'Family Friendly' Streaming Service VidAngel Settles With Studios For $9.9 Million

Tech company VidAngel, which touted itself as a family-friendly streaming service, said Friday it has settled a long-running copyright battle with Disney, Warner Bros. and other studios.

In a deal finalized Friday, VidAngel has agreed to pay the studios $9.9 million over a 14-year period. The company also says it won't decrypt, copy, stream or distribute the studios' videos, without permission.

The settlement was approved Friday by a federal bankruptcy judge in Utah, where VidAngel had filed in 2017 for bankruptcy protection.

The deal brings an end to a four-year copyright infringement battle between Disney, Warner Bros. and other studios, and VidAngel.

VidAngel's $1-per-movie streaming service allowed users to censor nudity or violence from videos.

The company purchased DVDs like "The Martian" and "Star Wars: The Force Awakens," and then streamed them from its own servers without obtaining licenses from the studios.

The Provo, Utah-based tech company “sold” movie streams to consumers for $20, but allowed them to sell back the movies for $19 in credit.

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VidAngel said it provided customers with a “filtering tool” that allowed users to edit out objectionable portions of movies.

The company argued its service was protected by the Family Movie Act, a 2005 law intended to allow parents to censor movies by stripping them of inappropriate material.

The Family Movie Act provides that copyright infringement laws don't apply to technology that mutes or hides "limited portions of audio or video content" from an authorized copy of the movie.

U.S. District Court Judge Andre Birotte Jr. in Los Angeles rejected VidAngel's argument in 2017, when he enjoined the company from operating its streaming-and-filtering service.

VidAngel appealed to the 9th Circuit, which also ruled against the company. That court said VidAngel's interpretation of the Family Movie Act law "would create a giant loophole in copyright law."

In March of 2019, Birotte rejected VidAngel's other defenses -- including that its service was protected by fair use principles -- and awarded the studios summary judgment on their copyright claims.

Several months later, a jury awarded the studios $62.4 million in damages.

VidAngel had filed papers appealing that award when it arrived at a settlement with the studios. The company says it will now drop the appeal.

CEO Neal Harmon stated Friday that the settlement will allow the company to emerge from bankruptcy and “expand our mission to help you make entertainment good for your home.”

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