Zediva's Streaming Video Loophole Closed by Judge
If you've been waiting for an invite to Zediva's cut-rate streaming video service, it might be time to give up. A federal judge has granted a preliminary injunction against Zediva on grounds of copyright infringement, which should lead to the site's closure in about one week, CNet's Greg Sandoval reports.
Zediva launched out of beta last March, with streaming rentals of new releases for $2 per night, or $10 for a 10-pack. It offered new movies before they became available through Netflix and Redbox, and didn't pay a dime to movie studios. The trick was to let each individual user rent an entire DVD player, along with the disc inside, remotely over the Internet. Zediva argued that it was just like a brick-and-mortar rental store, but with a different delivery method.
Not surprisingly, movie studios disagreed. The Motion Picture Association of America sued Zediva and argued that the service's rentals were actually performances, entitling studios to licensing fees. U.S. District Judge John Walter concurred, and has given Zediva and the MPAA a week to work out the wording of an injunction.
Even without legal troubles, Zediva had a slim chance of becoming a thriving movie service. Shortly after Zediva exited beta, it had to cut off new registrations because it couldn't provide enough DVDs and DVD players to keep up with demand, and has remained an invite-only service ever since.
Oddly enough, these service issues played into the judge's decision, as he noted that movies were often unavailable for rental. "The message that a particular copyrighted work is unavailable or ‘out of stock' is totally inconsistent with the concept of ‘video on demand,' which means it is always available, and creates a significant risk of damaging customer goodwill as customers become disillusioned, frustrated, and confused about the video on demand market in general," Walter wrote.
Zediva insists that the fight isn't over, and plans to appeal. It's a long shot, but at least Zediva doesn't have to worry about keeping its DVDs in stock and up to date in the meantime.