updated 07:20 pm EDT, Mon October 31, 2011
Permanent ban follows temporary injunction
Zediva has reportedly settled its dispute with the Motion Picture Association of America, bringing a permanent end to the company's remote DVD streaming service. Following a temporary injunction that halted the service earlier this year, Zediva has agreed to pay $1.8 million in fees and put and end to its appeal and countersuit.
The company had offered a service that bridged the gap between DVD rentals and web-based streaming. Customers could rent many of the same DVDs that were available at brick-and-mortar rental outlets, however the discs were actually played on DVD players in a centralized location. Zediva's servers took the output from its DVD players and converted it into a live streaming format accessible by the customer.
The MPAA sued Zediva, claiming the service violated copyrights and lacked the necessary licensing agreements that have been established with other streaming providers. Zediva argued that its service was no different than traditional DVD rentals, as the discs were purchased legally and taken out of circulation while being played.
After imposing waiting periods between DVD releases and streaming availability, some studios have attempted to bring that same delay to DVD rental companies. Warner Bros recently attempted to force Blockbuster to a accept a 28-day wait before allowing DVDs to be rented by customers, however the rental company purchased the affected DVDs on the open market to sidestep the studio's demands and provide rentals immediately following DVD sales to the general public. [via Techdirt and Afterdawn]