VidAngel Keeps Streaming Videos, Defying Movie Studios and a US Judge (deseretnews.com)

The Deseret News reports that Hollywood studios "aren't happy with VidAngel, saying in a statement Wednesday that the Utah-based streaming service 'continues to illegally stream our content without a license and is expanding its infringement by adding new titles' despite a judge's recent injunction." Or, as VidAngel explains on their blog, "We say we're legal. Disney says we're pirates." Long-time Slashdot reader goombah99 writes: VidAngel...will edit any major movie of objectionable content exactly as you request (and no more than you request), then stream it to you for $1. Such bowdlerizing and DVD streaming services are expressly written into section 110 of Title 17, the copyright act (paragraph 11 added in the 2005 Family Viewing act). Therefore both aspects that the studios are suing over, the streaming of a DVD and the editing of it by a third party, is plainly legal... There's a petition to save this act from encroachment [signed by more than 30,000 families].
In just five days in October, VidAngel raised $10.1 million in a "mini-IPO" -- reportedly the fastest one ever -- to fund their ongoing fight against the movie studios. VidAngel CEO Neal Harmon says "We'll take this all the way to the Supreme Court if necessary. We're happy to pay more. We're happy to rent more. We're happy to pay the prices the studios want us to pay. Just give us filtering."

Comments

Good legal argument, but not a bonafide sale

[raymorris]

Their legal argument is better than I expected it to be. However, there are two big problems with their argument:

As another commenter pointed out, they claim to sell the video for $20, then immediately buy it back for $19, they also stream it the customer (bandwidth costs) and edit it (server farm / cpu costs). It's quite obvious they're charging $1 to stream it to you, the "sell it for $20 and buy it back for $19" is a gimmick, it's bullshit. Nobody is buying movies from them, they're paying $1 to stream it.

Their fair use argument regarding DMCA is bogus. They claim that bleeping some words is "transformative", but the relevant portion of the fair use test is if they transform it to a different type of work that DOES NOT COMPETE with the protected work. For example, one may make a sculpture from CDs, or use book pages as wallpaper - nobody is going to buy your wallpaper *instead of* the original book. People WILL choose to stream from Vidangel *instead of* an authorized source such as Netflix or Amazon.

Lastly, the transformative aspect is only *one* part of the four-prong test for fair use. Other considerations include "is it commercial?" They are indeed selling the streaming, doing it commercially, so on that basis it's unlikely to be fair use. It's not educational, etc. It really doesn't match the definition of fair use well.

Re:Good legal argument, but not a bonafide sale

[Solandri]

I'm not saying their legal argument will hold up, but:

As another commenter pointed out, they claim to sell the video for $20, then immediately buy it back for $19, they also stream it the customer (bandwidth costs) and edit it (server farm / cpu costs). It's quite obvious they're charging $1 to stream it to you, the "sell it for $20 and buy it back for $19" is a gimmick, it's bullshit. Nobody is buying movies from them, they're paying $1 to stream it.

This is exactly how the videotape rental market worked. A store would buy the videotape of the movie, you'd borrow it from them, give them a deposit for $20, take it home, and watch the movie. Then you'd return it to the store and get your deposit back, minus a $1 rental fee. The dollar amounts are different, but the concept is the same. (Deposits were later moved to a hold against your credit card if you signed up for membership at the store.)

The studios sued the first video rental stores about this too. They claimed it was going to destroy their income stream, but within a decade something like half their movie income was coming from rentals. The compromise which got them to drop the lawsuits was that the rental stores had to buy "special" rental videotapes. These were identical to the movie videotapes you'd find for sale at a retail store, but typically cost 3-5x more. That was their way of getting a bigger slice of the rental market pie. (This was also why if you lost a tape, the fine was substantially more than the cost of a new tape or DVD at a retail store. The store wasn't overcharging you as many people believed; they were charging you exactly how much the tape cost them.)

Where I see them running into problems is that buying a DVD doesn't give you streaming rights. I think the distinction between the two is BS (probably why they're doing this), but copyright law as it currently stands gives distribution rights to the copyright holder. So a physical copy sent to your home is different from a software copy streamed to your home; even though they both result in sending the exact same bits to your home.

Also, wasn't there a Supreme Court case where a company offered to censor your movies if (say) you wanted all the swearing bleeped out? The studios sued saying they hadn't authorized this alteration of their copyrighted work, and the SCotUS agreed.

Re:Good legal argument, but not a bonafide sale

[phantomfive]

Also, wasn't there a Supreme Court case where a company offered to censor your movies if (say) you wanted all the swearing bleeped out? The studios sued saying they hadn't authorized this alteration of their copyrighted work, and the SCotUS agreed.

The primary difference here is that VidAngel is not editing anything. They send you an EDL, and you fast-forward automatically through the parts you don't want. VidAngel still sends all the bits to you.

Where I see them running into problems is that buying a DVD doesn't give you streaming rights.

Buying a DVD does give you rights to format-shift from DVD to something else. So VidAngel is selling the DVD to people, and format-shifting it to digital for people, and then delivering it to them. The end-user has the option to take physical delivery of the DVD, have VidAngel store it forever, or sell it back as a 'used' copy for slightly cheaper.

That's their way of attempting to get around the legal problems. Presumably if they lose this case, they (or someone else) will try to find yet more loopholes in the law until they finally find something that gets through a court. Maybe a supreme court stacked by Trump will be more amenable to censorship? I don't know.

Re:Good legal argument, but not a bonafide sale

[Anonymous Coward]

If state sales tax is actually paid on the $20 then it is not BS.
They could then re-credit on the 2nd stream of $19 and pay 10 cents odd state tax on that.

Either way the state gets a chunk of change, not pretend money the movie studios do not pay.
Holding the physical property and remotely serving it is no different than SaaS cloud services.

Re:Good legal argument, but not a bonafide sale

[wvmarle]

\

Buying a DVD does give you rights to format-shift from DVD to something else. So VidAngel is selling the DVD to people, and format-shifting it to digital for people, and then delivering it to them.

This is exactly where I see this may go wrong for VidAngel. It's not you (the DVD owner) doing the format shifting, but someone else. Probably no-where in the law is written explicitly that this is OK so there may be room for legal argument, especially as the physical original never gets shipped to the new owner. Gotta be interesting to see what happens, even more so if they start to ignore national borders and go worldwide (why wouldn't they be allowed to sell a US original disk to me living in Hong Kong?).

Re:Good legal argument, but not a bonafide sale

[link-error]

Aerio lost the supreme court hearing where they had a seperate HD atenna for each user and claimed to just restream the content.. http://mobile.nytimes.com/2014...

Re:More info needed

[phantomfive]

Again, I don't see how buying one physical disk allows you to stream that movie to an infinite amount of people,

They don't. It's an attempt to streamline the (older) Netflix model. They buy multiple DVDs, and send them out. When you are done, you send them back.

Except, they realize a lot of people (basically, everyone) don't want the physical DVD, so they also offer the option to stream the video for you, and keep the physical copy in a 'vault' until you want it. As an added service, they also ship you an EDL file of your choosing, which the user can apply at their home in their personal player (I believe they do this automatically if desired as well, but it's a standard feature: mplayer supports EDL, for example).

So basically all the parts of their plan, selling DVDs, re-buying, ripping for personal use, personally using an EDL, etc are all legal. No one has ever combined them together, though.

From a moral standpoint, I don't think people should be forced to watch things they don't want. From a practical standpoint, the movie studios are more than happy to offer censored movies to airlines. It's not about 'censorship', it's about money.

Re:More info needed

[transporter_ii]

MP3.com tried this with audio CDs. Aerio also tried it, in a slightly different way. They will lose this in court. MP3.com had a ton of lawyers go over their plan and said it was legal. When they lost everything in court, MP3.com ended up suing the law firm that told them it would hold up in court. I never heard the outcome of that lawsuit. These things that are sort of legal for you to do, they don't hold up when a third party tries to make a business out of them. Not going to work.