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NEW YORK (Reuters) - Zediva Inc, a startup, said it has launched a new service that lets customers watch movies over the Web the same day they are released on DVD, avoiding the usual delays required by film studios.
At a cost of $1.99 a rental, Zediva is the latest company looking to shake up Hollywood's traditional business model, joining popular rental services such as Netflix Inc and Coinstar's. Netflix charges $7.99 a month for its streaming service.

Note: First sign up gets 2 free movie credits . Offer 1 per household

http://www.ktva.com/news/technology/?feed=bim&id=118082409
 

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Its service allows a user choose from an online menu of movies, then remotely rent that DVD as well as a DVD player, both of which are stored at a Silicon Valley data center. Zediva then uses the DVD player to stream the movie over the Web, to a laptop, smartphone or TV.
It'll be sued out of business in a week.
 

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From Reuters today

Zediva Inc, a startup, said it has launched a new service that lets customers watch movies over the Web the same day they are released on DVD, avoiding the usual delays required by film studios
How is that 5 months old?
 

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The service has been in beta for a while and just launched. Pretty neat idea. They actually purchase the physical DVD, play the movie, streaming it over the internet. They can only stream as many as they have physical copies. They are essentially renting the movie to you.

Perfectly legal.
 

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Interesting piece by CNET.

While it appears to meet the letter of the law

Furthermore, the place-shifting service Slingbox is legal, and so is the concept of the "networked DVR," which is conceptually similar. Media industry disruptor Michael Robertson explains a key place-shifting ruling: As long as the consumer is pressing the buttons--even remotely--it doesn't matter where the video stream comes from. This argument may be extended to include the playback of rented DVDs. Zediva has not yet be challenged in court, Srinivasan says, but his company is "adequately capitalized" to mount a legal defense if necessary. (He would not disclose details of his financing).
It's hard not to imagine the studios will try to do everything possible to shut it down.
 

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I'm not certain. I don't see anything illegal about it. They have a licensed copy of the DVD for rental. That is all they are doing. The delivery mechanism is irrelevant.

I think the studios won't litigate, because if it is deemed legal by the courts, it will become very visible and open the door to many copycats. What would stop anyone from creating a similar service. No need to negotiate with studios or get DRM rights.. just purchase the DVDs and stream to your customers.

Anyone want to go into this business??
 

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As I said, it appears to meet the letter of the law but that doesn't mean the studios won't try to find an angle to shut it down.
 

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Hugh's right that the movie cartel knows no limitations either legal or moral when it comes to trying to block any form of change or competition.

Then again many people, perhaps Hugh included, said Netflix would be sued into extinction too, and they're still around.
 

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The movie studios would be taking a big risk if they set their lawyers to attack mode and direct them at this service: a judge could simply reaffirm that it is indeed legal and suddenly a lot of companies will start emulating this model. Hell, Blockbuster and Rogers video could do this with their existing libraries of DVDs and suddenly become a iTunes competitor. Since there is apparently legal precedent on the side of this company it could be a very short case.

I think this business model innovation will either make the studios raise the prices of rental DVDs (and companies like Blockbuster will just be canon fodder) or they will end up lowering the prices of movie rentals on the likes of iTunes and Zune to compete with this new service model.
 

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Then again many people, perhaps Hugh included, said Netflix would be sued into extinction too, and they're still around.
I said no such thing and I'd appreciate you not suggesting I did.
 

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Recap on their first week from Zediva Blog

They closed registration and have yet to re-open

Launch Day Recap
What a difference a day makes! On Wed March 16th we officially launched!

When we spoke to the press, we sensed that they were excited by the story. Though we could hardly imagine what was to follow. Just about everyone we spoke to, immediately published a story. Within a day, we were covered in The New York Times, Wall Street Journal, just about every major news outlet -- and dozens of others. Getting featured on the Yahoo! homepage drove huge volumes of traffic our way, and our servers got overwhelmed.

We were disappointed that we couldn't handle the traffic. It meant that we weren't available for our new or returning customers -- this was upsetting; we aim to be a very customer focused company, and here we were on day one, disappointing you. We had a long night, but were back in business just after midnight. (We fed the monkeys too!)

We are fortunate that many of you were patient enough to join our waiting list. We now have the opportunity, and obligation to build the service you want, and get you off that waiting list as soon as we can. Stay tuned - we will soon provide more information to those on the waitlist.
 

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Well, I guess this confirms that there is quite a bit of demand for this sort of service.

The most exciting part about this is that up until now, to get into the streaming video business you had to negotiate content licensing with each movie studio individually. This is a pretty substantial barrier to entry.

If it turn out anyone can get the necessary license to stream videos by simply buying the same "license" that video rental outlets buy when they buy their DVDs to rent, this could turn the streaming video industry on its head! Imagine how awesome the Netflix content library would be if all it needed to stream a particular movie was to buy a bunch of DVD rentals of that given movie (or TV series DVDs).
 

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Damn! And I still have a one-movie credit with them ($1 in value)…what a waste. ;)

Not surprised to see it go, but it was fun while it lasted. Gave me a good movie to watch while stuck in a hotel room a couple times.
 
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