Why was there a need for the original Family Movie Act?

The Hollywood studios were burying all movie filtering companies in litigation and the existence of the filtering industry was threatened, much as it is today.  Congress felt that families should have the right to filter content in movies, as long as they were legally purchased or rented and as long as no fixed copies were created.  The FMA was designed to protect these rights.

Was the original FMA only for DVDs?

It was not intended to be DVD-only.  In fact, the phrase “or transmitted to” was added to include streaming.  However, the studios are arguing otherwise, which (a) makes the phrase “or transmitted to” meaningless, and (b) makes the FMA irrelevant as streaming replaces DVDs.

What would the updated FMA accomplish?

Since the original FMA, the way we watch movies has shifted from DVD’s to streaming services, like Netflix, Amazon, etc. The update makes clear that the Family Movie Act defends the rights of families to watch filtered movies streamed to their homes.  Moreover, it protects this right against studio interference, as long as the authorized content is legally rented or purchased through authorized channels, such as Netflix, Amazon, iTunes, etc.  Finally, it clearly prohibits the sale/buyback business model, which the studios have claimed is their primary issue.  Importantly, it leaves the Digital Millennium Copyright Act (DMCA) sacrosanct.

Quite simply, the proposed legislation protects the rights of families to watch filtered movies streamed to them.  If the studios are sincere that they are not opposed to filtering, they should support this legislation.  But if the business model complaints were really just a red herring, then the studios will continue to try to find reasons to oppose the legislation.

Does the proposed legislation negatively impact the studios’ revenue?

Not at all.  Filtering will work only with legally licensed movies, through services like Netflix and Amazon.  It would not circumvent any studio distribution channel.  In fact, the studios will make more money because families will watch more movies.  VidAngel customers report that they would not have watched over half the movies they viewed without filtering.

Why do the studios oppose the updated FMA?

Most of the studios have not opposed the legislation.  And of those three that have, their arguments have been against VidAngel’s business model, which is expressly stripped of protection by the new proposed legislation.  Even the opposition studios have said publicly that they are not opposed to filtering streamed movies, as long as it does not violate the Copyright Act.  Based on that, they should have no reason to oppose the proposed legislation.

Based on many discussions with various studios, we believe that the primary opposition is the Directors Guild of America.  We don’t believe that many of the studios really oppose the idea of filtering, but are bowing to pressure from the DGA.  Since signing on directors for big movies is the lifeblood of the studios, being publicly supportive of filtering is a risky position for them.

DGA opposition has historically been led by the most powerful directors.  This makes sense, because they often have “final cut” approval for the movies.  Most directors sign studio contracts that do not currently give them final control over versions of their movies that are edited or censored, such as for airline versions, foreign releases, etc.

Why is studio opposition disingenuous?

First, the studios’ primary concern has been the VidAngel business model.   That’s what we heard from members of Congress who have been lobbied by the studios.  With the new proposed legislation language, that concern goes away.  If the studios then find a new reason to oppose the Family Movie Act, it becomes increasingly apparent that they just don’t like the idea of parents filtering sex, violence or profanity from movies.

Second, the studios’ (Disney) have claimed they don’t oppose filtering, as long as it’s done with a license.  This is clearly a red herring, since they have never, ever been willing to license for family filtering.  Further, we know that at least one studio—Sony—based on an agreement with the DGA, has written language into its contracts with streaming providers that prohibits filtering.  We learned this—of all places—from WikiLeaks, which published actual contracts between Sony and Google Play and Vudu.

Finally, the studios are trying to convince Congress that an update to the FMA is unnecessary because ClearPlay’s Google Play product purportedly permits filtering for streaming (although standard definition only, and not high definition or 4k video).  However, due to Google’s interference, ClearPlay has not been able to filter new movies for six months.  ClearPlay’s problem with Google streaming illustrates precisely why we need to update the FMA.   ClearPlay hasn’t been able to stream any new movies for six months, because it is completely dependent on Google’s technical support.  And Google’s willingness to support filtering is completely dependent on its studio contracts.  As ClearPlay’s experience has demonstrated, without FMA protection, the entire industry could go dark overnight.

What is the studio lawsuit about?

Importantly, most of the studios and content providers did not choose to participate in the litigation.  Three major studios—Sony, NBC/Universal, and Paramount (owned by Viacom) chose not to join in the suit and, when asked, numerous other content providers expressed no objection to VidAngel’s service.

Disney and two other studios have litigated.  Their arguments have centered upon the VidAngel sell/buyback business model, which is explicitly divested of legal protection by the new proposed legislation.  Of note, VidAngel chose its business model only because it was attempting to work within the current law—based on, among other things, the fair use provision in the copyright law.   With the proposed legislation, VidAngel will happily develop a technology to offer its service using a more traditional business model.

What is the status of the litigation?

An Obama-appointed judge (Andre Birotte Jr.) has issued an injunction against VidAngel, based mainly on two premises:  One, that VidAngel’s business model likely violates copyright law; and two, that the public–which wants filtering–will not be negatively affected because ClearPlay still filters streamed movies.   VidAngel disagrees with that ruling and has filed an appeal, now pending with the 9th Circuit Court of Appeals.  However, the updated FMA would make that litigation moot, as it would result in VidAngel abandoning that business model in favor of a simpler, more traditional approach.

Regarding the second premise behind Judge Birotte’s injunction, as we now know, ClearPlay hasn’t been able to stream any new filtered movies for six months.

How would the technology work under the new legislation?

Filtering companies would create applications that sit on top of existing streaming services.  So current Netflix (or Amazon, Hulu, etc.) families would order a movie in the normal way, but the stream could be routed through a third party, which would then be apply the filters chosen by each family.  The service would work only when families have legally purchased or rented the movie from an authorized streaming service.

Basically, viewers would direct the filtering companies to receive the stream after it has been sent by Netflix and filter it before it is viewed on the home screen.

The technology to provide filtering this way is not proprietary.  It will be available to ClearPlay, VidAngel and any other companies which choose to enter the market.