One of the biggest growing sectors of online piracy is the illegal rebroadcaster. There are pirate sites that continually stream cable channels, or have Netlfix style movies to select, but Zediva is different. The service, near as I can tell, uses giant banks of DVD-ROM drives, each one loaded with legit copies of the latest movies, and you pay to rent the time on the server, from which the movie is streamed to you like a Slingbox. Sounds okay, right? Well, like with Netflix, or Amazon unbox or whatever, the studios are not getting a piece of the transaction. The low rental rates (as low as a dollar) undercut the value of their product, which in all honesty can be a problem (hence the Redbox or Netflix release windows) for a movie’s profitability, where as much as 50% of a title’s lifetime sales are made inside the first four weeks on the shelves. In the end, judging by their website, I don’t expect Zediva to last very long; I seriously doubt they have the cash or resources to lawyer up to the degree to fight a battle they will almost certainly lose in the end anyway. It’s likely to come down to this: DVD Rental requires they give a physical disc to a customer, who takes it away and brings it back in person or by mail. What they’re doing is simply providing a streaming service with a twist, and that’s just not going to fly.
Via: [Wall Street Journal]