I used to do a poor-mans version of that with low-bitrate mpeg4 (ASF or divX) movie downloads back in the day; the resolution would be low, and the MS MP4 codec

I used to do a poor-mans version of that with low-bitrate mpeg4 (ASF or divX) movie downloads back in the day; the resolution would be low, and the MS MP4 codec tended to blur as well (plus noise killed the quality so much that there was often a denoiser in the encode pipeline), so adding any noise to the playback significantly improved the look of the movie.