On June 8, 2017, the American Conservative Union published a blog post calling on Congress to support Hollywood over parents and families, falsely attacking VidAngel in the process. That blog post can be found here: http://conservative.org/call-to-congress-ignore-demands-to-update-the-family-movie-act/
Years ago, former New York Senator Daniel Patrick Moynihan famously said that everyone is entitled to their own opinions, but not their own facts. While the American Conservative Union is certainly free to advocate for the interests of Hollywood studios, it is not free to change the facts. The ACU’s blog is replete with falsehoods and misleading information. We’re addressing each item in this blog post.
First False ACU Claim: We do not write in opposition to “filtering,” as explained in more detail below. In fact, we support the efforts of lawful filtering services to give families more options that comport with their values. Rather, we urge more careful scrutiny of the claims of those calling for such an update, concerned that what we see here is really a case of wolves in sheep’s clothing, advocating to undermine important principles of property rights and free markets under the banner of protecting family friendly “filtering” services.
Response: The ACU is using the oft-repeated Disney argument in this case, claiming that it supports filtering while doing everything it can to undermine and eliminate services offering filtering.
Second False Claim: For more than a decade since the enactment of the Family Movie Act, there have been no disputes or litigation over the operation of filtering services that enable individuals to use technology to automate the skipping and muting of content they consider offensive in the home. Companies like ClearPlay have offered filtering services for use in connection with legally acquired DVDs and BluRays, as well as with licensed streaming content. TVGuardian provides a “foul language filter” for television programming received over the air or through cable and satellite services. Ufilter is a more recent entrant into the market, claiming to do the same for streaming services like Netflix, Hulu and Amazon. All of these services exist in a market enabled by the Family Movie Act, and we are not aware that any have called for Congress to intervene further in this market.
Response: The filtering industry nearly died because every company but one was shut down, the sole survivor being ClearPlay. But it is slowly dying as consumer habits move away from discs to streaming services and modern devices such as iPad, Roku, Apple TV and others (86 percent of VidAngel users watch on devices ClearPlay is unable to support). TVGuardian is also on life-support as interest in its technology shrinks and it struggles to stay relevant. Hollywood has not fought these technologies because they have no future.
VidAngel, on the other hand, delivers a filtering experience that Americans actually want to use (see Google Trends chart comparing VidAngel and ClearPlay below). Contrary to the ACU’s inaccurate claim, every VidAngel customer who watched a filtered movie had the exclusive right to a specific, lawfully purchased DVD or Blu-ray disc–just like any Redbox customer or customer of any DVD rental service.
Through 2016, the studios had sued every service that ever offered to filter content for family viewing and, even as of today, the studios have never licensed any service to filter motion pictures for family viewing. The services now operating cannot filter high definition content, do not work with modern apps, do not provide a good user experience, and can easily be disabled by the streaming services they ride on.
The studios hope that by limiting the quality and convenience of filtered content, filtering will never be able to compete on a level playing field with unfiltered content. And, given ClearPlay’s inability to filter new releases on Google Play streaming since September of 2016, it is obvious that other unofficial services built on top of streaming providers can also be shut down at any time…
Third False Claim: The sole exception is VidAngel, the filtering-enabled streaming service that was recently shut down by a court, not because of its filtering activities, but because it was copying DVDs and BluRay discs to cloud servers and using those unlicensed copies to stream movies and television shows for $1 in direct competition with licensed streaming services, but without a license from a single copyright owner.
Response: VidAngel has sued the studios for violating the antitrust laws because the studios have colluded to deny streaming licenses to any company that offers filtering. Because the studios have never licensed anyone to filter content for home viewing, Congress crafted the Family Movie Act to protect third parties (such as VidAngel) that filter the content of discs at the specific request of consumers and then stream that filtered content to the consumer for private viewing. Congress recognized that studios could control what they charge for discs and when they release them for sale, and also recognized that because discs are sold to the public, the studios could not prevent filtering based on discs as they could by refusing to issue a license to any filtering service.
Fourth False Claim: It is ironic that a company purporting to champion family values instead operates in violation of the Ten Commandments: Thou Shalt Not Steal. We support a vibrant marketplace for technologies that allow families to control the content that comes into their homes. What we do not support are efforts to mask clearly unlawful activities beneath the family friendly banner of “filtering.” VidAngel and its surrogates claim the need to update the Family Movie Act to accommodate filtering in connection with streaming services and to counter a “war on filtering.” But as much as they want to make their dispute about filtering, they appear to be fighting a nonexistent war as a ruse to avoid the real issue of copyright infringement.
Response: Are these same leaders accusing Redbox of stealing? No, but only because the studios entered into licensing agreements with Redbox as the consequence of an antitrust lawsuit Redbox brought against them. VidAngel and Redbox are fundamentally the same. They buy discs and permit customers to watch them over and over again.
VidAngel has spent millions of dollars to purchase, not steal, content. It lawfully bought thousands of DVDs of the motion pictures it offered and re-sold them to its customers. Anyone who pays for a DVD sold lawfully is allowed to watch it. But the studios say that VidAngel customers must pay twice to watch a movie once: they must not only pay for the disc but must also pay for a stream (notwithstanding that the studios do not permit filtered content to be streamed).
What’s more, for many business reasons associated with its disc-based model, VidAngel is, and has always been, more than happy to pay for a streaming license, but the studios refuse to sell a streaming license that permits filtering.
Fifth False Claim: We would expect copyright owners to bring infringement claims against any company doing what VidAngel does, regardless of whether the infringer also offers filtering. The Family Movie Act already allows filtering in connection with licensed streaming services, and plaintiffs in the VidAngel litigation repeatedly state that they do not object to lawful filtering services. That is why ClearPlay—VidAngel’s leading competitor in the filtering market—is not the subject of litigation. ClearPlay has been in the market for filtering in connection with streaming services for years and has indicated plans to roll out additional new services this year, as is its right.
Response: Disney and others have created a catch-22 scenario. They say that VidAngel must purchase a streaming license but they refuse to sell one that permits filtering. They will not even sell filtered streaming licenses to large distributors, such as Google. ClearPlay created a technical hack that allowed it to work with Google Play but its hack was shut down for new titles by Google in September 2016 because Google has signed contracts with the studios that prohibit it from allowing filtering.
That service, to date, has not returned.
ClearPlay for streaming is a bolt-on service that can be shut down at any time. Read the Family Movie Act. It says nothing whatever about “licensed streaming services.” It says that authorized “copies” may be filtered and Section 101 of the Copyright Act defines “copies” as tangible objects. And ClearPlay was sued by the studios for selling a DVD player that enabled filtering in the home. The Register of Copyrights testified to Congress in 2003 that ClearPlay’s in-home filtering was lawful under existing law. Because ClearPlay was sued anyway, Congress reacted by passing the Family Movie Act. Only then did the studios give up their lawsuit against ClearPlay.
Sixth False Claim: It is also telling that ClearPlay has not joined with VidAngel in calling for changes to the law, instead telling the court in the VidAngel litigation that “[t]he cause of filtering is not helped by VidAngel’s unlawful behavior, especially coupled with incessant undermining statements towards those that are lawfully and legally filtering content.” Congress anticipated just this kind of mischief and drafted the law to nip it in the bud. As the authors of the Family Movie Act explained, “an infringing transmission of a performance to a household [is] not rendered non-infringing … by virtue of the fact that limited portions of [the motion picture] are made imperceptible during such performance or transmission,” and “the Act does not provide any exemption from the anti-circumvention provisions of section 1201 of title 17.”
Response: It is most telling that the former CEO of ClearPlay, Bill Aho, who helped get the Family Movie Act passed in 2005, has formed ProtectFamilyRights.org to seek a solution for filtering for the streaming age. He has recognized that his the benefits of the Family Movie Act will end as technology leaves discs behind and has therefore dedicated time and energy to seeking a solution with Congress.
The reason for ClearPlay’s involvement is obvious – ClearPlay and VidAngel have been litigating a patent dispute for three years, during which time VidAngel has become far more successful than ClearPlay. ClearPlay’s motive for siding with the studios against its more successful competitor is transparent.
The claim that “the Act does not provide any exemption” from the Digital Millennium Copyright Act (DMCA) begs the question: Is any exemption required? The answer is “no” for several reasons.
First, the DMCA distinguishes between “access control” and “use control” provisions. The studios contend only that VidAngel violates an “access control” provision. Such provisions control who is or is not allowed to access the content of a DVD. Anyone who acquires an authorized DVD is allowed to access its content. The studios’ complaint concerns VidAngel’s use of the content, but such use is not prohibited by the DMCA.
Second, to treat the access control provision as a use control provision would prevent many fair uses of copyrighted materials. That’s why the Electronic Frontier Foundation filed suit last year seeking to have that provision of the DMCA declared unconstitutional. That suit is pending in the Washington, D.C. district court.
Third, it is a core principle of statutory construction that an older law (the DMCA) should be read in a manner that harmonizes it with a more recent statute (the FMA). The FMA was intended to end all litigation involving filtering by affording flexibility in using various technologies to accomplish its purposes.
Fourth, as the DMCA had been interpreted by the courts when the FMA was enacted in 2005, damages were a necessary element of any DMCA claim. Because the studios would be paid for their content when they sold DVDs, they could not have alleged damage and therefore could not have alleged a DMCA violation. The DMCA violation the studios allege against VidAngel is based on a 9th Circuit case decided years after the FMA became law.
Seventh False Claim: We see no reason to upset this balance, which recognizes the importance of copyright and contracts in supporting a robust market for video streaming. Nor do we see any reason for the kind of incursion into the market being urged by VidAngel, which seeks to regulate the terms of video distribution agreements and impose technology mandates on internet streaming services. These proposals are both a solution in search of a problem and fundamentally inconsistent with conservative values.
Response: VidAngel wants not just a robust market for video streaming but a robust market for filtered video streaming. It therefore seeks to prohibit the studios from requiring authorized streaming services to prevent filtering. VidAngel does not seek to impose any technology mandate on streaming services (or anyone else). For about nine months during 2016-2017, no service was able to filter any new filtered motion picture content owing to studios’ use of contractual bans on filtering. The studios say they support filtering, but they expect filtering services to play a cat-and-mouse game to avoid being blocked by the authorized streaming providers they ride on while trying to attract customers with technology necessarily inferior to the technology available to streaming services that do not filter. They can be put out of business at any time (as has now happened multiple times with both VidAngel and ClearPlay).
Eighth False Claim: VidAngel should not be allowed to wrap itself in saints’ garb, cloaking its behavior in the mantle of family values while undermining the core conservative principle of property rights and free-market principles that support a vibrant creative economy. While we, too, find some movies and TV shows inappropriate for families, the solution lies in innovative products and services legally deployed in the marketplace—not congressional mandates which undermine core Constitutional rights and interfere with existing, well-functioning markets.
Response: The studios should not be able to hide behind what they term “core conservative principles” when they have fought free market principles for decades. They fought the Sony Betamax (the precursor to the VCR and greatest boom in wealth in home-video history); the Redbox video rental service by trying to cut off supply; every filtering company that increased the studios’ sales; and now VidAngel.
What the studios want is a “market” where they alone determine how, where, when and who streams every motion picture.
Fundamentally, they want complete control, but their history has shown repeatedly that they fight legal markets that benefit them. And speaking of fundamental conservative principles, the Constitution states that copyright law exists to “promote the Progress of Science and useful Arts.” The Constitution makes clear that copyright law should benefit the copyright holder, in order to benefit the public.
Yet the studios want copyright law to benefit them without any consideration of public benefit. By continually opposing filtering, the studios are pursuing their own agendum while harming the millions of American families who are forced to watch objectionable content or not watch at all. As proven in the record before the Court, filtering increases the reach of artistic expression to larger audiences while providing the studios millions in sales. It inarguably promotes the “Progress of Science and useful Arts.”
Excluding the filtering audience through limitations placed on devices, platforms, contracts, or other means, contorts the law away from its original intent. VidAngel does not seek any Congressional mandate; merely a clarification that the FMA allows competitors in a free market to offer innovative products and services–such as high quality, individually filtered, content delivered to any modern device a consumer wants to use to watch it.