Dark Zone Network
A Paranormal Themed Interactive OTT Platform.
Overview
Raised: $0
Total Commitments ($USD)
StartEngine
12/12/2018
03/11/2019
$250
Equity - Common
RegCF
$1.00
$3,000,000
2018
Media, Entertainment & Publishing
Playa Vista, California
Raise History
| Offering Name | Close Date | Platform | Valuation | Total Raised | Security Type | Status | Reg Type |
|---|---|---|---|---|---|---|---|
| Dark Zone Network | 03/11/2019 | StartEngine | $3,000,000 | $0 | Equity - Common | Not Funded | RegCF |
No prior online funding rounds.
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Analyst Report 
Summary
This week we are analyzing the market and growth potential of early-stage startup Dark Zone Network.
Notably, Dark Zone Network was founded by the team that brought the public shows like “Ghost Hunters.” Essentially, Dark Zone Network aims to be the premier platform for high-quality paranormal content of all kinds using the most advanced entertainment technology.
At first glance, the business opportunity looks attractive. It plans to be a one-stop-shop for all kinds of paranormal content on the internet and plans to make full-use of leading AR (Augmented Reality), 360-degree VR (Virtual Reality), blockchain and cryptocurrency as part of its offerings.
Dark Zone Network is targeting a niche market: people who are interested in ghosts, UFOs, extraterrestrials, demonology, cryptids, psychic phenomena, and the unexplained. In a word: the paranormal.
DZN plans to power the platform by blockchain and utilize its own cryptocurrency token, The Dark Coin. A unique experience they are aiming to target is interaction in live events and in-person investigation experiences for users.
The concept itself is intriguing. However, the reality of what is being attempted makes us wary. And not just because the market for paranormal content will likely represent a small-subsector of the AR/VR market.
But also because cryptocurrency tokens still have a long way to go before applications like this become mainstream. Additionally, crypto is useful for situations where user monetization or unique ownership models are needed like in real estate or healthcare. However, when it comes to entertainment, the need for a crypto token seems less relevant or necessary at all.
With legal and regulatory hurdles to bare, it may prove challenging and costly to roll out this cryptocurrency token and frankly unnecessary.
More broadly, users looking for premium paranormal-themed content already have a host of options, and we are not sure the team is meeting a unique need. We are not disputing the popularity of paranormal content (horror films are typically very profitable for movie studios), rather we are concerned about widespread adoption and a material upside from the current pre-money valuation of $3M.
Below, we will analyze the drawbacks of the idea and application associated with Dark Zone Network to understand the sustainability of the business.
Commonality of Content
Dark Zone Network plans to provide exclusive high-end content for topics like ghosts, UFOs, extraterrestrials, demonology, cryptids, psychic phenomena, and the unexplained. While the market of users interested in such content is niche, the content covering the topics is the same.
The primary characteristics of the content cover dark places, already known haunted places and houses, dark videos and discussions with Parapsychologist(s) and paranormal experts.
There are already many competitors in the space producing similar content and the question we have to ask ourselves is, will this product be 10X better than what currently exist?
Unfortunately, we have not been able to define why this is 10X better in comparison to currently available paranormal media, and for that reason we don’t think the team will be able to drive outsized consumer adoption.
Targeting Blockchain and Cryptocurrency
The company touts being the first and only paranormal video platform and community on the blockchain. They claim to utilize their cryptocurrency token, The Dark Coin. However, we cannot determine how this coin will provide additional value to their user base.
In fact, we think it only stands to add complexity to the business without adding real consumer value. As we mentioned above, crypto is great for user monetization or unique ownership models, but there is no need we can identify for this in paranormal media.
Additionally, the token has yet to be launched and the team is likely to face headwinds in trying to release such a niche coin especially in the current volatile crypto market.
AR/VR Technology Usage
Broadly, our society has yet to embrace AR/VR technology for entertainment purpose. The technology is still finding it difficult to find a substantial consumer user-base.
Many investors have started to place their dollars into commercial applications, rather than consumer ones, which might hamper the team’s ability to raise additional rounds of capital.
The content itself may be unique compared to other paranormal-themed content, but the focus on AR/VR delivery adds a level of complexity to the development mix and many potential users may not own the necessary equipment to really enjoy the experience.
Adding an additional barrier to consumer adoption in an already niche market seems like a poor decision and one that further limits the upside of the business.
The Bottom Line
As a recommendation, Dark Zone Network is underweight. At present, there are just too many questions to be answered as to its viability.
The company is claiming to be the first content platform on a paranormal theme that will also make use of blockchain and cryptocurrency tokens. However, it is still far away from developing full-fledged technology around the same. We’re also unsure as to why this facet of the business is even necessary. That society hasn’t fully embraced AR/VR technology is another strike against the early-stage company.
The company has one thing going for it – namely, it’s targeting of a loyal, niche market of paranormal enthusiasts. On balance, however, we’re not sure this will be enough to give investors a decent return on investment