The AP reports that a small California (of course) company thinks it has a brilliant idea, a way to out-Netflix Netflix: Zediva Inc. is going to make available for viewing on subscribers’ Internet devices new movies as soon as they are available on DVD. This is a big deal, because Netflix, for instance, does not do this. Netflix will begin sending physical DVDs of a new movie as soon as the movie comes out on DVD… but the instant viewing option comes later, largely because movie studios want it that way, believing that the ability of consumers to view films instantly at home cuts into DVD sales.
So just how will Zediva be able to transmit, say, “Yogi Bear” on its March 22, 2012, DVD release date? Here’s how: Zediva will buy a copy of Yogi Bear on DVD, then play it on a DVD player at its Silicon Valley (of course) headquarters, and send the feed to your home. It’s the equivalent of running a very long cable from Zediva’s DVD player to your television set. Right? Movie studios and lawyers who care about these things say no, it is not. While Zediva asserts that what it is doing (or planning to do imminently) is the equivalent of what Netflix does when it mails out DVDs to subscribers (a scheme permitted by the so-called “first-sale doctrine,” which has allowed libraries to lend books to patrons for hundreds of years), several commentators have already countered that it is more akin to Netflix’s other service, that of streaming. And a streaming arrangement requires licensing, because streaming isn’t lending a physical copy. (Some commentators are arguing that streaming somehow inherently infringes on a copyright holder’s exclusive public performance right; I don’t agree.)
I’m going to take a potentially unpopular position here (even though I am by no means required to): I think Zediva’s idea is legal, if not particularly smart. The potential for a system that might well be legitimate to devolve into something entirely outside the law, however, is just too great. That is, for Zediva to do what it says it will, it must own a separate physical copy of a DVD of a given movie for each subscriber who wants to watch it (at the same time). That means if 100 different subscribers want to watch “Yogi Bear” at the same time, in different locations, then Zediva needs to put 100 different DVDs into 100 different DVD players. Zediva simply may not cut corners and, for instance, rip the content of a DVD and then send a subscriber or two or a hundred the digital information… just until it can run out and pick up some extra copies of Yogi Bear. And, of course, Zediva may not rip the content of one DVD and then burn the content onto another hundred DVDs to be in compliance with its own (arguably legal) model. Is Zediva smarter than the average start-up? Maybe. If Zediva keeps its nose clean, it just might have something here. Eh, Boo Boo?
UPDATE: Zediva: The lawsuit.
UPDATE II: Zediva loses; is lost. But you know this ain’t over!