A jury on Monday ordered VidAngel to pay $62.4 million to Disney, Fox, and Warner Bros. for streaming hundreds of movies on its service without permission.
The verdict is potentially a death blow to the Utah-based company, which sought to allow family audiences to watch Hollywood fare while skipping past violence, sex, and other objectionable content.
U.S. District Judge Andre Birotte had already ruled that VidAngel’s service was illegal, leaving the jurors to decide only the amount of damages. VidAngel ripped movies from DVD copies, and then streamed them to users with offensive content filtered out. The company argued this was allowed under the federal Family Movie Act, but Birotte did not agree and ordered the service to shut down in December 2016. The company later relaunched a filtering service for Netflix and Amazon, which continues to operate.
The case has been working its way through court since then. At trial, the studios asked the eight-member jury to impose the maximum penalty of $125 million for illegally streaming 819 movies, arguing that the company had willfully violated copyright law. VidAngel’s attorney, Mark Eisenhut, asked jurors to levy the minimum of $600,000, arguing that CEO Neal Harmon and his team honestly believed that what they were doing was legal.
In their verdict, the jurors landed halfway between those two figures.
“It feels like the jury split the baby,” Harmon said in an interview. “It just so happens that halfway in between is not a good situation for us.”
VidAngel is already in bankruptcy in Utah, and has about $2.2 million in the bank. The jury’s verdict — if it is upheld — could force the company into liquidation. Harmon said he planned to appeal.
In a statement, the studio plaintiffs applauded the verdict.
“The jury today found that VidAngel acted willfully, and imposed a damages award that sends a clear message to others who would attempt to profit from unlawful infringing conduct at the expense of the creative community,” the plaintiffs said.
Kelly Klaus, who argued the case for the plaintiffs, noted in his opening statement that VidAngel customers could stream movies for as little as $1 — undercutting services like Amazon and iTunes that had paid for their content.
Harmon said that customers who use the current service will not notice any immediate changes.
“In a matter of months we should have a better picture of what kind of guidance we can give customers going forward,” he said.
Harmon said he was frustrated that the trial did not allow the jurors to decide whether filtering is legal — only the penalty for the violations.
“It wasn’t a trial of both liability and damages,” he said. “Had it been so, it would have been easier for the jury to see our side of the story.”