Selling Alterable Versions of Star Wars Is Still Infringement, Says Court (arstechnica.com)
A federal court ruled that video-on-demand streaming service, VidAngel, which enables the filtering of objectionable content to make it family friendly, is breaking U.S. copyright law. Ars Technica reports: VidAngel buys movie discs and decrypts and rips them. It then streams versions that allow customers to filter out nudity, profanity, and violence. In doing so, it breached the performance rights of Disney, Lucasfilm, 20th Century Fox, and Warner Brothers, the court ruled. VidAngel purchased a disc for every stream it sold, some 2,500 titles in all. "Star Wars is still Star Wars, even without Princess Leia's bikini scene," the opinion said. Just because objectionable content is removed, that doesn't necessarily transform the content enough to allow this type of behavior under a fair use analysis, the court wrote Thursday. VidAngel also unsuccessfully argued that it was protected under the Family Movie Act (FMA) of 2005. That legislation allows the cracking of encryption to remove objectionable content so long as no fixed copy of the altered version is created. The court didn't agree, however, because VidAngel didn't have the permission in the first place to stream the content.
The service actually sells the DVD to the customer for $20. After the customer is done with the DVD, they sell the DVD back to VidAngel for $19. So, in fact, the DVD is the customers at the time that the customer is using VidAngel's service to stream the customer's DVD to the customer's PC.
Not germane to the current cast, but I should add, VidAngel's current incantation uses streaming services, and instead of a the whole buy/sell DVD method, there is a flat monthly fee of $7 for access to the service, and a customer can watch as much content as they have access to.
It works like this: Customer signs into VidAngel account. Customer then signs into streaming service via VidAngel's website (Amazon, NetFlix, and HBO steaming services are currently supported). Customer then streams any show they would otherwise have access to stream from Amazon (including ones they rent/buy, or have "free" with their Prime account), NetFlix or HBO, but with the filters that they have selected within VidAngel.
There is no reason this couldn't work with other streaming products a customer has access to via VUDU, Hulu, etc. The product is in fact licensed to stream to the customer, and the customer is using a player (VidAngel) to skip/mute the objectionable parts.