A recent Facebook conversation caused me to rethink the legality of the streaming service VidAngel. I won’t be considering the filtering aspect of the service, because my concern is that the underlying streaming is not legal.

Their sales model is a little convoluted since you actually buy the movies for $20 and can then sell them back for $18; they explain that you need to own the movie to be able to filter it. Essentially rentals are $2, which is half the price of rentals from Google or Apple. I had assumed that they were selling streaming licenses and had direct relationships with the major movie studios. However, what they actually sell you is a DVD.

“VidAngel provides a service that allows its Users to buy or sell physical media, such as DVD and Blu-ray discs. While a User owns any physical media purchased from VidAngel, VidAngel will provide streaming services to permit the User to stream the Video Content associated with that physical media as many times as desired…Using the VidAngel Services, a User may purchase physical media from VidAngel, whom then stores the physical media in VidAngel’s physical media vault.” (VidAngel Terms of Service 5.2)

Their whole business model reminds me of a site that does something similar with video games. Console Classix lets people pay a monthly fee and then borrow any game that is available. They keep track of how many copies of the game they have, and only allow those copies to be played. They’ve been around since 2001, and almost instantly were contacted by Nintendo. They claimed that they weren’t just a rom downloading site, and have probably stayed small enough that Nintendo never bothered to launch a stronger legal assault. It always seemed like a neat way to combine a library with a reason to preserve the decaying cartridges.

Is it legal?

Does selling you a physical disc entitle VidAngel to stream the content to you? I doubt it. All you really get is a disc that you can play in a DVD player. Amazon’s closest version of this feature is a “Read While Your Book Ships” that lets you read a small sample of the eBook. This may be the same sample Amazon already provides for free.

How does VidAngel get their digital copies? Presumably they use the physical copies that they own. However, ripping DVDs and BluRays is mired in controversy. Even if backing up a movie for personal use can be claimed as fair use, does that protection extend to a company producing digital copies to stream to customer?

They do adhere to inventory control, where they only rent out as many copies as they have physical discs. Their FAQ mentions that some movies may appear to be out of stock.  

I’m worried that this amounts to VidAngel being sued for massive copyright infringement.

Is it ethical?

I think so. Their service is essentially the same as RedBox, without the need to actually visit a machine and retrieve a physical disc. The experience that the customer has is exactly the same. 

What’s in store?

VidAngel hasn’t been sued yet, and I think it’s because they haven’t been noticed yet. That lawsuit is coming. But if they can shake that off, they will have other problems. As they grow bigger, they will run into problems acquiring enough discs to meet customer demands. Redbox had the same issue and couldn’t get enough stock from Target and Wal-Mart. For their pricing model alone, they will face the same problems that RedBox had getting established

I’ll continue to use VidAngel because of the price and the convenience. (I’m not sure how I feel about using the filters, but I can just ignore them for now). I wouldn’t buy any stock in the company though.

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