All posts by Neal Harmon

BIG NEWS: End of “Disney v VidAngel” Lawsuit

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Friends of VidAngel,

 

We emerged from bankruptcy today after settling a 4+ year lawsuit with Disney and Warner Bros. 

While we are thrilled for what’s ahead, we need a moment to unplug, recharge, and take care of some important updates behind the scenes (so Netflix and Amazon content will be offline for a bit but will be returning hour by hour for the new few days).

 

The past four years have felt like a marathon, and a water break is long overdue. We will be back soon ready to hit the ground running.

No need to fret though. All of our original content is still accessible, you can check out some of our new up-and-coming projects, and potentially partner with the creators of said projects. We have learned a lot over the years, and have grown in more ways than one. We would love your feedback!

BACKGROUND

Thank you for supporting a few Idaho brothers as we’ve pursued a shared dream over the past seven years. You are part of a story that matters.

 

Shortly after the founding of America, John Quincy Adams truthfully quipped, “Whoever tells the best story wins.”

 

In the early 1900s, a small group of filmmakers, frustrated at the oppressive restrictions imposed by the then movie cartel, fled West and started making movies in Hollywood, California. They were sued and pushed out of the mainstream movie business.

 

The creators voted with their feet and left New Jersey for California.

 

They then made a hundred years of movies that helped the world navigate the great depression, two world wars, the civil rights movement, and more. Hollywood not only captured our hearts and imaginations, it shaped how we saw ourselves and what we consider right and wrong. It has become the #1 export of the world’s largest economy. We are grateful for much of what those pioneers created.

 

Most people don’t even know the movie business ever resided in New Jersey because Hollywood won in telling the best story. They locked down production, distribution, and copyright so you had to come through their door to reach the audience. But the best story to the Hollywood elite and best story to normal people, in their homes, slowly drifted apart. 

 

One hundred years later, a family of Idaho farm boys protested what Hollywood has become by making a video about the decline of values in content published by Hollywood and launching a new service, VidAngel. 

 

 

 

Those like us thought to solve the problem with a bandaid: skipping the offensive Hollywood bits in our homes. As a community, we used CleanFlicks and a dozen other companies who were sued out of existence. 

 

We brothers started VidAngel to solve the problem for streaming, believing we could attract an audience who wanted better stories for their homes. We tried every way we could conceive to pay Hollywood: Chromecast, YouTube, Google Play, DVDs, Streaming, and DVR. 

 

We were shut down, pulled, rejected, sued, treated like pirates, and even opposed in bankruptcy. What was our crime in trying to figure out how to pay Hollywood while giving the individual homes the ability to skip stuff they found offensive?

 

When we lost the lawsuit in Los Angeles, we even tried to pay off the entire judgment with interest. “Not so fast,” said the studios. They didn’t want to be paid. They wanted control. 

 

The studios know, like Adams, that: “Whoever tells the best story wins.” And they want complete control of how their story is told. 

 

Faced with continuing the legal battle to the supreme court or settling with the studios, we recently held a vote with the 8,000 homes who invested in VidAngel, and in a landslide we investors decided it’s time to tell a better story. 

 

We are done trying to make money for studios who abhor that we’re doing it. Those who mock us for doing it. Those who sue us for doing it. Talk about a lose-lose proposition.

 

Instead, we, meaning you and I, are going to tell the best story. And as we do, we win.

 

Case in point, since the launch of The Chosen last November, season 1 has over 8 million app downloads in more than 180 countries and 50 languages. With 55 million views and counting, it’s a phenomenal success and by season seven, we believe we’ll reach over a billion people with its message. 

 

 

For its audience (19,000 of whom funded season one), The Chosen is the best story. There are many more best stories to be told for countless communities who are underserved by the Hollywood elite.

 

We believe these principles, which we’ve followed to make The Chosen, will continue to produce the best stories for their audiences over time:

 

  1. Audiences choose the best story. The crowd will pick winners more often than the elites in Hollywood. The audience is far more important than the executive producer. If the crowd funds the story, it should be made.
  2. You should interact with the creators. When the creators have a direct connection with the audience, they will tell the best stories for their audience.
  3. Feedback loops > Rules based systems. MPAA ratings and Disney mandated standards are yesterday’s system of accountability. Data from skips (applied by individual homes) give the creators the information they need to make the best stories.  

 

We know, like Adams, that “Whoever tells the best story wins.”

 

A little imagination went a long way for Roy and Walt’s little company, Disney Brothers (later Disney). How far can it go for over 8,000 homes backing a few farm boys from Idaho and the creators of the future? 

Be part of a story that matters:

 

  1. Back stories you want made by investing.
  2. Support creators you want to see more from by paying it forward.

 

And may the best stories win!

 

Sincerely,

Neal and Jeffrey Harmon

VidAngel Co-founders

 

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Letter to Shareholders

May 5, 2020

 

Friends of VidAngel,

VidAngel exists to help you make entertainment good for your home. 

What is good for each of our homes is a personal choice. We’ve long known the motto “Be our guest.” At VidAngel, we believe “We’re your guest.” 

After all, it’s your home.

You choose how to watch. In 2013, we started developing software that was essentially a pre-programmed streaming remote. We have now gone through 6 successive attempts to build your skipping software. In each iteration, we hit a wall. We were sued over iteration number four, struggled through bankruptcy, and today Disney continues to oppose iteration number 6. We’re continuing to push through that for you, and in the meantime, we’re providing access to arguably the most exciting content of the COVID-19 era, produced by Netflix, Amazon and other streaming services. Watch however the BLEEP you want.

You choose what we make. In 2017, armed with the data around the skip choices families are making, we launched Dry Bar Comedy. Over 300 comedians have now performed, fine-tuning their sets to the audience and receiving  bonuses for better serving you. Additionally, with the help of 19,000 of you, we funded, produced, and distributed the award-winning dramatic series The Chosen

And you have responded. In April 2020, our business generated 5X the revenue of our skipping software pre-injunction. Dry Bar has over 2 billion views. The Chosen is offered globally, in dozens of languages, has tens of millions of views, and millions of dollars in revenue via its own app. It has been the #1 series on VidAngel for months. 

We hear you. 

Five. Times. Revenue.

 

So what’s next?

After emerging from bankruptcy (we hope during the June 18, 2020 confirmation hearing), we plan to raise up to $50 million to grow VidAngel. 

Our goal with these funds will be:

  1. Give our loyal investors, without whom we would not exist today, a chance to liquidate some of their shares (some people may need cash due to COVID-19 and won’t be able to wait for a potentially larger return). 
  2. Back many more creator projects, like The Chosen and Dry Bar Comedy, by building creator tools for:
    • – daily financial reporting and monthly payments (currently quarterly)
    • – better audience interaction (e.g. live streams, merchandise, uploads, notifications)
    • – creator cross-promotion (i.e. a simple way for The Chosen and Dry Bar to promote new creators’ projects with their massive audiences)
  3. Build better control over more content, allowing you, for example, to:
    • – find the very best content to watch or the best future content to back (rather than the primary focus being on skipping objectionable content)
    • – say exactly what kids are allowed to browse (specific list of approved titles with pre-set skips)
    • – watch with skips without having to wait for us to tag it (say hello to SkipBot and community made skips)

Thank you for trusting VidAngel as a guest in your home. We aim to build an entertainment company that centers around your kingdom, not ours. The best days are yet ahead.

 

Onward,

Neal Harmon

Co-founder and CEO

 

Click here for VidAngel’s SEC Reports

An important call for hope. Please send your stories.

Hello friends,

I’ve been feeling like I should share a little book that our family made to remember digging out of the 2008 market crash. As I thought this week about the tough times we’re in, and what potentially lies ahead, I recorded a quick video I would love you to check out.

I also invite you to share your own story with others to help others get through the difficult times.

If you have a story that would be a fit for our #NeverFailed series, please make a quick video and submit it here. The proceeds raised from your submission can be donated to the charity of your choice.

Thank you so much for your support.

Sincerely,

Neal Harmon
Co-Founder and CEO

No Joke: Two Exciting Announcements

Hi VidAngel Fans,

We know these past few weeks haven’t been easy. People all over the world are struggling under the weight of health concerns, changing work situations, helping their children with their education, and trying to find peace in this challenging time.

We want to help how we can, so I have two announcements I’m really excited about:

First, I’m happy to announce that VidAngel will continue to be free for the entire month of April. No credit card required, all we ask is that you agree to practice social distancing (and to give bigger hugs when all this is over).

Second, we’ve just launched a brand new show I think you’re going to love. The Riot and the Dance: Water is an absolutely gorgeous nature documentary that shows the beautiful and miraculous aspects of aquatic wildlife from a faith perspective. When I watched this show with my family, it had all of us in awe, from my seventeen-year-old down to my two-year-old.

We hope you’ll enjoy this free month of filtering with VidAngel. If you are in need of a laugh, I highly recommend our Dry Bar Comedy specials. If you could use a spiritual boost, I hope you’ll consider our fantastic original series, The Chosen. If you could use something educational for your kids while school is out, we think you’ll really enjoy Chasing American Legends and Beyond the Stars.

If you could use a little of all these things, you will love The Riot and the Dance: Water.

Thank you for enjoying VidAngel in your homes.

 

Sincerely,

Neal Harmon

Co-Founder & CEO

 

GET FREE VIDANGEL

#GenerosityChallenge Increases Our Growth Rate by 50x

While the government debates over how to solve the medical and economic implications of what’s currently happening to our country, we at VidAngel instituted a company-wide work from home program last week, and Monday morning we invited our customers to help.

 

In exchange for an agreement to practice social distancing (and give bigger hugs when this is all over), we are providing access to our entire offering for free, without a credit card. It was the least we could do to help families out. 

 

It makes me uncomfortable to share these numbers, and I don’t want it to come across as bragging or taking advantage of this situation, but I am sharing these hoping other entrepreneurs are inspired to speed to a solution faster. Here’s the initial two day numbers:

 

 

Obviously, we’re just a few companies. Our impact today is small, but the percentage response rate is HUGE. And those who are doing this realize now that this is a mutually beneficial proposition. We’re helping people out and they’re helping us grow. That’s the way American entrepreneurship should work.

 

People are anxious. People are scared. The economy is tanking before our eyes. 

 

Social distancing is a scary prospect when people are worried about their jobs. Aside from health, fear in general is high across the country. People are worried about family members, income, and how to cope with kids being at home instead of in school. We have an opportunity to quell public concerns and replace fear with hope. 

 

If enough of us collaborate together, at a faster rate than any governmental consensus can be reached, we can stave off the spread of disease, help calm the anxiety of those in need, and hopefully, prevent the debacle of our economic system.

 

With Forbes and the #GenerosityChallenge, we invite other companies to figure out how to help those stuck in their homes and beat COVID-19 the American way, through economic ingenuity. Linda.com, MasterClass, big streaming companies, and others, who will help conquer this? The mutual benefit is real, please help us scale this idea to as many web businesses as possible.

VidAngel Trustee Files Reorganization Plan with Bankruptcy Court

Company Submits Plan to Meet All Financial Obligations and Move Forward from Lawsuit as Vibrant and Growing Business

 

(Los Angeles, CA—March 5, 2020) VidAngel is announcing today that due to rapid
growth over the last year, its Trustee has filed a plan of reorganization which outlines a
strategy for the company to move out of bankruptcy. The company’s operating results,
as reflected by monthly filings over the past months and last year, reflect growth in
gross revenues, emerging success of new lines of business and the stability of the
company’s core business.

 

VidAngel, Inc. Trustee, George Hofmann, has issued the following statement:

“Bankruptcy law was established by Congress to give companies a chance to rehabilitate, get back on their feet, pay their creditors, and continue to move forward.
VidAngel has a reorganization plan that does just that. After entry of an adverse judgment in an amount that, initially, seemed insurmountable, the company’s business and revenues are growing, and the company is expanding into new lines of business. According to third party financial experts hired to advise me in the reorganization process, VidAngel’s robust growth makes paying the judgment in full feasible. I look
forward to the court confirming a plan so that VidAngel can emerge from bankruptcy, pay its debts and focus on growing a great business.”

 

VidAngel, Inc. CEO Neal Harmon has issued the following statement:

“We would not be in this position today were it not for the support and loyalty of our customers, investors, and the resilient VidAngel team. We’ve gone from avoiding threats of a shutdown to being able to say, ‘just send us the bill’. VidAngel is turning a page in its history, and we believe that we now are moving forward stronger than we’ve ever been. VidAngel remains committed to helping you, the viewer, make entertainment good for your home.”

 

Reorganization Filing Facts

● In light of financial results reflecting VidAngel’s business growth and future
potential, VidAngel’s Trustee has decided to file a reorganization plan to pay the
adverse judgment in full.

● Third party experts have determined, given VidAngel’s financial results to date
and the anticipated stability and growth of its current lines of business, that it is
feasible to pay off the adverse judgment over a 14-year plan.

● Under the proposed plan, VidAngel’s appeal of the California court’s judgment
will continue, the shares of its investors will be preserved and VidAngel’s
management and board will control the company moving forward.

● The plan confirmation process is anticipated to take a minimum of 60 days.

 

What this means for VidAngel

Should the judge confirm the reorganization plan, VidAngel is moving out of bankruptcy and on from the lawsuit as a healthy company with exciting growth. 

 

What this means for the $62.4 Million Judgment 

This reorganization also means that we get to appeal both the summary judgment ruling and the $62.4 million judgment, and feel we have a strong case. But in the event that our appeal fails, the $62.4 million judgment is not a death sentence. Third party experts have opined that VidAngel can pay off the judgment over a 14 year period. That’s an unbiased third party who has looked at our financials and growth prospects and is saying that VidAngel can pay this off. All $62 million.

 

What this means for VidAngel Investors

We are especially happy to inform our investors that, if the Trustee’s plan is confirmed by the Bankruptcy Court, VidAngel investors will retain their equity in the company and have the opportunity to share the benefits of future success.

 

We would not be in this position today were it not for the support and loyalty of our customers, investors, and the resilient VidAngel team. We’ve gone from avoiding threats of a shut down to being able to say, ‘just send us the bill.’ 

VidAngel is turning a page in its history, and we believe that we now are moving forward stronger than we’ve ever been. VidAngel remains committed to helping you, the viewer, make entertainment good for your home.

Thank you. We are so excited for the days ahead.

 

 

VUDU Family Play Mode

Last week, Walmart’s VUDU announced a new feature called “Family Play Mode” which automatically skips sex, violence, profanity, and drug use in 500 movies. This is the most significant development in parental and family content skipping since we launched VidAngel in 2013. 

Here is what we know so far:

– They offer Disney content

– They are supporting modern streaming devices like iOS, Android, XBOX One and a few smart TVs 

– They offer 500 PG and PG-13 titles

Some backlash:

– Filmmaker discussion boards online have exploded in shock and anger.

– Commenters across social media are predicting that Family Play will be shut down by pressure from the DGA.

– When Sony announced a similar initiative back in 2017, they were attacked by the Directors Guild of America and leading Hollywood content-makers. Eventually, due to significant pressure, took “Clean Version” down.

We congratulate VUDU and Walmart on being the first major player to catch the vision of skipping. 

Permanent Injunction

VidAngel Fans,

 

Thursday night, the original 2016 preliminary injunction against VidAngel was ruled “permanent” — but with legally questionable modifications (here’s the order and the ruling).  In January 2017, we shut down our old system and have never since used it to offer anyone’s content. Instead, we pioneered a new system, but never offered Disney’s content on it.  We advised the court that we had not used the old system in any way for more than 32 months and “unequivocally” committed never to use it again absent a change in the law. But the judge nevertheless issued the new injunction.

 

Perplexingly, the judge granted Disney’s unusual (and legally questionable) request to broaden the injunction to include “parents, affiliates and subsidiaries,” and did so without requiring even that Disney identify those additional entities.

 

As we have done in the past, we will proceed with the utmost caution. We are removing the titles that are seemingly subject to the injunction. Once again we don’t know for sure which ones are because of the vagueness of the ruling. However, we know ABC and Hulu are owned by Disney and HBO is owned by TimeWarner, which also owns Warner Bros. Late last night we also removed Castle Rock. We have asked the studios if there are more entities now protected by the new injunction and await their answer. 

 

In light of this development, might we suggest that now is the time to reach out to your senator and/or Congressional representative to urge that they support the bill to update the Family Movie Act to permit filtering of all movies?

http://savefiltering.vidangel.com

We’re certain this comes as a blow to those who love ABC, HBO and Fox Searchlight. Let’s re-double our efforts to seek a solution! 

 

Sincerely,

Neal Harmon

 

CEO, VidAngel

 

 

 

How you can help Senator Mike Lee update the Family Movie Act

Senator Mike Lee is preparing to introduce an update to the Family Movie Act in the Senate. This important message from the CEO of VidAngel, Neal Harmon, and a letter from the President of the Parents Television Council, Tim Winter, explains how you can help.


Video Message from VidAngel:
(Can’t see the video? Click here.)


Letter from Parents Television Council:

As a parent, nothing is more important than protecting a child’s innocence.

And, as a veteran of the entertainment industry, the truth is that there are many in Hollywood who are actively engaged in creating content that strips that innocence away from our kids, damaging lives forever.

You know this already, that’s why you use and support VidAngel, because its incredible content filtering technology protects your family. The Parents Television Council wants to protect your right to filter out the graphic sex, violence and profanity that is so pervasive in today’s media, but I need your help.

Hollywood is fighting to remove your parental right to use content filtering technology for modern streaming devices.  They’ve convinced judges that you shouldn’t be able to use modern technologies to protect your family from material that you find harmful or offensive.

If we don’t act now, and if we don’t act together, we may lose that right forever. Please contact your senator to support your right to filter explicit content.

Legislation is being considered in Washington DC that will block the negative forces in Hollywood from taking away your right to use filtering technologies like VidAngel.  If that legislative remedy is to succeed, we need bipartisan support from the most influential legislators. That’s why your senator needs to hear from you today.

HOW YOU CAN PROTECT KIDS RIGHT NOW.  Please click on the link and send your personal plea to your Senator so that your rights to filter content are protected. It will only take a minute or two, but it will help you and your family for decades to come.

With urgent thanks,

Tim Winter

President

Parents Television Council

Agreement Reached on Chapter 11 and Chapter 7 Motions

All,

 

We have news.

 

First a refresher on bankruptcy – Chapter 11 means VidAngel still serves its customers and Chapter 7 means VidAngel is shut down.

 

We’ve reached an agreement with the studios to appoint a chapter 11 trustee in exchange for:

1) Withdrawing the studios’ chapter 7 motion

2) Under Bankruptcy law, the studios can elect whoever they choose if they don’t like the trustee that is appointed, but under this agreement, they only choose from four people we’ve agreed on in advance.

 

We decided to do this because we think it will allow an objective third party help us get through the chapter 11 reorganization process with more favorable results for the future of VidAngel. And it will save money that would have been spent on legal bills.

 

We are turning our sights to successful reorganization with the help of a trustee rather than spending unnecessary time and money fighting the studios’ motions. We’re optimistic about our prospects for reorganization.

 

Best regards,

Neal Harmon

Co-founder & CEO

VidAngel