Zediva Shut Down By Federal Judge, MPAA Parties!

AlienIntelligence writes "Looks like the loophole that Zediva founded their business model on evaporated. Zediva's biggest problem was getting over a 1991 ruling against a similar method of transmitting copyright works. Zediva has vowed to appeal the ruling."

What Zediva Does...

[SlashdotOgre]

For folks who've never heard of Zediva, they apparently let customers stream newly released movies. Their business model was that the customers rent the DVD and DVD player which are both located at their facility, and the customers access them over the Internet. Clever approach, but this shutdown should be of no surprise.

Re:Who didn't see this coming??

[Baloroth]

Except they don't rebroadcast to multiple customers at the same time. For each person watching the DVD at a time, Zediva has one copy and one DVD player. Its almost identical to renting the physical copy of the movie, but without actually sending them the disc itself. So its nothing like broadcasting, except it occurs at a distance.

Re:Who didn't see this coming??

[wagnerrp]

No, not exactly. Their claim to legitimacy was that they purchased dozens of copies of each DVD, and thousands of DVD players paired to slingbox-type products. When the user rented the DVD, the DVD was loaded into a player, plugged into the internet streamer, and unicast to the subscriber. That DVD and DVD player were inaccessible to any other user during that time. It behaved just like a normal rental, except the subscriber did not have to physically go and pick up the DVD. The only real difference between this and a traditional rental service is the turnover rate per disc is much higher.

Public Performance

[Translation Error]

A lot of people seem confused about exactly what the court found wrong with Zediva's actions.

It wasn't that they were streaming one disc to multiple people at once (they weren't).

It wasn't that they were renting discs to people.

It wasn't because they were streaming the content of discs they'd purchased.

It was that Zediva was playing movies for other people (and taking money for it) without having the public performance rights to do so. This is the same principle that stops someone from opening a movie theatre and just buying a DVD of each movie they want to show. The 1991 case said a hotel can't get around that by having a bunch of VCRs and sending the output of each to a single hotel room, and the judge for the Zediva case found this to be no different. And he's right.