Walt Disney Co. and Warner Bros Entertainment have settled a copyright lawsuit with a company that has a technology for editing out undesired content from movies and TV shows streaming on Netflix and Amazon Prime.
VidAngel Inc., in Provo, Utah, will pay $9.9 million to the two Burbank studios over a 14-year period and agreed to not distribute content from them or their affiliates without permission.
The company’s technology allows viewers to filter out scenes with content they don’t want to see, such as sex, violence or vulgar language.
VidAngel Chief Executive Neal Harmon said the company will now be able to emerge from bankruptcy and move ahead as a growing business.
“As with any compromise, we had to make painfully difficult concessions to arrive at this agreement, as did Disney and Warner Bros.,” Harmon said in a statement. “We want to thank the team at Disney and Warner Bros. for negotiating this settlement in good faith.”
The company also agreed to drop its appeal to the federal Ninth Circuit Court of Appeals asking for a review of a lower court’s ruling of $62.4 million judgment against it.
The lawsuit filed in June 2016 alleged that VidAngel violated copyright law with its video-on-demand service by not having authorization to stream content from Disney and Warner Bros. and its affiliate studios and paying nothing for the rights it exploits.
“At its core, VidAngel is no different from many other unlawful online services,” the lawsuit said.
The settlement was announced on Friday. On Tuesday, shares of Disney closed up $2.21, or 1.7 percent, to $134.20 on the New York Stock Exchange on a day when both the Dow and Nasdaq closed down.