Streaming video service VidAngel has filed for Chapter 11 bankruptcy, according to a press release issued by the company.
VidAngel offers customers the option to stream "clean" versions of movies in order to avoid offending their delicate eyes and ears. The service allowed users to "purchase" a movie from VidAngel for $20, stream a potentially filtered version according to their preference, and then "sell" the movie back to VidAngel for $19. Their argument is that customers "own" a copy of the film while streaming it.
Hollywood disagrees, and they sued VidAngel in federal court in 2016 to stop them from unlicensed video streaming. An injunction was imposed on VidAngel forcing them to cease offering their service. VidAngel has since launched a streaming service that works on top of existing services like Netflix or Hulu, filtering out offensive content, while appealing the injunction in court.
But that legal battle isn't going so well, according to the press release:
VidAngel has been engaged in a protracted legal battle with Disney, 20th Century Fox, Lucasfilm, Warner Bros, New Line Cinema, Marvel and Turner Entertainment. These seven Hollywood studios are seeking to eliminate filtering and choice, arguing that the 2005 Family Movie Act—a law that expressly permits filtering in the home—does not apply to modern devices, and should remain legal only for outdated technology. In response, VidAngel has mounted a robust legal defense. Today's filing represents another legal step to protect the future of filtering.
And VidAngel CEO Neal Harmon issued the following statement:
We have filed a petition for relief under Chapter 11. It's an important step to protect our company—as well as its creditors, investors, and customers—from the plaintiffs' 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.
Hang on. 16 million minutes viewed? That's a metric we haven't seen before. We'll keep you updated on this one.