VidAngel files for bankruptcy protection — from its own customers

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  • the_perfect_day Salt Lake City, UT
    Oct. 25, 2017 11:36 a.m.

    VidAngel's behavior _after_ the injunction does not indicate a defendant likely to get leniency.

    1) After the injunction ruling the court found VidAngel in contempt for not abiding by the court order.
    2) The court recently ordered sanctions against VidAngel for filing a frivolous motion.

    Even if the court just fined VidAngel $900 per DMCA violation (which is just 36% of the maximum fine of $2,500 per violation), it still creates a very high number:

    (1,000,000 violations) x ($900 per violation) = $900 million fine.

    This isn't going to end well for them or any of their creditors or investors.

  • St George Guy Washington, UT
    Oct. 24, 2017 5:30 p.m.

    So if Vidangel loses what would be reasonable damages to the studios. Assuming the studios would have made $5 per stream (a big assumption, probably much less) and vidangel streamed 1 million videos that would be a total of 5 million they could of possibly lost out on. That is actually more than they really would have lost since they made money on all the DVD's Vidangel bought. But lets give them the benefit of the doubt and say they lost 5 million. That's really nothing for Vidangel. I'll bet Vidangel would pay that to them now if it would go away. Which wont happen. The real issue will be the fines. I assume the fines as some else noted could be $200 per infringement to huge fine per infringement. My guess is because vidangel was making an attempt to pay for the content through DVD's it wont be the most severe, but it probably wont be the least either. I wouldn't be surprised to see fines be equal to damages. Im no legal expert but I'll bet they are on the hook for 5-15 million. If the fine gets too big Vidangel goes away and nobody gets paid.

  • Kelly, San Diego, CA San Diego, CA
    Oct. 24, 2017 3:21 p.m.

    Let’s do some math. Each violation of copyright can lead to a fine of $250 to $2,500. Unlicensed streaming is a separate copyright offense. VidAngel streamed a million movies. If half are from the studios bringing suit the total fine is $125 million to $1.25 BILLION. VidAngel copied movies to their servers and circumvented copy protection each of which is a separate copyright violation adding $7.5 to $75 million. This is just a start of the fines and payments that could be imposed. Ultimately the actual amount is up to the judge and could be substantially less than the sums mentioned above.

    The point is VidAngel is in bankruptcy because it can’t pay back a little less than $5 million to its customers. Even assuming their current business model is legal, that only generates $8 or $9 per customer per month, that won’t be enough to stay in business, pay back its customers and pay the fines and penalties that will be imposed. Chapter 11 will likely be VidAngel's last chapter

  • Frazier North Salt Lake, UT
    Oct. 24, 2017 2:54 p.m.

    Other streaming services negotiated with studios and had to charge $3-$5 per film in order to turn a profit. Along comes VidAngel who charges $1 for the same film (plus filtering). How much did VidAngel pay the studios per streamed movie? Do the math. VidAngel undercut legitimate streaming services by not fully paying for content.

    Equally damning is a complete disregard for studios' right to choose which streaming service they partner with. Netflix had to pay Disney to stream Marvel movies. It's valuable enough that HBO spends millions to produce its own content (Game of Thrones, Netflix for Stranger Things, etc.). Along comes VidAngel who, without consulting anyone, takes that content and starts streaming it. VidAngel stole content that Netflix, HBO, Hulu had to pay for and, again, charged $1 per film.

    No surprise that VidAngel could undercut other services. The only site able to match VidAngel's pricing was The Pirate Bay.

    And now VidAngel is using bankruptcy to keep the $5m it owes its customers. Not to mention the millions it took from "investors", at triple the valuation that venture capitalists had recently paid and a few short months before the lawsuit. What a scam!

  • DKC Salt Lake City, UT
    Oct. 24, 2017 2:24 p.m.

    Rifleman
    Google plagiarism today VidAngel: It’s Not About Filtering ~ Its about © Copyright Law

    1. Copyright Infringement: The courts believe that the buying and selling of titles on VidAngel doesn’t really transfer ownership for the purpose of first sale. In short, the court believes that the “sale” isn’t real, making the streams an infringement.
    2. DMCA Violations: Second, in order to rip the films and stream them, VidAngel must break the DRM on the DVDs they own. Under the DMCA, such circumvention is an infringement and the Family Movies Act makes no exemption for that.

  • Rifleman Salt Lake City, UT
    Oct. 24, 2017 2:08 p.m.

    @Impartial7 - DRAPER, UT
    How was VidAngel ripping off Hollywood? Was Hollywood cheated out of one single dollar??

  • Kralon HUNTINGTON BEACH, CA
    Oct. 24, 2017 1:36 p.m.

    I think it is embarrassing for Hollywood that they can't fulfill customer desires. I think it is 90% or more about profits and 10% or less about "artistic integrity".

    Too bad VidAngel couldn't make it work out, I would have paid for their service. It is interesting that I learned of VidAngel, just shortly before they got sued, from a neighbor who isn't LDS. He told me that he found them after he had had it with the "obligatory" pushing of the envelope by Hollywood of what he considered morale and decent in plot, language, violence and sex.

  • DKC Salt Lake City, UT
    Oct. 24, 2017 1:17 p.m.

    Correction 17 years prior post don’t you love autocorrect?

  • DKC Salt Lake City, UT
    Oct. 24, 2017 12:54 p.m.

    If you go to copyright law remedy you will see it is anywhere from $250 to $2500 per infraction. The more VA pokes in the eyes Hollywood & 9th Circuit Court one could assume the remedy will increase. Number of customers per movie per device per month times the number of months. My calculator doesn’t go that high. VA customers may never see refunds!

  • DKC Salt Lake City, UT
    Oct. 24, 2017 12:46 p.m.

    Meanwhile so called “Christians” continue to make excuses for supporting an illegal enterprise instead of supporting the filtering company in UT that has been filtering “legally” for 17 hrs! Look in the mirror how’s your soul doing?

  • St George Guy Washington, UT
    Oct. 24, 2017 10:57 a.m.

    So the options Vidangel has is file Chapter 11. If they lose the lawsuit they can then survive. If they survive their current customers get to keep what they want, the studious get paid their damages, and past customers get paid what they owe. If they don't file Chapter 11 and lose they go out of business. Their current customers lose, the studious don't get paid, and their past customers don't get paid. It seems like the best option for everyone involved.

  • the_perfect_day Salt Lake City, UT
    Oct. 24, 2017 7:59 a.m.

    @Woohoo
    A quick search of VidAngel and Refund shows it has been hit and miss. Some getting their refund and others seeking a refund and not hearing back from VidAngel.

    I've heard of at least one person getting a refund on their investment in VidAngel. I applaud VidAngel for doing that, especially since the VidAngel investment video was launched just a few months before the court found their ripping and then streaming of the DVD movies to be illegal.

  • Woohoo Somewhere, ID
    Oct. 24, 2017 12:39 a.m.

    @the_perfect_day

    "Definitely seems like one of the motivations for filing the bankruptcy is to protect VidAngel from their customers, potentially their “largest liability.”"

    Uhh...VidAngel ceased operations of their previous service back in December of last year or January of this year from what I recall. These customers have had I would say at least 9 months to claim back their funds and VidAngel has been pretty forthright with their customers of the previous service that have had the ability to do such. I know because I was a customer and I did claim back my funds from their previous service.

    I won't presume to know what exactly they plan on doing with such funds after their legal proceedings. Some people were fine with VidAngel keeping their funds because they felt their funds were being used to help further VidAngels aims to build a cloud filtering service and to further their legal efforts to establish filtering technology.

  • bassoonlady OREM, UT
    Oct. 23, 2017 11:40 p.m.

    The sad thing for me is that they give filtering a bad name, asserting that people have the "right" to watch filtered movies on any platform they want, even if they have to break the law, or terms of use, etc. to do so. It will be that much harder for new companies to come in and win the trust of the public, even when doing things the right way. So sad.

  • the_perfect_day Salt Lake City, UT
    Oct. 23, 2017 11:00 p.m.

    @Woohoo
    "It really doesn't seem THAT much different than Redbox charging a dollar or two to rent movies from their boxes across the country."

    When you rent a movie from Redbox you receive a physical disc. Redbox doesn't rip the disc, copy the movie onto a server, and then stream the movie to you without paying streaming royalties. Therein lies the problem.

    It doesn't matter if VidAngel purchased 1 disc or 1 million discs. The laws prohibit the ripping, copying, and streaming of discs. They can't legally do that for one disc, just the same as they can't do that for 1 million discs.

  • the_perfect_day Salt Lake City, UT
    Oct. 23, 2017 10:51 p.m.

    In the Bankruptcy filing, VidAngel’s director of finance told the Court:

    “VidAngel has approximately 250,000 current and former subscribers owed an average of approximately eighteen dollars ($18.00) each for a total aggregate amount in excess of $4.7 million in credit for VidAngel services” (See document 2 filed on Oct 18, 2017 for case 17-29073).

    The director of finance goes on to say that, “if it became a cash liability, [it] would be one of VidAngel’s largest liabilities.”

    Definitely seems like one of the motivations for filing the bankruptcy is to protect VidAngel from their customers, potentially their “largest liability.”

  • Woohoo Somewhere, ID
    Oct. 23, 2017 10:08 p.m.

    @Impartial..

    "So. Do we now have proof that this "wholesome" Utah company is built around illegal actions? But now, they're ripping off good families in Utah."

    Built around illegal actions? The company LEGALLY bought movies for EACH customer that wanted to watch a movie streamed filtered.

    It really doesn't seem THAT much different than Redbox charging a dollar or two to rent movies from their boxes across the country.

    "It was fine when Uthan's thought VidAngel was ripping off Hollywood. "

    Where are your stats supporting that Utahans support ripping off anyone?

    "But now, they're ripping off good families in Utah. Now what?"

    In reality..they aren't ripping off anyone. It was widely publicized that VidAngel was offering refunds. I personally didn't have much issue at all getting my money back from them.

    All that they are trying to do now is limit the amount of liability they are required to pay to the studios for damages studios may or may not have incurred.

  • Brent T. Aurora CO Aurora, CO
    Oct. 23, 2017 8:28 p.m.

    Several years back a Mormon Ad poster depicted a delectable looking sundae with a cockroach crawling in it -- referencing media with just a little bad in it. The idea behind VidAngel is that the sundae is edible if you remove the roach (after it's been in there). Or rather that there is a dearth of media and other things to occupy free time such that partaking of corrected, but still imo tainted, materials is essential.

    Those that make suitable family entertainment, while mostly outside the popular spectrum, need no filtering.

    The obvious market opportunity, mostly it seems in Utah, of those who feel popular media is essential, that they're missing something (wanting to be just that more "in the world"), is ripe for the scam that was VidAngel. Sad (and disappointing) to see Studio C sucked into/a party to this as well.

    Apparently (and it seems they're right) the company assumes the fleeced sheep will buy into this "we're protecting our customers" nonsense. It's bankruptcy (one type, legalese). Still amounts to the failure of a business model with reorganization (IE emerging with a new name with no obligation to honor the old businesses' debts).

  • Utah Girl Chronicles Eagle Mountain, UT
    Oct. 23, 2017 8:06 p.m.

    VidAngel isn't taking people's money. They are subtly editing, filtering, and altering people's money so feeling ripped-off is more palatable.

  • Impartial7 DRAPER, UT
    Oct. 23, 2017 6:23 p.m.

    So. Do we now have proof that this "wholesome" Utah company is built around illegal actions? It was fine when Uthan's thought VidAngel was ripping off Hollywood. But now, they're ripping off good families in Utah. Now what?