IP and sell digital tokens modeled after collectible pins – now appears to be incorrect.
According to Rachel Rogers, public relations manager at Dapper Labs, on Thursday, two days after the story was published:
“Also, Disney has not launched the Disney Pinnacle platform. Dapper Labs created in collaboration with Disney. Can you update? Disney doesn’t use the word partner: it just collaborates or teams up with.”
The news was picked up and cited by a number of widely read tech news outlets, some of which received similar calls from Dapper to remove the term partner from the registry. I’m writing this story, in part, to correct the situation: Disney isn’t working with Dapper. Disney, which did not respond to a request for comment, will likely never partner with a cryptocurrency company.
Instead, Disney is licensing its IP to Dapper. The terms and conditions of the agreement are not known. When asked, Dapper said: “Like all of our partnerships, we cannot comment on financial breakdowns.” I asked in a few different ways, at a few different times in a call with Khan and Gharegozlou as well as in follow-up questions sent via email.
It’s not unreasonable to think that “a Disney-authorized partner,” as Dapper initially described the deal, might pay for the privilege. Such financial deals are not uncommon in the world of NFTs. What is licensed is valuable property.
In a call, Gharegozlou and Khan suggested that Disney has been in close contact with Dapper during the development process, even though Dapper is doing all the construction. The mobile app hasn’t launched yet, only the waiting list opened on Tuesday.
In my article, I basically argued that this project could have the potential to be one of the few non-embarrassing NFT experiments. I argued that Disney has a large fan base, full of people who like to collect Disney junk. It makes sense to work with recognizable content that people already have an emotional connection with, rather than convincing them to buy what could be described as a JPEG with a blockchain pointer.
Otherwise you’ll end up with something like Bored Ape Yacht Club, because it’s almost impossible to build a brand from scratch. And the Yacht Club is essentially the most successful “bootstrap” NFT project to date, if you want to call paying or otherwise enticing celebrities to load up their bags.
I mean, as I argued, even Dapper’s previous experience could be called a success by cryptocurrency standards. NBA Top Shots, where Dapper pioneered the concept of licensing beloved intellectual property to sell tokens, doesn’t see much action today, but it was once essentially the crown jewel of Dapper properties and a significant part of the reason so Dapper was, now in hindsight, comically overrated.
Assuming Disney Pinnacle is still happening, although it appears that Disney has reprimanded Dapper for claiming to have “collaborated” in a cryptocurrency capture, it could also be successful. People buy Disney products even though they are often inherently worthless, and it’s not yet clear whether Disney fanatics have as visceral a hatred of NFTs as they do some consumer segments, like gamers.
It might work! And if it does, it will be as much thanks to Dapper’s design work as Disney’s ownership. But it’s not a partnership.
I’m not really sure why Gharegozlou, Khan, and Rogers were all so adamant about calling it a partnership. The term has been used a lot. And I made sure to ask multiple times and in different ways how to describe the working relationship precisely because crypto companies often incorrectly use the term partner or exaggerate in their relationships with established brands.
For example, I’m pretty sure I’ve seen a company call a Google Cloud subscription a deal. Ethereum relies on Amazon, but Amazon is not a supporter of Ethereum in the traditional sense.
And I get it, at least in Dapper’s case I’m sure it was an honest mistake. Khan said she went to Disneyland nearly 20 times as the main connection and reason for the lack of collaboration between Disney and Dapper. I enjoyed talking to them and thought Gharegozlou was unusually sociable for someone in her position.
. But I find the request to substantially reconstruct history morally questionable. As I told Rogers in an email, “I cannot change the quotes and I cannot change the fact that partner/partnership was the term used by Roham and Ridhima and in the company’s written communications.”
I can’t change their quotes. At the time of publication the information was accurate. Our job is not to do favors for companies, and if we accepted this request it would open a glass jar for every time a source says something on the record that he or she later regrets.
The part of the job I like most is calling things by their name. Another of Dapper’s shameful requests was to change a comment made about “investing” in NFTs when asked about the differences between digital and tangible collectibles. I understand, discussing NFTs as financial assets opens up a regulatory attack surface. But to suggest that you can INVEST in physical pins but only COLLECT digital ones is foolish.
NFTs are investments, they are treated like investments, and in my brief communications with Dapper we talked about them as investments and collectibles. And in the absence of solid information about the “pins,” such as whether they carry perks like discounts or Disney opportunities, presumably one of the main reasons to buy one is because it might increase in value.
Dapper isn’t alone here. Cryptocurrencies have an honesty crisis. The industry is not only riddled with fraud, literally measurable fraud, but it is also in the business of deceiving people. Cryptocurrencies are a technology without a use case, which promises to solve every problem, and which has failed in almost every way. The purpose that cryptocurrencies are actually useful for (buying things online that you don’t want on your credit card statement) is completely underappreciated.
There’s no way a decade of misrepresentation won’t end up causing collateral damage. In many ways it already has. Cryptocurrencies have a bad reputation, and not even interestingly, in a way that denotes low social standing and dishonesty. And for good reason. Millions of people have collectively lost billions of dollars. A technology that should be to attach it to humans is obsequious.
In other words: Cryptocurrencies are petty and untrustworthy. He is the George Santos of financial technology.
And it won’t get better until its leaders prove honesty. Pretend it’s a profession.