

Zediva Streams Movies From Physical DVD Players, Argues It’s Legal - kapitalx
http://techcrunch.com/2010/11/24/zediva/

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dtf
Brilliant. Makes me want to become a customer to support their sheer chutzpah.
I guess they must have done at least some legal homework. Not that it matters
much when you're baiting the attack dogs of the content industries, whose
primary fear seems not to be loss of revenue but loss of control.

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JoachimSchipper
> the content industries, whose primary fear seems not to be loss of revenue
> but loss of control.

As a matter of fact, this company is proposing to stream movies for half of
what Netflix does. I'm pretty sure that the studies get less than half the
money from this than they would get from Netflix. So yes, there is definitely
a significant loss of revenue (or would be, if this company ever got
anywhere.)

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pmjordan
Loss of revenue _per rented movie_. Depends on the degree of saturation of the
market whether it's true loss of revenue. The video streaming market in Europe
has barely been touched; iTunes movie rentals only recently opened up to more
regions, and at €3-4 per movie it's _very_ expensive compared to DVD rental.

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TeHCrAzY
It's also more difficult, and drastically more expensive than BitTorrent.

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hugh3
Yes yes, and paying for your groceries is more expensive than shoplifting too,
can we please not have the discussion where people pretend that stealing stuff
is just as good as buying it? Most people are law-abiding citizens.

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IgorPartola
Stop using the S word! Seriously. When you steal something, the rightful owner
no longer has the item. You _cannot_ by definition steal digital content. You
can merely copy it. Does that result in damages to the original owner? Maybe.
Is it stealing? No.

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throw_away
honest question: do you think identity theft should likewise be renamed?

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tomjen3
Since identity theft means that the person looses stuff (privacy, high credit
score, etc) it seems like it was perfectly named.

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prodigal_erik
"Identity theft" is merely a type of fraud. The victims are the creditors, and
what you "lose" (the opinion they have of you) never belonged to you.

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chesser
Identity theft is a much broader issue than just credit reports.

<http://en.wikipedia.org/wiki/Identity_theft>

Essentially it's a way to accrue benefits while pushing any negative
consequences on someone else. Those negative consequences can be material and
not merely opinion. (E.g., your actual bank account can be drained and your
checks can bounce.)

Further, opinion does translate into material consequences. Your options
largely depend on the opinion that other people have of you.

Even narrowly construed, a mere credit score is a source of opinion that can
affect everything from housing (buying OR renting) to employment, to getting a
cell phone or any other type of service. Straightening out your credit can be
very difficult, and even if you are successful, the fraud was a denial of
service attack against your time. Credit bureaus rarely if ever face penalties
for maintaining inaccurate information, so the onus is on the person whose
identity was stolen.

If you don't think the individual is victimized, I invite you to post all your
credentials and see where the experiment leads.

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Jabbles
And just like that, the technological world takes a step backwards. It's akin
to when Concorde was decommissioned; the standard way to sell streamed movies
may become to have a physical copy, with all the limitations that causes. This
time it's due to legal restrictions.

Whilst this change will hopefully benefit customers and help lower prices,
anyone can see that this is not the optimal solution.

~~~
hugh3
Actually I think it might work the other way.

At the moment Netflix can't get licenses to stream the vast majority of
movies. But if this business model works and is legal then Netflix can say
"Hey look, your fancy new movie is going to get streamed over the internet
anyway, you might as well license it to us".

I imagine the studios make more money on average getting fifteen cents per
watch from Netflix than selling a physical DVD to these other guys and letting
them play it until it wears out.

So this business might encourage a shift that works out to everybody's
advantage: the consumer, the studios, and the existing dominant player
Netflix. Everybody's advantage, that is, except for this guy, who finds
himself driven out of business as soon as Netflix starts streaming every title
in their library.

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oiujhygtyhuji
Or they just charge $1000/copy for 'rental' DVDs with a license saying that
the retail DVDs can't be rented.

That's what used to happen in VHS days - the rental copy to blockbuster was
$100, then 6 months later the retail copy came out for $10.

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gregschlom
I'm curious to see wich kind of legal weapon the movie companies are going to
use to fight this one.

I expect something like forbid playing rental dvds on players more than 10
feet away from the TV... This is going to be sick.

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hugh3
I think one could make a not-entirely-unreasonable argument that by streaming
the DVD you're making an unauthorized copy of the data on it.

What are they doing, after all? They read bits off the DVD, make another set
of bits which contains essentially the same information compressed, and
transmit it to a remote location. Sounds like making a copy to me.

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cma
How do you play a DVD on a modern TV? HDMI. Same exact type of "copy".

If you "rent" the player from them as well as the movie, then it is the same
fair use that allows you to play a DVD on your tv.

HDMI, or whatever--even via analog makes up to 5+ copies just to get out of a
modern TV (D->A from your player, A->D to your TV, several copies and
augmented copies into a buffer handling picture processing, scaling, and
motion smoothing, and then pixel elements in an active matrix LCD store their
values in embedded transitors, and the physical twist of the liquid crystals
is another copy, not to mention the light travelling through the air, the copy
your retina makes as it scans the TV, the persisted gradually degrading copy
that makes it into your mind)).

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hugh3
The difference being that those copies are authorized by the copyright holder
and this one is not.

You're right in that that's an obvious counterargument. I don't know how it
would play out in court. I don't wish to argue that my "this is a copy"
argument is undefeatable, but I think it's sufficiently plausible that this is
what the copyright holders will argue when it comes to trial.

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xentronium
I guess, it's actually like renting a digital copy (since most of the time it
will be served through cache, right?), just you aren't able to serve more
copies at the same time than you legally possess.

That's smart.

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A1kmm
I think if they had to argue it in court, they will present the cache as an
irrelevant technical detail, just like how fleeting copies of frames from a
DVD are stored in buffers and decoded when playing the DVD on a traditional
player.

The Doctrine of First Sale allows people to rent out DVDs, and people in
lawful possession of a physical object like a DVD to watch them (but not make
a copy); if the transient data stored in DVD players for the purposes of
decoding and playing a DVD don't count as copies.

US law explicitly gives the copyright owner exclusive rights to authorise who
can "display the copyrighted work publicly" - but if it is only going out to
one person, I suspect that they might not be able to prevent it.

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michael_dorfman
Wow, that's not a very scalable business. You need one physical DVD player for
every concurrent customer, inventory of all of the DVDs sufficient to handle
peak demand, and a small staff of bored employees keeping the right DVDs in
the drives.

In other words, you still have all of the worst features of owning a DVD
rental store.

~~~
roel_v
With a dvd player costing $30 or less retail, it shouldn't be hard to get 500
of them at $15. Hook up some IR remote infrastructure, automated switching of
the output signals and you should be ready to serve 500 customers at a time
for 25k. (for an order that size or a bit bigger a Chinese outfit may even be
willing to wire the IR receiver so that there is a direct control line hanging
out of it, ready to be hooked up the control server) He has a very small
library says the article, so not even a need to actually switch dvd's; even if
he does, two high school kids @ $7.25/hour (or nearshore to Mexico for even
cheaper labor) can keep up with switching those 500 machines if he has
automated the ejecting and sorting of the newly to insert dvd's (that is even
assuming that there are no two customers who want to the same movie, and I
think the movie rental is heavily long tail, so half of those machines will
probably have the same movie in them for weeks on end).

I'd think it's massively scalable. Not enough capacity? Call your Chinese guy
and you can double or triple it in two weeks. Or when worse comes to worst,
drive around for an afternoon and empty the bargain bins of all Walmarts in
the area.

So let's say you got labor costs of $1000/day if you keep a couple of spare
employees at all times and have them work around the clock. Depreciation of
inventory is 250/day (very generous - 50k costs depreciated in a year). Rent a
warehouse, buy paper clips, 250 a day. Thing that I'm most uncertain about is
bandwidth, let's say 300 a day? (2 gb/movie, 3000 rentals a day (see below),
0.05 cent per gb in bulk) His largest expense is going to be the lawyers,
let's say a full time one at full rate, 1000 a day.

Total costs 2800 a day. Now let's say he's running at half capacity and at all
times, only 1/2 of the players are active (on 2 hour movies). He charges $1
for each movie, way below market rate - premium content here in the EU is 6
euros, about 8 dollars, but let's say he goes for rock bottom prices. That's
still $3000 a day, putting him in the black. Including 30k+ a month in legal
fees. With every additional sale being 95% profit. If this sticks, which I
doubt it will, he's got a good deal.

(this assumes 3000 rentals a day. I don't know how much this really is.
Netflix has 10 mil subscribers, they claim; let's say each rents out one movie
a year. That's 27k a day. So you'd have to be about 10% of Netflix's size to
make that).

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Figs
Why even bother having someone to switch DVDs if you can get the players so
cheaply? Just assign a disk to a player and treat it as a unit, and don't
touch it unless it breaks. You could even wire up the unit to be controlled by
software and powered off when no one wants to watch that movie. I suppose it
would increase space usage, but it would greatly simplify operations if you
don't have to depend on a person to load and unload devices.

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omh
I imagine that the AV cabling and switches could get pretty expensive with
that many players.

~~~
hugh3
If it takes off, I imagine they'll start building some clever custom hardware.
It's not going to be an enormous rack of Sony DVD players with big black
cables coming out the back of each.

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bobf
So Zediva is pursuing the redbox strategy, except by streaming instead of
physical rental.

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dfghjkhgbfd
Most movies have a sticker on them saying not for rental (rental ones have a
sticker saying not for resale).

They could also claim this was a public performance.

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arethuza
I wouldn't mind if I could dump all my DVDs into a box, send it to someone and
have them stream them to me when I want, to any device I want.

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pontifier
That's actually VERY similar to the system I am setting up... but with an
added secret component. see an earlier post with some signup codes for the
private test: <http://news.ycombinator.com/item?id=1825578>

as of right now I believe only 2 of the codes on that page have been used.

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walkon
It would be nice if they could stream a digital version (non-optical copy),
but still buy the physical copies and keep track of how many were in use at
one time as to not "use" more than they own.

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dan00
Great! We need even more complex laws ...

