VidAngel, the content filtering company currently in a protracted legal battle with the major Hollywood studios, has filed for Chapter 11 reorganization, but will stay in business, at least for now.
VidAngel changed its model -- following a court injunction -- from one of buying, copying and editing DVDs (to remove sex, violence and language) and delivering them online to subs for a fee. As a way to resolve the legal issues with the online DVD delivery, which studios said violated their copyrights and messed with their release windows, now it's providing edited versions of content on streaming platforms -- Netflix, Amazon Prime and HBO.
VidAngel also launched its own studio last January.
VidAngel has said the studios are trying to eliminate filtering, which it argues is protected by the 2005 Family Movie Act, though courts have not seen it the same way.
Related: VidAngel, Studios Battle in Ninth Circuit
The company called the bankruptcy filing the next step in trying to protect filtering.
“We have filed a petition for relief under Chapter 11," confirmed VidAngel CEO Neal Harmon in a statement. "It’s an important step to protect our company — as well as its creditors, investors, and customers — from the plaintiffs’ [studios'] efforts to deny families their legal right to watch filtered content on modern devices. It also gives us breathing room to reorganize our business around the new streaming platform, promote and perfect the new technology, and seek a legal determination that the new system is fully legal and not subject to the preliminary injunction entered in California.
“It’s important for our fans to know that VidAngel will continue to offer our filtering service, and to add new content and new customers during the reorganization process. We are also actively hiring additional engineers to further accelerate the continued development of VidAngel. Our original series, Dry Bar Comedy, is exploding and has had over 16 million minutes viewed in the last 7 days. Our customers can filter movies on Amazon, Netflix and HBO on Amazon, and we still have millions in the bank to fight this all the way.”
The Ninth Circuit Court of Appeals in August denied VidAngel's appeal of a preliminary injunction blocking the company's content-filtering service, which was granted to studios by the Los Angeles District Court, just the most recent in a series of court defeats in its battle with Disney, Fox, Time Warner and LucasFilm.