Hollywood studios sue VOD start-up
Zediva thought it had found a copyright loophole that would allow it to 'rent' digital copies of movies to its users without paying any royalties or fees to studios.
A user would pay $2 to play a movie for two weeks; and while the movie was rented, the company, which held a certain number of physical copies of that DVD, would put one copy out of circulation.
According to San Francisco Chronicle, in the suit filed in US District Court in Los Angeles, the members of the MPAA claimed Zediva is illegally streaming the movies without paying licensing fees to the studios.
“Companies like Zediva profit off creators without paying them what is required by the law,” Dan Robbins, the MPAA's associate general counsel, said in a press release.
A Zediva spokesman said the company was considering how to respond to the lawsuit, writes the Wall Street Journal.
On Monday afternoon, Zediva.com was not allowing new users to get beyond its home page, saying registration of new customers was “temporarily full”.
The MPAA's members - Warner Bros Entertainment, Sony Pictures, Paramount Pictures, Twentieth Century Fox, Universal Pictures and Disney Studios - asked that the site be shut down and ordered to pay monetary damages that could reach millions of dollars.
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