Judge Andre Birotte ordered the company to cease operations on Dec. 12, issuing an injunction at the request of Disney, Warner Bros. and 20th Century Fox, which have complained that the service is pirating their content. The company sought a stay of the injunction, but on Thursday Birotte rejected that request, prompting VidAngel to shut down.
“It is not a fun time for us right now,” said Neal Harmon, the company’s CEO, in an interview with Variety. “It is definitely causing us harm… This is traditionally the biggest time of the year for movie watching. We have hundreds of thousands of customers planning on watching filtered content, and instead this is what they get.”
In seeking the stay, Harmon had warned that an immediate shutdown would create a customer service nightmare. VidAngel allows customers to watch mainstream movies while filtering out objectionable content such as nudity or offensive language. Customers “buy” movies for $20, watch them on VidAngel’s site or its streaming apps, and then “sell” them back to the company.
As of now, all commerce on the site has shut down. Harmon said that customers who cannot access their movies can get their purchase refunded, or may receive an unfiltered DVD copy of the movie in the mail. Customers can also cash out their VidAngel credit. Harmon said that so far, only a few customers have asked for disc shipments. There has been an increase in cash-outs of store credit.
“There have also been people who said, ‘I want to donate my credit to the litigation,'” Harmon said.
The company contends that filtering is explicitly permitted under the Family Movie Act, and has vowed to take its case all the way to the Supreme Court. Company officials are referring to the shutdown as a “hiatus.” David Quinto, the company’s general counsel, said that if the Ninth Circuit Court of Appeal were to grant the company’s request for an emergency stay, then the site could be back up and running within weeks.
But in the meantime, the company is also planning to offer licensed content on the site in the near future. The company has already announced plans to distribute a handful of family-friendly independent movies. It also is preparing to offer a “behind the litigation” documentary about VidAngel, as well as family-friendly standup comedy performances filmed at the VidAngel headquarters.
The company recently raised $10 million in a crowdfunding campaign, and is planning on using that money in part to upgrade the service and prepare for a relaunch. The company, based in Provo, Utah, has guaranteed that none of its employees will be laid off for at least 30 days, according to Quinto.
“Our company has the cash to weather the storm,” Quinto said. “So we’re not going out of business. We may have a lot of work to do to try to regain lost customers and restore customer confidence. And it’s vitally important that we try to hang on to all our employees.”