Zediva Down, But Not Out - The UpStream

Zediva Down, But Not Out

posted Wednesday Aug 3, 2011 by Scott Ertz

Zediva Down, But Not Out

Zediva, a video streaming service, started their public offering in March to mixed reviews. Zediva was formed to allow people to rent movies before they are available to RedBox and stream long before Netflix. They did this through an interesting means, though. The company has no agreements with the studios for streaming, but instead streams one-for-one physical DVDs.

While the allure of $2 video rentals was appealing, it was only a matter of time before a lawsuit came about. That suit was not far behind, coming in April. A group of studios, including 20th Century Fox, Columbia Pictures, Disney Enterprises, Paramount, Universal and Warner Bros, filed a suit against the start-up claiming copyright infringement. They claim Zediva uses "technical gimmicks" to skirt copyright law. This week, a US District Judge agreed.

To find out what he said and how Zediva responded, hit the break.

Judge John Walters has issued a preliminary injunction against Zediva, essentially shutting the company down. From his opinion,

As the copyright holders, Plaintiffs have the exclusive right to decide when, where, to whom, and for how much they will authorize transmission of their Copyrighted Works to the public... However, because Defendants operate in violation of Plaintiffs' copyrights and without any license, they have and will perform works during these negotiated exclusivity periods. Thus, Defendants interfere with Plaintiffs' grants of exclusivity to their licensees, Plaintiffs' ability to negotiate similar agreements in the future (because potential licensees will not be willing to pay a premium for a non-exclusive period), Plaintiffs' relationships, including the goodwill developed with their licensees, and Plaintiffs' overall ability to control the use and transmission of their Copyrighted Works.

Zediva says they will continue to fight, though. They clearly plan to fight the ruling, saying,

Today's ruling represents a setback for the hundreds of thousands of consumers looking for an alternative to Hollywood-controlled online movie services. Zediva intends to appeal, and will keep fighting for consumers' right to watch a DVD they've rented, whether that rental is at the corner store or by mail or over the Internet.

So, what do you guys think? Is Zediva breaking the law or are the studios mad that Zediva found a loophole in the copyright stranglehold? Let us know in the comments section!

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