A mechanism for regulatory compliance will probably err on the side of less exposure to lawsuits. They're stuck between a rock and a hard place, but the demands imposed by the government for copyright compliance are backed by a bigger stick.

Don't kid yourself, any other commercially successful VOD platform will have the exact same problem. A startup might squeak by under the radar for a while, but as soon as it gets critical mass, it won't be long before it gets encumbered by all this regulatory "fun".