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Court Shuts Down DVD Streaming Service Zediva
By Daniel Robinson – Edited by Kassity Liu

Warner Bros. Entertainment Inc., et al. v. WTV Systems, Inc., No. CV 11-2817-JFW (C.D. Cal. August 1, 2011)
Slip Opinion

On August 1st, the District Court for the Central District of California granted a preliminary injunction ordering Zediva, an online video service, to shut down.

The order, by Judge John Walker, held that the Plaintiffs Warner Bros. and other movie studios were likely to succeed on the merits of their copyright claim, and that the potential harm the service posed to the plaintiffs outweighed the burden of an injunction on the defendants. In so holding, the court held that the defendants’ service violated the plaintiffs’ public performance right by transmitting content from DVDs to its subscribers.

Reuters provides an overview of the case. Techdirt criticizes the decision, arguing that streaming a DVD to one customer is not a “public performance.” Ars Technica provides a detailed description of the holding.

Zediva allows customers to watch movies online by streaming the digital signal from physical DVD players housed in its data center. The defendants argued that because this system is analogous to a DVD rental service, in that only one customer watches a DVD at a time, they are not required to obtain licensing rights from copyright owners. The plaintiffs disagreed and filed suit, claiming that Zediva violated their public performance right.

In holding as it did, the court applied the language of Section 101(2) of the Copyright Act, which states that a performance is public if someone “transmit[s] or otherwise communicate[s] a performance or display of the work… to the public.” The court, drawing on Columbia Pictures Industries, Inc. v. Redd Horne, 568 F.Supp. 494 (W.D. Pa. 1983), held that since Zediva’s relationship with its customers was “a commercial, ‘public’ relationship,” the transmission was to the public, and the fact that customers viewed the transmissions separately and at different times was irrelevant.

The court also held that the plaintiffs were likely to suffer irreparable harm to their revenue and their relationships with their licensees, and that the defendants, by confusing customers about the legal and technical constraints on online streaming, could threaten the viability of the market in video on demand. It therefore held that a preliminary injunction was warranted.

The opinion is important, not only because it will require Zediva to shut down, but because it is likely to increase the power that copyright owners will have over the growing market in video on demand. The holding eliminates a potential alternative to content distribution systems owned or controlled by studios, and the court’s language implies that the success of streaming videos depends on giving copyright owners greater control over the technology by which they are delivered.

Posted On Aug - 12 - 2011 Comments Off

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