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June 8, 2017

The Angel with the Heart of a Pirate

 

Fast forwarding through a gruesome or scary part of a movie? Replaying a particularly engrossing scene of a beloved motion picture? For years consumers have watched videotapes, DVDs, and now digital movies as they see fit. This freedom has worked well within the law, aided by the Family Movie Act of 2005. But now a filtering enabled video streaming service, VidAngel, would seek to upset that balance just so it can use other’s property without permission to make money. 

VidAngel claims its customers can stream and filter movies for $1. How is that possible? Reportedly, the company copies DVDs to the cloud by bypassing the encryption on the DVDs, then uses those copies to stream unlicensed movies to customers. The company argues that customers are required to buy the DVD but VidAngel guarantees to buy it back after viewing, reducing the buyback price by just $1 from the purchase price, but no DVD exchange takes place. In other words, this seems a thinly veiled scheme to stream movies without a streaming license. 

VidAngel was sued last year, and pled with the court to be able to continue operating during the lawsuit. The court had no sympathy and stopped the operation in December pending the outcome of the trial. Early this year the court held the company in civil contempt as VidAngel ignored the court’s direct order and continued operating. Lawyers will present arguments before the 9th U.S. Circuit Court of Appeals today in Pasadena, California in the original lawsuit. 

VidAngel has tried to sugarcoat its actions, claiming that this dispute is somehow about filtering. That is, company owners argue that intellectual property owners do not want to allow consumers to skip parts of movies they do not like. But the facts argue against their assertion, as other filtering companies have operated successfully without stealing. ClearPlay is one example. Their product filters streamed movies in a way the customer prefers and does so staying compliant with the law. VidAngel instead ignores intellectual property licensing entirely in order to make a fatter profit. 

The real problem with VidAngel is that their business model depends on theft of copyright protected property. The argument about filtering is merely a red herring. There is no right to take a creator’s invention and do with it what you like without legally compensating the owner. 

Consumers do have the right to enjoy a myriad of freedoms when it comes to viewing videos, including legal filtering, and can always decide to not make a purchase. That, too, sends a signal to markets. This is the approach, rather than theft or thinly veiled legal schemes, that preserves markets and property rights, both of which are critical to grow the economy.


 

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