Six Hollywood studios are suing an Internet movie-rental site, Zediva, claiming the Silicon Valley start-up infringes their copyright by streaming films over the web directly from DVD players.
Zediva streams movies shortly after they are available on DVD – but weeks before legitimate sites such as Netflix have them available. Its members pay as little as $1 (61p) to stream the new releases over a two-week period.
Sony, Time Warner, 20th Century Fox and Walt Disney – argue Zediva needs a specific licence to play the DVDs, which they deem a public performance. Zediva’s claim to be a traditional DVD-rental firm, such as Blockbuster and Lovefilm, is “a sham”, the film studios asserted.
Zediva claims it exploits a loophole in copyright law that means it does not have to pay royalties. Venky Srinivasan, the founder and chief executive of Zediva, last month told the FT that its approach is founded on the age-old principles of DVD rentals – albeit on the internet – and so would be difficult to challenge on legal grounds. The individual renter is able to control the DVD player directly, over the Internet, in a way that resembles other services such as Slingbox. Zediva’s argument is that it is effectively renting a DVD player to each user to let them watch the film – but the DVD player and the user are in different locations.
“We are fairly confident that the law allows a user to watch a DVD they’ve rented and we’re actually building upon these other ideas to offer a very compelling service,” Srinivasan said.