The laws on watching copyrighted movies vary depending on the service a user employs to watch the movies and the method with which the user watches them, according to New Media Rights. Some services such as Netflix and Hulu have agreements with copyright owners and can legally provide free copyrighted movies.
Other services that offer user-to-user connections often have no agreement with copyright owners, says New Media Rights. In fact, these services normally do not store any material themselves but merely provide the technology for a user to connect to other users to access files. Such technology and the sites that provide them are not illegal because they can be used to download noncopyrighted material in a legal manner.
However, many users take advantage of the technology to watch movies of copyrighted material for which the file holder has no legal right to "distribute," or let other users access. This is known as infringement, explains New Media Rights. In such a case, the original file holder is breaking copyright distribution laws and may be liable for damages if the copyright owner files a lawsuit. The user watching the illegally distributed movie, however, may stay within the bounds of the law if he simply watches the movie using a streaming function. Infringement of the material occurs only when the user watching the copyrighted movie copies or downloads any part of it.