Zediva: A different kind of virtual video store

by Chris Ratner on May 19, 2011 · 3 comments

in News

If you’re like me, you have a collection of DVDs and Blu-Rays that you love to watch. My favorites are Lord of the Rings, Star Trek and The Dark Knight. Fortunately, I don’t fumble around with discs any more since 95% of my movies are being served from my Windows Home Server to points around my house. I own the movies I care about and relegate those that I don’t to Netflix.

Sometimes, I miss a movie in the theater, so the next time it is available is when it is released on DVD and Blu-Ray for purchase. You know the drill, if you want to see it on the day it is released, you’re paying $29.99 (or more) for the 2-disc special at Best Buy. It’s going to be weeks, if not months, before it is available for streaming to a TV in your house. So what is moviephile to do? According to Zediva, you can start streaming it on the day it is released.

Zediva has taken a rather unique, albeit controversial, approach to watching newly released movies on disc. Instead of simply renting you a physical disc, Zediva rents you a physical DVD player along with the disc over the Internet so you can watch it immediately. Yes, you understood that right, them movie you are streaming is coming from a physical DVD player in Zediva’s data center (not a hard drive). By renting a physical player, Zediva avoids the “public performance” protection imposed by U.S. Copyright Laws.

Last month, the Motion Picture Association of America (MPAA) hit Zediva with a lawsuit effectively asking them to cease operation, citing that Zediva is a video-on-demand (VOD) service streaming movies that they are not authorized to stream. Zediva is claiming that they are a rental service renting both player and disc. Technically, this seems like a valid loophole that Zediva is exploiting — they’re basically place shifting the equipment along with the disc thereby creating a one-to-one distribution model similar to brick and mortar stores (like Blockbuster), where as Netflix instant streaming is a one-to-many distribution model with a different set of rules. As of this writing, Zediva has yet to responded to the lawsuit.

Although not explicitly stated, money is at the heart of this lawsuit. Netflix pays a hefty premium for the rights to stream content to the masses while Zediva does not. Furthermore, there is a lot of money at stake with the sales of movies on disc. As a result, some studios are imposing a 28-day delay period on RedBox and Netflix, making them wait before they can rent the movies, thus maximizing the sales potential of the new movies through traditional retail channels.

On a more practical front, scale is the long pole in the tent with all on-demand services. Since Zediva rents discs and players on a one-to-0ne basis, the amount of movies they can provide on-demand is limited to the number of physical players and discs they have in their data center. Consider that Netflix streams movies daily to a few million of their 23 million subscribers. Now imagine one dvd player with one disc inside each player multiplied by a tenth of Netflix’s subscriber base. The data center would have to be mammoth to store 2,300,000 DVD players, not to mention the power, cooling and overhead requirements to keep those moving parts running smoothly (I’m just guessing at few obvious problems, I’m not an expert on this). To me, the model doesn’t scale well long term considering one of my hard drives contains over 200 DVD quality movies (for my own personal viewing) and takes up a drive slot in my home server.

Zediva is attempting to start a new type of “virtual” video store with all the same conveniences and inconveniences of a brick and mortar store (see pros/cons below). Is this new streaming model something that will catch on? I don’t know. Despite my concerns, the service looks like it could be fun (while it lasts). I haven’t tried the service yet, they currently don’t have the capacity to add additional subscribers at this time (looks like that scale issue I mentioned is already causing problems for them).

Here are some key take aways as you go and explore the service:

Pros

  • You can watch the movie the day it’s released on disc
  • Cheap, only $1.99 per rental, $10 for 10 rentals (good value)
  • Pay with all major credit cards and PayPal
  • Receive email notification when a movie is available for rental (remember, they only have so many discs and players they can rent)
  • PC, Mac, Google TV and Android devices 2.1 or later are currently supported.
  • 14-day rental window

Cons

  • No iOS and console support yet, although it appears to be planned
  • No Blu-Ray, also planned
  • No HD content, this is planned, too
  • If you choose the Rent-by-Mail option, you’re going to pay shipping charges on top of the movie charge
  • They actually recommend you insure your rental disc when shipping it back – crazy!
  • Capacity is currently maxed out and they’re not taking any more subscribers at this time, but you can sign up to be notified when more slots become available

Here is an interesting video overview of the service that shows how the DVD player controls work and has some images of the Zediva data center.

What do you think? Is it important is to you to stream movies the day they are released on video? Do you think this new kind of video service will last against Netflix and RedBox?





Article by

I'm a technology enthusiast who loves to tinker on the weekends. My house is filled with tech, including a WHS v1 used for general file storage and DVD/BD streaming to the various XBOX and Windows 7 receivers around my home. I also play around with home automation using an ISY 99i and various Smarthome Insteon plugs and switches. There never seems to be enough time on the weekends to get to everything on my list. :-)


{ 3 comments }

Alex Kuretz May 19, 2011 at 9:48 am

I usually have enough on my plate that I’m willing to wait for a movie to be available on Netflix if I don’t go see it at the theater. I also find the premise of renting a virtual DVD player to be a bit comical, but the idea is pretty awesome to exploit such a loophole to satisfy those customers that want the movies right away. Thank goodness this didn’t happen back in the days of VCRs, can you imagine waiting for the tape to rewind after the previous customer watched it? :)

Damian May 19, 2011 at 2:15 pm

Very interesting loophole. I agree, long term I don’t see this as a viable business plan (if assuming part of their business plan is to grow). With the kids at home the wife and I rarely go out to the movies any more, and even have a tough time watching movies at home. As such we are quite backlogged with our movies, so the 28 day Netflix Window really has very little impact on us. If there is a movie I definitely want to own I usually purchase on day one. Anything else that I may have a passing interest is I just wait.

I just picture some guy in this massive warehouse all frazzled, running around with a shopping cart of DVDs trying to load them frantically as requests come in!

Comp1962 May 25, 2011 at 6:40 pm

Its an interesting concept and I know where there are some huge buildings available that could probably fit enough DVD Players to keep up with demand but I would hate to see the electric bill not from running the players but for the Air Conditioning to keep the place cool although in winter its free heating. I wonder how many people they have to employ to change out the disks. Its an interesting thing but how do you grow something like that to keep up with customer demand. It may be intersting to see what becomes of this.

For me I am always buying movies to add to my collection so I have my own video on demand system both here in the house and from anywhere with an internet connection. Who knows what the future will bring maybe the physical media will cease to exist and we just purchase digital copies as is being done with music. Anyway I never have time to catch a movie and most of the time the first time I see a movie is after its released on DVD and sometimes I just wait for the price to drop then buy.

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