Motion Picture Association Sues to Block Zediva Movie Streaming Service

The Motion Picture Association of America, representing the major Hollywood studios, filed a copyright infringement lawsuit against the operators of the movie-streaming service Zediva.

Zediva illegally streams movies to its customers without obtaining required licenses from the movie studios, in violation of the studios’ right to “publicly perform” their works, the MPAA said today in an e-mailed statement.

The closely held company, based in Santa Clara, California, offers 14 rentals of new-release DVDs for $2 per movie, or $1 when ordering 10 films. That undercuts what cable companies charge for on-demand and is less than the $3 that Time Warner Inc. (TWX) began charging in a test of 24-hour rentals on Facebook. Zediva likens the service to those offered by DVD retailers.

“Zediva’s mischaracterization of itself is a gimmick it hopes will enable it to evade the law and stream movies in violation of the studios’ exclusive rights,” Dan Robbins, the MPAA’s associate general counsel, said in the statement. “Courts have repeatedly seen through the façade of this type of copyright-avoidance scheme, and we are confident they will in this case too.”

Zediva didn’t immediately respond to a request for comment sent by e-mail through its press office.

Low Prices

The company can offer low prices because it doesn’t pay studios to license their films, Venky Srinivasan, chief executive officer of Zediva, said in an interview last month. Zediva purchases DVDs as consumers do, and loads them into hundreds of DVD players in a central office. The service offers “long-distance rentals” of both the movie and DVD player, he said.

“You rent just like you would at Redbox or Blockbuster, only you don’t have to go anywhere to do it,” Srinivasan said.

The studios’ complaint alleges a single count of copyright infringement against WTV Systems, the parent company of Zediva, and Srinivasan, according to the statement.

The complaint, filed in federal district court in Los Angeles, alleges that the defendants violate the plaintiffs’ exclusive right to “publicly perform” their movies under Section 106(4) of the Copyright Act.

The studios seek unspecified damages and Zediva’s profits from infringing their copyrighted works, or statutory damages of $150,000 per violation, and a court order stopping Zediva from further infringement.

The case is Warner Bros. v. Zediva, 11-2817, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Cliff Edwards in San Francisco at Cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net.

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