Hollywood Studios Are Suspicious of VidAngel's New Filtering App

VidAngel Screenshot - Publicity - H 2017
Courtesy of VidAngel

VidAngel hopes for a comeback, but three major Hollywood studios say not so fast. 

The family-friendly streamer was dealt a blow when a judge ruled last December that Warner Bros., Disney and 20th Century Fox were likely to prevail in a copyright lawsuit and issued a preliminary injunction. Now, VidAngel is touting a new app that allows customers to filter out language, nudity and violence from movies and television shows, but the three suing studios aren't satisfied and in court papers filed Tuesday, hint that VidAngel may still be operating an illegal service.

The injunction order is currently before the 9th Circuit Court of Appeals, which is entertaining arguments whether the Family Home Movie Act of 2005 allows VidAngel to buy physical DVDs, circumvent access controls for the purpose of filtering naughty bits, then "rent" them to customers via streaming.

VidAngel, though, isn't waiting around. On June 13, the company launched its newest service with much fanfare. 

After hearing studio lawyers talk about technology that filters licensed streams, VidAngel came forward with a technology that it maintains does exactly that. 

"Out of the gate we’ll be supporting Netflix and Amazon and HBO through Amazon channels," said VidAngel CEO Neal Harmon, adding that Hulu, iTunes and Vudu will follow. "The studios are getting their streaming fees and they’re getting windowing the way that they want it."

VidAngel then went back to the court with a motion to clarify the injunction order. 

The studios respond that VidAngel is flouting a procedural rule requiring proper notice.

"VidAngel has sprung the motion on Plaintiffs and the Court in a manner that short-circuits any ability of Plaintiffs to investigate — or the Court to assess — whether VidAngel’s 'new' service complies with the Preliminary Injunction," state studio court papers. "Plaintiffs know some facts about VidAngel’s service, and those facts raise significant questions."

Warner Bros., Disney and Fox point to a declaration from VidAngel general counsel David Quinto where he describes how VidAngel purchases a motion picture from a service like Amazon Video before the film is tagged and a copy is then saved to a cloud storage location. 

"[I]t appears from Mr. Quinto’s declaration that VidAngel itself is streaming from its own 'master' copies of works that VidAngel has created on its own servers rather than layering its filters over an authorized stream from the licensed streaming services," writes Glenn Pomerantz, attorney for the studios. "In other words, VidAngel indisputably itself is publicly performing works to its users."

The plaintiffs say that wasn't explained to them when they first heard about VidAngel's new service via email. The studios remained silent when VidAngel asked for consent and didn't publicly react to VidAngel's launch announcement, but that doesn't mean they are OK with VidAngel's new filtering app.

"Plaintiffs and the Court are not required to accept VidAngel’s assertions about how its new service operates at face value," they tell the judge. "Given VidAngel’s past misstatements and omissions regarding its service, there is all the more reason to allow Plaintiffs to conduct targeted discovery of the new service, including an inspection of the service by Plaintiffs’ expert, before requiring Plaintiffs to take a position on VidAngel’s motion or, if necessary, requiring the Court to decide the motion."

The studios also outline "key questions unanswered": Does the new service purchase a digital transmission for every customer or one master copy? Does it purchase a digital download or rent a stream? How does the technology ensure its content library matches that of the licensed service from which the customer has supposedly purchased a stream? How is VidAngel protecting against piracy? Is VidAngel using any quality-control measures? And so on.

The court brief adds, "VidAngel is only subject to an injunction in the first place because it violated Plaintiffs’ rights. Then, as now, VidAngel claimed that its actions were perfectly legal. There is therefore no harm to VidAngel from having to wait for discovery and an orderly presentation of all positions on the Motion to Clarify before VidAngel is allowed to use hundreds of Plaintiffs’ titles as a draw for its new service."