VidAngel, the Utah-based streaming service that filters out offensive content for faith-and-family audiences, has agreed to settle its long-running copyright dispute with several major studios for $9.9 million.
A Utah bankruptcy court approved the deal on Friday, which allows VidAngel to emerge from bankruptcy and continue to operate.
The company appeared to be doomed in July 2019, when a Los Angeles jury ordered it to pay $62.4 million to Disney, Lucasfilm, Warner Bros. and Fox for infringing on hundreds of titles. As recently as a year ago, the studios argued that VidAngel would have no choice but to liquidate.
The deal brings an end to the four-year legal battle over “filtering.” Under the agreement, the company will drop its appeal of the jury’s verdict.
In an interview, VidAngel CEO Neal Harmon called the agreement “bittersweet,” because he had hoped for vindication from the appeals court.
“Sometimes it’s better to do what’s right than to be right,” he said. “We just finally decided it made too much business sense. It’s not worth taking the brain damage of all the litigation.”
VidAngel launched in 2015, allowing viewers to watch major Hollywood releases while skipping past sex, violence, foul language or other objectionable material. The service did not have a license from the content owners — instead, it ripped copies of DVD releases and made them available to customers for a rental fee as low as $1.
The studios filed suit in 2016, arguing that VidAngel was pirating content and engaged in unlawful competition to authorized streaming services. VidAngel countered that its conduct was permitted under the 2005 Family Movie Act.
A federal judge was unconvinced and ordered VidAngel to shut down, though the service later relaunched with a model focused on filtering content on Netflix and Amazon Prime. That model has not faced legal challenges.
Under the agreement approved on Friday, VidAngel will agree not to stream any of the studios’ content. The company will also pay off the $9.9 million settlement amount in quarterly installments over 14 years.
The deal also allows VidAngel to pay off the award early for a reduced sum — $7.8 million — if it abides by the terms of the agreement for three years.
Harmon said the service now has several hundred thousand subscribers under its Netflix filtering model.
“We offer filtering for all the studios except the plaintiffs,” he said. “We don’t offer it under the technology when we were sued… Our business works totally differently than it did then.”