completely legally.  no jolly roger or eyepatch required.  welcome to zediva.

and they’ve found an extremely novel way to do it.  it all hinges on the concept of the first-sale doctrine (title 17 – §106 and §109 should suffice ), which goes all the way back to 1908.  the first-sale doctrine puts limits on the absolute power of a copyright, saying that someone who legally purchased a legally produced copy of copyrighted material is allowed to sell, lend or give away that copy once they’ve gotten their hands on it (i mean otherwise ebay wouldn’t really be able to exist now would it?).  while that’s what allowed brick-and-mortar video rental to operate, netflix and companies of its ilk don’t operate that way – they rent you a license to watch a streamed movie.  and while you’re watching it, other people can stream it too – there’s no such thing as a “copy” really.  old places like blockbuster and hollywood video used to actually own copies of the movies – where if there’s one copy of a movie left, and customer 1 grabs it, customer 2 can’t get it.  because there’s a limited number of copies.

zediva uses that old brick and mortar model and brings it up to speed for our digital lives – they’ve actually bought copies of these dvd’s, not licenses to share. so since they own copies, by the first-sale doctrine they don’t have to wait 28 days to let users rent them.  their servers actually have dvd drives in them using physical disc media instead of using digital files, and when you order a movie, they pop it in, and stream it right to your computer.  so what you’re actually renting is a physical disc and a dvd player.  genius.  zediva founder venky srinivasan explains the logic behind the service –  “it seems like a completely reasonable thing for people to do, and that’s how it started.”  he was trying to find a way around his frustration trying to watch new release movies while travelling when the idea hit him.

otherwise, what you’re watching works like a regular dvd with player controls, even subtitles in multiple languages if you want them.  you can take a break and watch it later for a period of 2 weeks.  even if your wifi signal is low and you don’t have full connection, zediva will automatically adjust bitrate for the stream to make sure you’re not getting hiccups in playback.  they’re kicking off with about 100 titles, but there is still that one downside of operating like an old brick-and-mortar rental business – there’s the possibility that the movie you want to rent will be temporarily sold out.

so sure, they may be doing it because they think a 28 day wait is ridiculous, but their attitude is that they want hollywood to see them as a customer, not a lawsuit target.

check them out at www.zediva.com for more details.

sources:
wired
mashable
united states copyright office