VidAngel Uses Chapter 11 Protection to Pause Los Angeles Lawsuit to Reorganize Its Business Around The New Streaming Model

UPDATE: We have created a special page to keep everyone updated on the chapter 11 process.

VidAngel is still up and running. And generating millions in revenue.

 

Chapter 11 reorganization can be bad news. But in VidAngel’s case, it’s good news for VidAngel and filtering.

 

First, chapter 11 is simply a reorganization and part of our legal and business strategy. Per federal law, chapter 11 reorganization automatically pauses our lawsuit with Disney and the other plaintiffs in California.  This strategy also allows us to continue our new lawsuit in Utah, where we are seeking a legal determination that our new filtering system is legal.

 

Second, VidAngel is not going away. To the contrary, our new VidAngel system for Netflix, HBO, and Amazon is up and running. We have millions of dollars in the bank, and are now generating millions in revenue. Our original series, Dry Bar Comedy, is exploding and has had over 16 million minutes viewed in the last 7 days. If you are a customer, you will be able to continue to use VidAngel to filter movies in your home using your Netflix, Amazon, and HBO subscriptions.

 

Third, this filing should give us time to take care of our customers and investors. Thousands of our customers invested $10 million to help VidAngel win the legal fight. We want to ensure that VidAngel continues to grow like gangbusters so that the many families who took a chance on us get their investment back – hopefully with a good return.

 

Remember, our new VidAngel system is growing rapidly. Our goal here is to reorganize the business around our new streaming model, which means pausing the lawsuit long enough so that, even IF VidAngel eventually loses the lawsuit on our old system, we have enough revenue from our new system to pay any damages to Disney. That way, VidAngel can survive and reap a return for the many thousands of customers who invested in us.

 

Finally, we want to emphasize that this is Chapter 11 reorganization, NOT Chapter 7 bankruptcy. Chapter 7 is for companies going out of business. Chapter 11 is to protect companies that just need more time and flexibility to pay their obligations. Many companies, including Marvel, General Motors, and Delta Airlines have filed Chapter 11 reorganization and emerged as thriving, healthy companies. That is VidAngel’s plan, and we just took the first step.

 

To recap, VidAngel is:

 

  1. Pausing the California lawsuit
  2. Up, running, and making millions
  3. Exploding (over 16 million minutes viewed in last 7 days)
  4. Working to make a return for our investors
  5. Taking the same path as Marvel and Delta

 

We want to thank our customers and investors for all their support. We will keep you updated as we continue this legal battle – if necessary, all the way to the Supreme Court.

 

Onward,

Neal Harmon, Co-founder and CEO

59 thoughts on “VidAngel Uses Chapter 11 Protection to Pause Los Angeles Lawsuit to Reorganize Its Business Around The New Streaming Model

      1. Hi Neal, Just sent a substantial donation to help your efforts. Keep up the good work. We should all stand behind what you are doing to support you. Please contact me about more.

  1. I could also use some clarification on this. Does this mean the plaintiff works are going to up on the site? And what will be the next stage of the litigation of filtering disc method ?

      1. so are you going to pick up the lawsuit again or is it just the new mode from here on in? and if so what happened we will never stop the fight

        1. We continue to fight for your right to filter on modern devices. The case in the Utah court has been very quiet. We will update you as soon as we hear any news from the Utah judges.

  2. Hi Neil,
    Investor and supporter here. I want you running the company to success rather than getting bogged down in questions but if you have a moment and the answers wouldn’t put the company at risk I’d appreciate the answers to a few questions.

    With Chapter 11, you will have time to grow revenue while putting a pause on the lawsuit. I understand it could give VidAngel time to pay a judgment, but is VidAngel also in need of further funds for the lawsuit itself or are we still on track with the funds raised during the investment?

    The lawyer mentioned at the news that VidAngel was back that while excited about the opportunity under the new model, it would be key for filtering to win on the original argument and that is the prize. After seeing the response under the new model, is the thought on that changing? I hear a lot of positivity from you on the filtering as a service to streaming customers model now.

    How does profitability compare between the two models?

    Once you’ve cleared the legal way, is there enough barrier to entry time for VidAngel to grow before competition can reap the financial benefits?

    On a technical level, is the streaming provider using the bandwidth or VidAngel for the bulk of the media for the “last mile” to the customer? Didn’t know if there was any cost savings there, or if you still had to eat the streaming cost to be able to provide a filtered video.

    Finally, when was the last or next disclosure filing for investors (or are you even required to file them)? Other than a VidAngel and a couple other things, my 401k is the only place I invest so I’m not sure how to find those type things.

    Regardless of whether you feel comfortable answering these in this forum or not, I appreciate the operations of the company and wish you much success.

    1. Justin, very thoughtful questions. I appreciate you taking time to ask them as I’m sure others have asked similar questions. While I can not answer all of them at this time, we have put together a page with all updates around the filing as well as frequently asked questions inspired by your post and others.

      Here’s the new page for updates: https://blog.vidangel.com/chapter11/

    1. Watch us.

      “Actions speak louder than words. Words cost nothing. Actions can cost everything.”
      ― Aleksandra Layland, Of Wisdom and Valor: The Art of War. The Path of Peace.

  3. Neal Harmon, I understand you guys are facing a terrible lawsuit, but that does not mean you have to put your costumers aside. I loved old VidAngel, but now your services does not appeal to me anymore. So, please, I am only asking to receive my $19.00 back. I have already sent many emails to support@vidangel.com but I only receive automatic answers, I can’t call you guys because the only phone number I found on the Facebook page does not work, FB messages is the same, only automatic answers and after that you guys wont answer our next questions. I am sure if someone was trying to subscribe you would give them much more attention, well, I am just asking you to accept my decision to not be your customer anymore at this time and pay me back. I am extremely disappointed the way you guys are handling my situation, this is only going to make you guys lose customers and appreciation. So please, just give my money back I might one day start using your services again.

    1. Wesley, I sent a message to the head of customer support to reach out to you. I’m very sorry that you were not able to reach us sooner. I assure you that it was not intentional. We are unable to cash out credits unless and until the judge enters an order giving us permission. That is not to say that if you did use the cash out button earlier that we did not process your cash out before the filing. Our support team should be able to help you find that out.

      We have done our utmost to take care of customers, honoring cash out requests since the day we were enjoined. While cash outs will need to be paused for the time being, in fact, this filing actually protects customers from having a judge prioritize the studios over customers. It also ensures that a chapter 11 reorganization judge balances the interests of all parties as this is worked out.

    2. Are you a professional costumer? Do you just do Halloween costumes, or do you do costumes for movies, etc.? Why does VidAngel need costumers?

  4. You have this customers full support. Your service is only becoming more important. I watched a Star Trek episode last week with two F bombs! Please keep fighting for us.

  5. Studios offer edited versions to stores, network tv, prisions, airplanes and many other places. The studios just wont offer them to the public for purchase or rent. The law does allow this. I can understand to a point not selling physical media but now that digital distribution is very prevalent, and the studio already has edited versions, and the law allows it (studios always had the right) there really is no reason not to make these available to the public. Just like regular and extended cuts of a movie. Pick which ever one you want to watch. Vid angel is just doing what the studios should have done long ago.

    Thank you for your fine service. I have some ideas that could take your service to another level, along the lines of what you offer that a coder and debugger could probably have working in a few days if your interested. I would love to implement them myself I just don’t have the coding knowledge. You have my email from this comment if your interested.

    Keep fighting the good fight.

  6. Is this going to work in Canada as well? The old version of Vidangel did, but now because of the new version , I could not play the videos. I was told by support that Canada is not able to stream now. Is this issue going to be resolved?

  7. Hey we love vidangel its the only way we watch movies. I remember when y’all first announced the new system with netflix and all that, you said it was coming to PS4 do you know about how long it’ll take for it to come to PS4 thanks and y’all keep it up.

  8. Do you know why Roku has removed the beta vidangel from channel lineups and will not let it be reinstalled? I want to keep your service, but not if I cannot access it.

  9. Upon hearing of this I was mortified. Now with this explanation I am grateful you’re still going, and sounds like strong as ever! Amazing the resilience you have as a company of faithful, mission focused people keeping promises to us, your customers. It will make a great movie someday that will only need filtering when showing the bad guy’s legal teams cursing incessantly. Can’t wait.

  10. You’ve mentioned that this move of reorganization will help with having to pay damages if you lose this lawsuit. I’m curious, what is your contingency for VidAngel movies I own in your vault? What happens if you lose the disc filtering case to all the vaulted movies. I know currently we can trade in for credit or pay to ship them, but I’m curious if you’ve thought about that end scenario. Maybe you could ship them back to us or swap them for digital copies on Google Play so we could still filter the movies. Just throwing ideas out there. Thanks

  11. Our can people support you. Are there petitions that can be signed. How dare Hollywood want to MAKE people listen to swears without asking if they want to first. We should have that right to watch a movie without cursing. I think this should be widely publicize to the Christian community as well. I didn’t know anything about this service and happened to fall on it.

    I would like to start posting your site on FB and hopefully start a chain so that people can support you guys.

    Please let me know how I can do my part to help

  12. Have you heard of the service/app Movies Anywhere, which puts users’ purchased digital movies from Amazon, iTunes, Vudu, and Google Play into one library? If so, are any steps being made to allow streaming through Movies Anywhere? I’m also interested in being able to filter movies I’ve purchased on iTunes. Any plans in the future to allow that?

    The whole reason we recently subscribed to Netflix was because we’d be able to filter many of the videos there. Watched the first episode of Stranger Things last night, all cleaned up thanks to VidAngel. Every enjoyable! Thanks for your great work!

    1. Connect your Movies Anywhere account with your Amazon account, and all of the videos that show in your Movies Anywhere will show up under Amazon Video here on VidAngel in your Video Library for you to stream.

  13. I really like how you keep everyone updated with these types of communication. It’s a model that many other businesses should follow. You’re a great company and you have my support.

  14. I thought there was supposed to be a decision on November 28th. Are there any relevant updates on the case since the documents that were uploaded on the 27th?

      1. I saw this article regarding the redbox suit vs Disney where Disney shed because they didn’t like redbox selling the digital codes that came with movies purchased retail because Disney refused to license movies to them. Sounds familiar right? Judge claimed Disney was abusing its copyrights in denying an injunction. Is VidAngel following this case or considering siding with redbox in some capacity?
        https://www.theverge.com/platform/amp/2018/2/21/17036932/disney-redbox-lawsuit-star-wars-marvel-pixar-digital-downloads

        1. Redbox apparently has also countersued for I believe Disney’s abuse of copyright. The angle I can see for being associated with this case is related to the first sale doctrine, which is an element to this case, and that I believe upon being granted a license/copy of a digital title I should be able to take it wherever I like, including to VidAngel. Disney seems to have opened the door by arguing first sale on the digital title, that the digital sale doesn’t happen until the code is redeemed. If they call that a sale, I should be able to do with my copy the same as I have right to do with a physical copy, right?

  15. I’m sure your aware, but the new streaming model alienates everyone outside of the United States. I know Netflix and prime is still available but we can’t rent movies of Amazon.com here in Canada which means we can’t watch any new releases through your service. We can rent movies through google though. Any chance we can use google instead of/or amazon in the future?

  16. The ReDigi v. Capitol Records case asks whether digital copies can be resold like physical copies. It’s up at the 2nd circuit. This seems like a much more relevant case for VidAngel than the Redbox case.

    1. The angle I’m interested in are the rights that come with ownership of a digital copy. If it’s declared the copy comes under first sale doctrine and can therefore be resold, then it stands to reason it can be reassigned to a digital locker of choice rather than just whoever the studios have agreements with. If it can be reassigned as I choose then perhaps any locker willing to hold it should be legally granted license instead of at the studios discretion much like cable/phone providers were legally required to lease internet transmission access to any willing provider over their copper lines. If redigi v capitol gets us there I’m all for it. Is that an active case that VidAngel could file FoC for or just precedent? If it’s precedent it doesn’t seem it would fit with their present case (but maybe redbox’s).

  17. Any news? This last official update was 6mo ago… anything at all would be nice to hear about for those of us that invested.

    1. There is very little news on the lawsuit front, which is why we haven’t done an update on legal recently. Look for a non-legal related update in the month of May. If there is a legal development, we will let everyone know as soon as possible.

    1. I’m fairly certain Marvel added their name to the lawsuit. Vidangel had to pull Marvel’s movies whether that is what happened or they just started feeling the heat.

  18. So, is there any intent to go back to the old business model at this point? I understand you won’t be able to if you lose the original lawsuit- but if you win, will you go back to the original business model or continue what you’re doing now?

    What you’re doing currently is okay. But I only ever plan to subscribe to you when there happen to be a significant number of movies I specifically need filtered on my streaming services. After I’ve watched them, I unsubscribe. It’s too expensive to carry on a subscription to several streaming s evicted and vidangel unless I have quite a few movies I need both services for. On the there hand I LOVED your previous business model. The selection was much, much better and the price was right- but I’d go for the old business model even if the price was increased significantly. I’d rather pay $3-4 for a filtered rental I actually want to watch (and need filtered in order to watch) than have two or three $7 subscriptions that may or may not have anything I need filtered and may require another $4-5 on top of that to rent a movie because the ones in stock tend to be lame….

    I guess what I’m trying to say is I’d love it if you’d get your own licenses to movies and stream them on an individual basis rather than backpacking on the stock of Netflix and amazon, both of which have somewhat poor selections unless you shell out more for rentals. Is there any possibility of this? Thanks

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