Zediva halts online DVD streaming rental operations per court order

The unique DVD rental company Zediva received a court order to shut down earlier this month. And this week, its owners have complied. Customers hoping for a comeback should temper their expectations. Despite Zediva’s promise to appeal the ruling, a message posted at its website offers little hope.

Zediva halts online DVD streaming rental operations per court order

Zediva’s “Intermission” statement attempts to justify the controversial concept:

You may have heard by now that we’re having to lay off our DVD-changing monkeys… 🙂

A couple of years ago we came up with an idea for the next generation of DVD rentals. It seemed to us logical and evolutionary that if a customer was able to rent and play a DVD in his home, there should be no reason why he or she could not do that from the Internet cloud. After all, you can do that with a DVR, so why not with a DVD player?

Well, it turns out to have been a little more complicated than that …

We are suspending Zediva’s operations to comply with an order by the United States District Court for the Central District of California.

While we hope to be back online soon, we don’t know when (or whether) that will happen. We are disappointed by this turn of events, and that we are not permitted to serve you.

We are quite aware that some of you have unused credits with us and appreciate your patience as we figure out our next steps. Stay tuned for more information via email.

Thank you again for your great support. It has been a blast serving you.

Zediva was told to close up shop by U.S. District Court Judge John F. Walter after he drew comparisons to a similar case from 1991. In that case (.pdf), Judge Stanley A. Weigel ruled against On Command Video Corporation, an early video streaming service which catered to hotel owners, for copyright infringement. The company played legally purchased movies from a hub to hotel patrons’ rooms. A rented movie was only viewable in one person’s room at any given time according to the court documents. In many ways, it worked exactly the same as Zediva’s operation – albeit on a much smaller scale.

Zediva touted itself as a DVD rental company not unlike Blockbuster. The company purchased movies the same as anyone else would, just in larger quantities. Then, it rented those movies out to customers. Each renter was granted complete access to one particular “stream,” which was the disc being played at Zediva HQ.

Critics questioned early on exactly how legal the whole process was. It took not even a month for several movie studios to band together in opposition and file a lawsuit against Zediva.

The MPAA applauded the victory.

“Judge Walter’s decision is a great victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry,” said Dan Robbins, Senior Vice President of the MPAA and Associate General Counsel for the MPAA. “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 authorized video-on-demand services.”