Zediva is a DVD rental service with a business model as goofy as its name. As you may remember from the company’s beta launch a few months ago, Zediva users rent not just a movie, but also a player at the company’s data center which then streams the title to the user.
Zediva’s unorthodox model allows it to avoid the new release delay windows that many studios slap on Redbox and Netflix because the company claims it is renting DVDs. Physical discs, unlike streaming content, fall under the auspices of the First Sale Doctrine, which allows DVD purchasers to rent titles they buy under any terms and at any price.
Zediva founder Venky Srinivasan believes that the law is on his company’s side, and eventually the studios may be as well. Says Srinivasan:
“We are confident that the law allows consumers to watch DVDs that they have rented. We hope the studios will see us a partner.”
Thus far the studios have taken no action against the fledgling company—possibly because it’s still too small to register on their radar. But should the service experience success and gain in popularity, studio response could be very different.
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As of this posting, the company’s site is “temporarily down for maintenance”. Verbiage on the placeholder page suggests that the site has been overwhelmed by traffic following its official launch.
Do you think that Zediva will fly or fall, Insiders? How will the studios react to this new player in the rental biz and its offbeat model?
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Hit the comments and leave your guesses.
(via CNET)
After reading this ariticle I don’t see this site lasting long. The studios squash anyone they legally. The law they are trying to use sounds iffy at best
The site is now just collecting emails for a “wait-list,” after NYT did a write-up and they were swamped. Legal justification for this product is stronger than that for say, an Ivy TV, I suppose.
I think this is a wonderful idea, but poor in execution. Let’s say they could get .01% of the rental market. You would be looking at 300000 rentals per week and at the peak times of Friday and Saturday night you may need to have as many as 50000 DVD players going at one time. Sounds extremely inefficient and difficult to manage.
As much as I hate the overexposure of the word……FAIL!
It was up yesterday and thought it was cool they offer a 3 rental for $1.99 deal, but I was wondering how do streaming videos become “out of stock”?
Because they aren’t streaming at all- thats the legal loophole they’re exploiting. When you pick a movie to watch, an actual dvd goes into an actual dvd player- you’re watching that. You’ll even see if fast forward past ads in the beginning, like if you were doing it yourself. They can become out of stock because they only have so many physical copies.
Their attorneys should be fired. What they are trying to do is clearly illegal. It’s not about the first sale doc at all, it’s about copyright infringement. The moment you change the media from physical to digital without the consent of the studio the law is broken. You can dress it up how ever you want but the law is very clear.
This is not accurate. The way copyright law reads (and trust me, I deal with this on a daily basis) pertains to the conversion of media from analog signal to digital data. If this were VHS being converted, that would be a blatant violation of this conversion since VHS is analog. But DVD is a digital format already. Converting from one digital format to another does not constitute a violation at all. Just as the conversion of legally obtained CDs to an iTunes format is not illegal.
The studio has control over the production of the DVD media. By producing the DVD, they have consented to the rights governed by the rental or sale of the DVD.
Is this whole thing legal? It’s shady at best. But it’s certainly not illegal based on your claim of conversion. It’s not a physical to digital issue. It’s analog to digital that would be an issue- and these are two different worlds.
Actually there is legal precedent for this. Sling Box companies were prevalent before actual internet TV took off. I know the biggest market was for people away from home to watch local programing. You rented a slingbox in the home market and could access it anywhere. They were never shut down since the person was “watching” in the home market.
I’m kind of surprised no one thought of it before actually.
I have “rented” about 8 movies from Zediva since we did our first write-up on them last year. Personally, I love the service.
The downside right now (for me) is the video/audio quality. If this problem can be solved effectively, and they can transmit 5.1 sound and even 720p video quality, I will be very happy.
The legal issue is certainly a murky one. Is it legal? I don’t know. Should it be legal? Of course. It is like having a DVD player with a really long cable. Since only I have access to the movie during the rental period, it is just like going to Redbox and picking up a movie, just without the trip to the store. It is NOT a public performance in any way.
The real issue with Zediva is scale. If it caught on, I don’t see how they can scale to meet the demand. It has been great so far since it was only in beta, as I have rarely got the “this movie is checked out” message when trying to rent a flick, but as more people try to use it, this will happen more and more, causing people to become frustrated and stop using the service.
The last rental company to get this kind of attention (and flack) was none other than… redbox. I am VERY interested in how this all turns out.
Michael, with all due respect it’s not like having a really long cable it’s more like converting physical media to digital without permission. You have to convert it to send it, there is no way around this. It’s all just symantics beyond that, and let’s take it one step further if your going to convert it to digital and buffer the signal you might as well store it digitally (at least temporarilly) so that you can physically get it out to 100,000 people at a time. Now we are in the realm of streaming. Now that we are onto the word streaming….
If I buy a dvd it certainly does not mean I can convert it to a different media, that is the real issue. A video store, kiosk or netflix buys a disc and has a right to make money off of that one disk, if any conversion is allowed you will open pandora’s box. When you first think of this it sounds like a decent idea, but when you take the time to really examine it and really think about it it’s ethically and legally wrong (without getting the permission of the studio).
All media is converted on playback from disc to digital signal. The question here is much more complex than you make it seem. The legal turning point will be in how well they maintain records. Are they actually playing a disc for every stream that comes out, and is it playing real time from the disc. If they can prove that you are indeed controlling a DVD player then they will win because as I said the precedent is set. Check the records for sling box companies. It was decided that where the device is was the determining factor and not were the cables ended. If they instead cheap out and just buy the DVDs but still encode them, which seems more likely, then they could be in trouble.
From what I know about sling box you are forwarding the cable t.v. etc, to your computer/Iphone/Ipad but that is a service you are paying for (cable t.v.). Cable has authorization to transmit a digital signal over common lines from the respective studio’s. So the p residence you provided is completely different than what ZDIVA is trying to do. The key is the Cable operators have “permission”.
That is what a slingbox can do. What people did with it was use it, mostly in the UK, to “sell” their local programing to the USA. It was also done in reverse. However USTVNow was recently denied that right because they were said to be “broadcasting” and not simply “playing” for reasons that were unclear in the briefs. This is a very complicated issue that will at best be drawn out for years in court. The hinge is going to be can Z afford to fight it and will they be allowed to operate during the trial to keep revenue coming in.
The Studios, with their unlimited legal bullying resources, can find a loophole to shut them down. For example, they can put on Zediva the burden of proving that the video transmission is secure (i.e., that this is not “broadcasting”). Or something like that. They don’t have to actually win a case to make their operations impossible to continue. Not that it will be easy for Zediva to continue, anyway, as others have pointed out.
As long as the movies are $1 or less… I could care less if it comes from RB, BB Express, Amazon, Facebook, or Zediva.
Whether it’s legal or not isn’t quite as important as whether Zediva has the financial resources to fight the studios, who will try to bury them in court filings until the end of time.
This breaks so many copyright laws it’s humorous. Cartoon Network has already won a similar case. This happened in the music industry and they were sued into oblivion. I’m sure this site will go from swamped to shutdown if it already isn’t.
Cartoon Network won their original case but it was entirely reversed on appeal:
http://www.lawupdates.com/commentary/icartoon_network_v_csc_holdings_i_remote_dvr_does_not_violate_copyright_pro
Good catch, this allows DVR type service. Sling boxes were real time access, DVR is the next step. Clearly the copyright laws are a bit muddled but it all seems to come down to the same point, remote access. As long as someone has the physical location then it’s ok to put it on the web.
“From what I know about sling box you are forwarding the cable t.v. etc, to your computer/Iphone/Ipad but that is a service you are paying for (cable t.v.). Cable has authorization to transmit a digital signal over common lines from the respective studio’s. So the p residence you provided is completely different than what ZDIVA is trying to do. The key is the Cable operators have “permission”.”
Pay cable has nothing to do with this issue. You can use slingbox to stream free OTA tv signal.
The key is the streaming is to YOU. You alone can access YOUR OWNED CONTENT.
Wow, remove the blinders – it’s the source of the content, t.v. cable, satellite, VOD, Streaming – all of these originating sources have an AGREEMENT to provide these movies digitally from the respective studio. Slingbox is basically call forwarding for the above services, and that’s ok but when the content (movie) originates from a source that does not have permission there is infringement. This is much more comparable to one on one file sharing than Slingbox.
yeah this is legal. It is like sling box. I have a sling box on my cable box and can access it when I travel it is like the same thing. And Sling Box (owned by Dish) hasn’t been shut down yet and I can connect it to my dvd player if I want and do the same as this website.
coughDIVXcough