A US federal court judge has issued a preliminary injunction ordering online DVD-streaming streaming service Zediva to shut down, finding that the service is infringing on Hollywood’s rights and that its continuing service threatens the studios’ attempt to build a video-on-demand market.
Zediva’s service lets users watch recently released DVDs over the Internet for $2, by renting out a DVD and a DVD player (installed in Zediva’s server rooms) that is controlled by a customer’s computer. The service had its public debut in March, and was sued by the studios in April.
US District Court Judge John Walter’s preliminary injunction states that: “As the copyright holders, Plaintiffs have the exclusive right to decide when, where, to whom, and for how much they will authorise transmission of their Copyrighted Works to the public.”
Zediva contends that it is more akin to a traditional video rental store such as Blockbuster, which needs no licensing agreement to rent movies, than a video-on-demand service such as Netflix, which must sign deals to stream movies to subscribers. Zediva can only rent out DVDs to one customer at a time, and makes no copies of the DVDs.
Judge Walter’s interpretation of US copyright law suggests that any streaming service is just like a movie theatre, and accordingly needs to have permission of the copyright holder.
Zediva vowed to fight the ruling and said it is working with the MPAA to set a schedule for a shutdown of its service.
The MPAA’s general counsel Dan Robbins described the judge’s decision as “a great victory” for the more than two million American men and women whose livelihoods depend on a thriving film and television industry. “Judge Walter rejected Zediva’s argument that it was ‘renting’ movies to its users, and ruled, by contrast, that Zediva violated the studios’ exclusive rights to publicly perform their movies, such as through authorised video-on-demand services,” he explained.
Zediva’s options include fighting the suit in court, or appealing the injunction to the Ninth US Circuit Court of Appeals.