Streaming movies has become one of the most popular methods to see new feature films and VidAngel seemed to hit on a method that offered this service very cheaply. Three Hollywood studios, Disney, Warner Brothers and 20th Century Fox, have issues with their service however, since they have not paid fees required for VOD (video on demand) and because they have offered streaming movies before any authorized service had access to them.
VidAngel claims that it does not offer a simple streaming service. This company says that it sells a physical copy of a DVD or Blu-ray movie to each customer for $20. At this point, the customer can apply filters if they wish, such as removing nudity or profanity, then they sell the movie back to VidAngel for $19. Once they do this little act of legerdemain they can then stream the movie from VidAngel and watch it on any device they choose. In effect, it allows the customer access to the movie for one dollar.
Because Hollywood allows movies to be released on physical discs before they are offered on video streaming services like Hulu or Netflix, this gives VidAngel an advantage that was never intended, or authorized by the studios. VidAngel made use of this earlier in the year by selling copies of Star Wars: The Force Awakens long before any other online site had it for streaming.
The movie studios are suing on three grounds. First, VidAngel is violating the DMCA by breaking encryption on the discs. Second, they are violating the exclusive rights to reproduce and publicly perform the works in question. And third, by editing out sections of the movie, they are violating exclusive copyright protections, since this is done without prior authorization.
In my opinion, VidAngel is about to get hammered in court. Breaking encryption and offering copies of those discs is a clear violation of the DMCA. Sidestepping the video on demand fees required by the Hollywood studios in this manner will never work in the US, as long as the ban on decryption remains in place.
You can read more on the story at the Hollywood Reporter.
