Will this be the death blow for a new movie-based start-up company? Hollywood sure hopes so. Controversial video streaming service Zediva is about to get hit with copyright infringement charges from the Motion Picture Association of America (MPAA) on behalf of the six studios:
Warner Bros., Columbia Pictures, Disney Enterprises, Paramount, 20th Century Fox and Universal are all represented in the suit against WTV Systems, parent company of Zediva, and CEO Venkatesh Srinivasan. At issue is Zediva’s business model, which is predicated on streaming DVDs over the Internet for as little as $1 each. The startup argues that since its service is driven by a number of DVDs and DVD players in its data center, it doesn’t need to pay licensing fees for its streaming service.
Not surprisingly, the Hollywood studios disagree. From the lawsuit:
“Unlike Netflix and other licensed online services, [Zediva’s] business is based on infringing Plaintiffs’ rights. Defendants transmit performances of Plaintiffs’ copyrighted works to members of the public without Plaintiffs’ authorization. Defendants thereby infringe Plaintiffs’ exclusive rights to perform their works publicly.”
In their complaint, the studios differentiated Zediva’s streaming business model with Netflix, Apple’s iTunes, Amazon Video On Demand, Microsoft Xbox Live, Blockbuster On Demand, CinemaNow and the Sony Playstation Network, all of which pay licensing fees for rights to stream their movies over the Internet.