May 27, 2011 9:35am PT by Eriq Gardner
MPAA Moves to Shut Down Online Streaming Service Zediva
The Motion Picture Association of America asked a federal judge on Thursday to grant a preliminary injunction to stop Zediva, an online movie rental outlet, from operating.
Zediva is the latest in a long line of upstarts to look at how Hollywood does business with release windows and bifurcated rights and think there must be a simpler way.
In Zediva's case, the company saw that on one hand, brick-and-mortar DVD rental stores are allowed to rent its users the latest DVD releases, and on the other hand, online streaming services like Netflix can't because of a perceived need to get permission from Hollywood studios.
So Zediva cut through the red tape by splitting the middle: The company believes it operates a DVD rental store. The only difference here is that its customers rent both DVDs and DVD players and remotely control each over the Internet. By doing it this way, Zediva claims that it doesn't need Hollywood approval. The studios, unsurprisingly, are challenging that assessment.
Is Zediva exhibiting films to the public or merely giving individuals a more convenient way to enjoy rented films privately?
The question of "public" vs. "private" may seem trivial semantics, but it's likely to make the difference in the outcome of the dispute.
"It defies common sense to say, as the Studios do, that putting a longer cable between a DVD player and its single viewer transforms a private performance into a public performance," said Zediva in its answer and counterclaim on May 16th.
The MPAA see things differently.
"Defendants omit the fact that what they call a 'very long cable' is in fact a transmission over the Internet, and not the handing over of a copy to a user," says the MPAA in its motion filed Thursday asking for an injunction. "The transmission is what makes Defendants’ conduct a public performance under the statutory definition."
If a court sees what Zediva is doing as a private performance, it's possible that it will come down similar to the way that courts did when Cablevision announced it was going to let subscribers store TV programs on its remote servers. The entertainment industry objected, but the Second Circuit Court of Appeals denied its attempts to kill the service, ruling it was a private performance.
The studios are confident, though, that courts will see what Zediva is doing as public exhibition. One of the cases it points to is an old one where a brick-and-mortar shop transmitted movies from videotapes to customers in private 4’x6’ exhibition booths in the rear of the store. The Third Circuit deemed this to be a public performance, not a private one, and found it illegal.
Both the MPAA and Zediva are bringing top intellectual property lawyers to the fight. On the MPAA's side are attorneys from Munger Tolles & Olson, who helped to destroy Limewire. On Zediva's side are attorneys from Durie Tangri, who have represented Google and Comcast, as well as Mark Lemley, one of the most influential IP scholars around. Both the technology and entertainment industries are watching this battle closely.