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VidAngel: Public Invested $10 Million To Help Defend Against Studios’ Suit

11/14/2016 8:00 AM Eastern

An embattled content-filtering company has given new meaning to the term “angel investors.”

 

Utah-based VidAngel, whose goal is to make family-friendly moderations to Hollywood content, says it has raised more than $10 million in what it was billing as a “record-setting” mini-IPO (initial public offering).

 

It was seeking $5 million and actually got $10,123,986 from 7,553 “angels.”

 

The company could use the money, given that it is defending itself in a lawsuit — VidAngel says it is willing to go all the way to the Supreme Court — filed by The Walt Disney Co. and other major Hollywood studios in California district court over the technology, which lets users filter language, violence and nudity out of movies and TV shows. A hearing is set for Monday (Nov. 14) on the studios’ effort to block the service.

 

VidAngel — which says it pays for DVD copies of the movies it then preps for streaming and easy editing — argues that it is only giving users the ability to more effectively filter content shown in their own homes.

 

The studios argue VidAngel is illegally modifying and streaming their content. And while VidAngel buys the DVDs, the studios, in their legal complaint, say the company has not bought the rights to distribute that content online, is making unauthorized copies to deliver on unauthorized streams and is “no different from many other unlawful online services.”

 

That action can interfere with the studios’ windows of distribution. For example, says the complaint (to which Lucasfilm is a party), VidAngel offered Star Wars: The Force Awakens online for $1 “when lawful VOD services [Netflix, Hulu] did not yet have the right to offer that work for a single-day access at all.”

 

VidAngel actually sells a copy of a DVD of a movie or TV show for $20, which the buyer can stream online and edit out the naughty bits — then VidAngel will “buy” it back for $19 in credit toward the next DVD. “[O]ur model provides families remote filtering of DVDs/Blu-ray Discs they own under the Family Movie Act of 2005,” a company spokesperson told the Wire.

 

VidAngel has produced a number of YouTube videos (with Wire-like attitude, we might add) to argue its case.

 

For example, in “Does VidAngel Ruin Art,” their answer is yes, and no. “Yes, for some people VidAngel ruins art,” the video narrator, a young, flip fellow, says. “They might say skipping nude scenes in Schindler’s List alters the directo’s vision and makes the artistic experience worse. If they feel that way about every movie, VidAngel probably isn’t for them. But, no, not everyone feels that way. So, VidAngel improves their artistic experience by exposing them to art they would not have seen otherwise. … People who don’t filter aren’t godless heathens out committing human sacrifice and people who filter aren’t prudish religious zealots also committing human sacrifice.”

 

The California court will have a chance to decide whether or not to clip VidAngel’s wings and see its service sacrificed to the copyright gods.

 

Colorado Votes: Many More for Muni

 

Readers of The Wire (and who isn’t?) will remember there were a bunch of initiatives on the ballots in Colorado, including Aspen, to pre-empt restrictions on municipal broadband buildouts.

 

The Institute for Local Self-Reliance (ILSR), which was pushing for passage, said that all 26 of the initiatives passed, bringing Colorado’s total to 95 communities opting out of the cable-backed state law limiting buildouts except in areas that don’t already have broadband service.

 

“We didn’t need a crystal ball, magic potion, or ESP to predict that local Colorado voters would enthusiastically reclaim telecommunications authority yesterday,” blogged Lisa Gonzalez, with ILSR’s Community Broadband Networks project.

 

Crystal balls weren’t that useful in the general election anyway.

— John Eggerton

 

Trump Has Already Been a Bummer for TV (Ads)

 

President-elect Donald Trump has already disappointed many media companies — the ones hoping for a big bump in political ad sales, especially after the hype over the successful Obama campaigns’ targeted strategies.

 

Pivotal Research analyst Brian Wieser thinks total TV spending on political in 2016 will fall below 2012 (the last presidential year) and be up only around 10% vs. 2014. He told the Wire top cable operators Comcast and Charter Communications (pro forma for Charter’s Time Warner Cable takeover) brought in around $120 million in political ads in the third quarter, versus about $105 million in the 2014 period and $140 million in Q3 of 2012.

 

At the local ad-sales level “everyone is way off” their budgets this year because of political, an executive at a company in the sector (who asked not to be named) told the Wire. That’s ominous for 2017 when there are no Olympic Games or big political races to soak up inventory, the executive said.

 

Bucking the trend: Viamedia, which sells local ads for smaller cable providers and the likes of Verizon Fios TV and Google Fiber. Spending on other races more than made up for Trump’s parsimony, it said. Clinton outspent Trump by a ratio of 9 to 1 at Viamedia, which saw political ad revenue rise more than 50% vs. 2012, per CEO Mark Lieberman.

— Kent Gibbon

 

What the Shirt?

 

One good sign last week was that the Amazon.com link to buying the “Rope. Tree. Journalist.” T-shirt that was, famously, sported at a rally for now President-elect Donald Trump (see cover story) was no longer functioning at press time. Fortunately, reporters covering Trump still are.

— John Eggerton

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