VidAngel prepares for battle with some of Hollywood's largest studios; here's what you need to know
Posted July 19, 2016
The demand for family-friendly entertainment is nothing new. While some Hollywood directors and producers have answered calls in recent years with projects that attempt to court faith and family audiences, the output is still relatively small.
That’s why the 2015 launch of VidAngel — a service that enables families to filter out objectionable content from feature films and TV shows — has attracted so much attention.
But in addition to gaining accolades, the concept has also yielded a high-profile legal challenge that copyright experts are sure to watch closely in the coming months.
The VidAngel concept was birthed by internet entrepreneur Neal Harmon and his brothers Daniel, Jordan and Jeffrey. Neal Harmon, who serves as VidAngel’s CEO, said that they set the groundwork for the company after considering the potential impact that movie and TV content would have on their kids.
“We’re fathers and we have young children,” he said. “We love content and good content, but we also, with young children, really don’t want to introduce them to certain things until later in life.”
Harmon, 38, said that the rationale for their plan was simple: create a tool that would protect kids from various forms of negative content, allowing parents to control the “kind of influence” that entertainment would have in their homes.
Why major studios are fighting back
While VidAngel sees its service as a beneficial tool that families can use to protect their children, a number of high-profile Hollywood studios see the situation quite differently.
In fact, Disney, Lucasfilm, Twentieth Century Fox Film Corp. and Warner Bros. Entertainment filed a joint lawsuit against VidAngel this month, arguing that the company has been illegally streaming content.
“VidAngel is an unauthorized streaming service, trying to undercut legitimate services like Netflix, Hulu and iTunes that license movies and TV shows from the copyright owners,” Disney, Warner Bros. and Fox said in a statement.
The studios argued in their court filing with United States District Court in Los Angeles that VidAngel’s service “looks and feels” like other streaming services, but that it does not pay studios for streaming rights, unlike other services.
"VidAngel appears to circumvent the technological protection measures on DVDs and Blu-ray discs to create unauthorized copies and then uses those copies to stream Plaintiffs' works to the public without authorization,” the complaint alleges.
The lawsuit goes on to say that it doesn’t matter whether VidAngel is selling or renting movies, proclaiming, “In either case, VidAngel would need copyright owner consent to circumvent access controls on protected disks, make copies of that content and stream performances of the content to the public.”
How it all began
VidAngel’s roots trace back to 2012 when Harmon, who lives in Provo, Utah, and describes himself as a “self-taught tech guy,” began tinkering with different ways to make the concept a reality, testing out his ideas on “Cinderella Man,” one of his favorite films.
In the end, his testing worked and he was able to bypass some of the “strong language” in the film. At the time, Harmon said that he used a "rudimentary (editing) system that provided a proof of concept" for VidAngel's future start.
His first attempt at editing video included a tool with no user interface that operated through keyboard commands — a complicated process that worked only on a desktop browser with standard-definition YouTube content.
Though the first filtering concept was a success, the idea sat until 2013 when Harmon and his brothers began working more fervently on getting VidAngel up and running; when the public platform later launched, audiences almost immediately offered praise for the tool.
Rather than making transformative edits to movies and TV shows, VidAngel’s current technology — which is proprietary and received a patent from the U.S. Patent and Trademark Office — relies upon a tagging system.
The company starts the filtering process by using consumer requests, box office results and other internal metrics to choose titles that are then sent out to a team of trusted "taggers" from across the U.S. — people who come together to collectively flag expletives, sexual content and other inappropriate content.
These "taggers," who are not employees of VidAngel and are regular viewers of the content that they have agreed to tag, then parse through the content and mark various portions as inappropriate.
"The movie goes through three revisions before coming to our office to be 'staged,'" Harmon explained. "The final and fourth pass ensures that the tags reach our quality standards. Then the title is published to the website."
It's a process that can take anywhere from 36 hours to weeks to complete, depending on a title's importance.
“VidAngel’s service is unique in that we don’t make a fixed copy of the altered version of the work, we just stream a custom filtered version of the movie … based on the user’s preferences,” Harmon said. “So the user gets to choose everything that they want to omit from the work.”
The company publishes only one version of each film or TV show, with the tags that were created during the process collectively formulating a “vidmap” — a tool that helps VidAngel describe potentially questionable content for subscribers.
Harmon said that his team, which consists of 45 employes who work in Provo or from home and 78 contractors from across the country, also adds a notice before each film that lets viewers definitively know that the cleaner version of the movie that they are watching is “not as intended by the director or copyright holder.”
The VidAngel concept is based on a pay model in which users log on and purchase a standard-definition film for $20. If they sell back the movie within 24 hours, they end up receiving a $19 credit, meaning that they’ve essentially watched the film for just $1.
"VidAngel warehouses the discs on behalf of the customer unless they request to have them shipped to them," Harmon explained. "Sell-back is optional to the consumer, if they decide not to keep the movie for good."
Despite the legal challenge, VidAngel argues that its service is empowering families to exercise their rights, saying that users who watch films and TV shows using VidAngel are doing so within their own homes, calling the operation entirely “lawful activity.”
Harmon said that the company has a balanced view on content creation and consumption — one that he said looks to protect the rights of both the content creator and consumer.
“We don’t try to make a moral judgment … we say, ‘Look, copyright holders, directors, people who create the content, we wouldn’t have content without them. They are free to go and create a message that they want to portray to the world,’” Harmon said.
But he said that the situation changes once that content is coming into a family’s home, arguing that he believes “parents’ rights trump the director’s rights.”
“[Parents] have the First Amendment right to control and to introduce speech to their children as they choose,” Harmon argued.
Around the time that the company launched last year, Harmon said that he sent letters to major studios letting them know how the product worked and explaining why, from VidAngel’s view, the operation is on solid legal footing.
While he said that some companies responded and requested more information, they eventually dropped off the radar and “didn’t show to phone meetings.”
“They never said anything that they felt like anything we were doing was wrong — that they felt it should have been done differently,” he said.
Months later, Disney Lucasfilm, Twentieth Century Fox Film Corp. and Warner Bros. Entertainment joined together to file the lawsuit.
A violation of copyright law?
Harmon and his team are planning to fight back, pointing to federal law that they say backs their operation, namely the Family Home Movie Act of 2005, which is a sub-portion of the Family Entertainment and Copyright Law of 2005.
The law essentially creates an exception from copyright infringement that allows for limited changes to the audio or video in movies when viewed in a private home. No "fixed copy" of the film can be created, though technology can be used to make amendments to movies for home consumption.
In the VidAngel case, the studios argue that the company doesn't have the right to "circumvent the technological protection measures" on movie discs. Disney, Fox and Warner Bros. said that the case has nothing to do with “whether filtering is lawful” and nothing at all to do with the “legal uses of the Family Movie Act.”
H. Troy Romero, an attorney who is not involved in the VidAngel case, but who represented the now-defunct CleanFlicks in the company's highly publicized copyright case, said that, though he has not read the complaint against VidAngel, he believes that VidAngel’s arguments hold merit.
“As I understand, VidAngel’s technology is — they don’t make a copy and I think that’s a critically important distinction,” Romero said. “They’re just taking the streaming and you say what you want to have edited and they edit it for you, but they don’t make a copy for you.”
CleanFlicks was a video-editing company that came under fire from studios for making edited, "family-friendly" versions of films available to consumers. It was a process that involved making digital copies of films from VHS or DVD and editing them using software.
In the end, the company was shut down, with plaintiffs arguing that it had violated their rights under section 106(2) of the Copyright Act. But VidAngel believes that its technology — which doesn't need that same editing process — is used in compliance with the law.
Ryan Baker, a lawyer with Baker Marquart — the firm that is representing VidAngel in the case — said that a response to the studios’ complaint is currently in the works.
“We are confident in the legality of VidAngel's filtering service, which is at the heart of this case and importantly seeks to protect an individual's legal right to filter unwanted or offensive content from Hollywood films on modern devices,” Baker said. “At this time, I cannot comment further on the litigation proceedings."
These issues aside, Harmon argues that VidAngel is actually financially benefitting the studios by making films accessible and consumable for families who might not otherwise have watched them due to objectionable content.
“The main point we’ve been making to the studios all along is that we’re adding an incremental market for them,” he said.
Harmon declined to comment on VidAngel's profits and the current number of subscribers, but affirmed that DVD and Blu-ray discs are purchased for each customer and are stored in the VidAngel vault. In that regard, he said that "the studios are compensated by the purchase of these discs."
Meanwhile, the studios are seeking unspecified damages, attorney fees and a trial jury in addition to seeking VidAngel’s profits as well as a demand that the company stop streaming their films.
"VidAngel charges users for watching that content but has no authorization and pays nothing for the rights it exploits," the complaint reads. "At its core, VidAngel is no different from many other unlawful online services."
The studios took particular issue with VidAngel's decision to make "Star Wars: The Force Awakens" available on its platform when other video-on-demand services didn't yet have the ability to do so.
In the midst of emerging and evolving technologies, the VidAngel dispute is sure to be closely watched by legal and copyright experts. Either way, it's a case that Harmon says has profound implications for consumers.
"VidAngel's mission is to ensure that filtering exists in the digital age," he said. "If we fail to achieve our mission, the greatest damage would be to customers. That is the worst-case scenario."
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