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Vidangel – a crowdsourced method to enable $1-2 movie rentals and provide edited movies for families

Vidangel logo

Vidangel is an online platform through which users can rent movies and TV shows for an affordable price ($1-2 per title) and add customized filters to remove content they deem explicit. As explained by the CEO, Vidangel’s vision is to capture the untapped market of family viewers who have not yet watched certain videos due to graphic content:

Hollywood is always trying to reach more viewers by cutting [its] films for different audiences: There’s the Theatrical Cut, the Director’s Cut, the Airline and Broadcast Cut for the FCC, the Middle Eastern cut for Islam, and fan cuts like people uploading [select] scenes from Game of Thrones to YouTube. It seems like there’s a cut for everyone. But one major group was missing, a Family Cut for streaming.

 

BUSINESS MODEL:

In addition to enabling the sale/rental of edited videos, Vidangel’s unique business model provides such services for a much more affordable price than iTunes, Amazon, or other video services:

  • A user initially pays $20 to purchase a digital movie from Vidangel
  • Because the user owns the film, the user is free to select from thousands of specific filters to apply to the movie; e.g., “Remove F-Words”, “Skip nudity”, or “no filters”
  • After watching, the user has the choice to keep the movie or resell it back to Vidangel within 24 hours of buying for $18 in Vidangel credit
  • After reselling the movie, the user can purchase another movie with the $18 in credit plus $2 in additional cash, and then keep it or return it for $18 in credit
  • The user can thus continue to “rent” HD movies for a net of $2 (only $1 for SD movies), and has freedom to edit as he or she pleases

 

OPERATING MODEL:

Filter Business ModelVidangel’s business model – selling/lending edited content – is specifically enabled by its unique crowdsourcing operating model. Without such an operating model, selling or lending edited content would not be feasible or even legal. In 2006, a company called CleanFlicks, which lent and sold edited Hollywood movies that were edited by CleanFlicks itself, went out of business when movie studios sued the company for altering and then selling their copyrighted content.

Vidangel, in contrast, uses its “community members [to] tag potentially offensive swearing, sex and violence in movies … These tags provide a customizable filter so viewers control what they see and hear based on their personal values and content preferences.” Vidangel leverages the Family Entertainment & Copyright Act of 2005, which states that individuals have the right to remove “limited portions of audio or video content of a motion picture, during a performance in or transmitted to that household for private home viewing, from an authorized copy of the motion picture.” Because the community does all of the filtering and viewing, the business model is legal.

While there is minimal additional public data on a small startup such as Vidangel, we can infer other features of its operating model beyond its crowdsourcing strategy and pricing structure that align with its business model, including the following:

  • Personnel and Hiring. The firm hires professionals with experience in creative arts and entertainment. Of only 12 employees on LinkedIn, the Co-Founder is also an Artist and Designer; the Director of Marketing is a Comedy Writer for a local TV show; the Content Manager is a musician in the local Symphony; the CSR is an Aspiring Actress. Such backgrounds are aligned with a company designing an innovative technology platform to deliver media and entertainment.
  • Platform & Technology. The company has adapted to today’s world of streaming by designing apps for every major desktop and mobile delivery platform (Apple, Google, Amazon, Roku, Chrome, Firefox, Xbox, PS4, etc.). Its technology is seamless; I recently rented a film through my iPhone and used the AppleTV AirPlay capability to watch it on my living room TV.
  • Location: Vidangel is strategically located in the state of Utah, which is a largely religious and family-oriented state with a legal system that is friendly to family-oriented policies, as well as an employee pool that is aligned with the company’s strategy.

CONCLUSION

As the company scales up, its operating model, and more likely, its business model, may have to change, particularly as laws adapt to the delivery of digital content. For now, though, the company is aligned in both strategy and operations to be the market leader in a niche sector of family-oriented viewers. It may even disrupt higher-priced digital streaming platforms such as iTunes and Amazon Prime.

 

Sources:

  1. “VidAngel Raises $600k to Launch Streaming Movies & YouTube Clean-Up App for Families”, http://www.prweb.com/releases/2014/07/prweb12045685.htm
  2. Vidangel website, https://www.vidangel.com/
  3. LinkedIn, https://www.linkedin.com
  4. Wikipedia – “CleanFlicks”, https://en.wikipedia.org/wiki/CleanFlicks
  5. “Rent Edited Streaming “Clean Flicks” – A Review of VidAngel’s New Edited Movie Service”, http://mormonlifehacker.com/rent-edited-streaming-clean-flicks-review-vidangel-movie-service/
  6. Youtube – “This Poor Family Gets Shot with 3,192 Paintballs in 5.3 Seconds to Prove a Powerful Point –VidAngel”, https://www.youtube.com/watch?v=B7t85SESTXI

6 thoughts on “Vidangel – “Watch movies your way – however the BLEEP you want”

  1. Wow! What an interesting way to get around what the issue of altering protected material. Allison and I will absolutely become a user of this product over Christmas break. Thanks for the great post, Tommy.

  2. Tom, great overview! What a cool concept, like you said it will be interesting to see how VidAngel scales and how they respond to changes in the regulatory landscape around digital content.

  3. Tom! Great post. Out of curiosity, how does Vidangel’s library of streaming options compare to services like Netflix or Amazon Prime? My understanding is that companies like Redbox and (formerly) Blockbuster are/were able to rent out physical copies of movies without the consent of the movie studios, but streaming services require an agreement between the service and the studio. Is that also true in this case? Or is there an important legal difference between Netflix’s subscription model and Vidangel’s a la carte model?

    1. Good question. I actually don’t know and was trying to figure it out. I think there must be some nuance around owning the actual movie copy that makes it OK to sell to the viewer and then buy back. For example, I actually “rented” Star Wars the other night for $2, even though you can’t rent Star Wars ANYWHERE else (itunes, vudu, amazon, etc) because Disney restricts distribution. You have to buy it to own for $20 on iTunes or elsewhere. But on Vidangel, they’ll buy it back from you for $18 so your net cost is $2. That’s why I believe there may be future regulations placed specifically on SELLING BACK digital versions of movies, but for now it’s legal. In any case, I believe there is no reason a digital rental of a movie on iTunes (priced at $5.99 in many cases) should be so expensive, more expensive than DVD’s that Blockbuster used to rent out even while DVDs include physical materials (which add cost). So hopefully someone can figure out a business model (maybe Vidangel is it) to disrupt the implicit price collusion that appears to be happening between all the movie rental platforms.

  4. Wow, this is a really cool company. I think they are adding great value that is unique to this industry, and the operating model works well for skirting legal issues that took down Cleanflicks a decade ago.

    For this model to work effectively, users need to be engaged, as we learned from the Threadless case. If the target market is parents with young children, they likely don’t have much free time and may not be willing to buy the movie, clean out the dirty parts, and then watch the sanitized version again. The alternative would be a different activity, or simply fast forwarding/closing kids’ eyes during parts they would rather skip. I wonder if some sort of incentive system needs to be in place to motivate viewers to invest their time in VidAngel, similar to the function of the prize money in Threadless.

    1. Good point. I think “community” as it relates to content tagging is a bit of a loose term. I read something about them actually employing (or at least incentivizing) someone to tag most of the movies (someone who “would have watched the unedited versions anyway”), and the part that makes it legal is that you the viewer select what is included or excluded at the time you watch the movie. So although Vidangel is doing the tagging, it’s not actually doing the editing – you the viewer are.

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