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Zediva is a new player with an interesting twist in the online DVD rental game. When you rent a movie on Zediva, you are not only renting the disc, but also a player at the company’s data center, and the title is then streamed to you. Once you have rented a film, you have up to 14 days to complete watching the movie.

Pricing is based on a credit scale, with individual credits currently costing $1.99 and packs of 10 priced at $10. Downloads are not currently available, but users can elect to have titles shipped to them for a nominal fee. Titles can also be watched again during the 14-day period as long as they are still available.

Title selection is fairly limited right now, but the company’s FAQ claims that it will be working to grow both its capacity and selection of movies in the coming year.

Michael here at Inside Redbox recently tried the service out on his GoogleTV and made the following observations:

  • The streaming quality is acceptable, but not great—comparable to DVD
  • Surround sound is not an option, which may be fine for children’s shows but could be disappointing for effects-heavy titles
  • The service is extremely simple to use, with no plug-ins or downloads required. It will even skip through the ads that usually precede the feature on a DVD

Overall Michael was impressed, but wondered if Zediva’s costs might skyrocket as the service becomes more popular and requires more employees at the data center. It all depends on the company’s level of automation and how many customers it can handle at any given time.

With a 10-pack of credits equalling the cost of ten Redbox rentals, would this new service be of interest to you, Insiders? Do you think enough people will find Zediva’s new offering compelling for the company to take off?

(via Zediva.com)

33 Responses to “Zediva Offers New Take on Online Movie Rentals”

  1. Visitor [Join Now]
    JBG [visitor]

    “…you have up to 14 days to complete watching the movie.” Hmmm, anyone remember DIVX (the failed Circuit City attempt at “timed renting”)? I don’t see this one fairing any better. If only all those companies would focus on providing better quality service rather than ingenious schemes for fleecing the customer…

    • Administrator
      Michael [administrator]

      I am not sure I understand what you are getting at here. Basically, you are renting a DVD from these people, without the actual DVD having to be in your possession. You can “keep” it for 14 days, which means you can watch it once or 100 times, as long as you do it within the 14 days, and you will only be charged once for the rental (currently $1.99, or $1 with the prepaid credits).

      There is certainly no fleecing of the customer involved. I think this is one of the best values in movie rental I have yet seen, but it remains to be seen if it can be sustained in the long-term. It will be interesting to see what happens.

      • Visitor [Join Now]
        firstlawofnature [visitor]

        Fascinating idea. No doubt the studios would absolutely hate this idea. Litigation over this issue would seem likely. Seems to hold up under first sale doctrine but perhaps not. Easily copied by netflix and redbox if indeed a legal service.

        • Administrator
          Michael [administrator]

          If it is legal, I still don’t see Redbox or Netflix copying it. They have both just recently improved their relationships with the studios, and I don’t think they would risk that again. Doing this would certainly put them at risk.

          Zediva is an interesting idea that could have a profound effect on the market, similar to how Netflix and Redbox have. It just puts more pressure on the studios to change the way they do business, all to the benefit of the consumer.

        • Visitor [Join Now]
          firstlawofnature [visitor]

          Even if legal I agree that they might not copy it initially or ever. Very hard to rent VOD at $4 or $5 when someone is doing it for $2 or less so I think if the courts did support this business model that other players would be forced to join the party.

          Even though the site is in beta it is quite crude. They probably don’t have much capital if I had to guess. I won’t knock them on that basis though. I give them a fighting chance but would expect heavy legal bills if they get any traction on the service or make the jump to the TV.

          The poor studios just can’t catch a break these days. Check on the news on comcast/level 3/netflix. Very interesting times.

      • Visitor [Join Now]
        JBG [visitor]

        How is it not clear? This is just another scheme where proprietary technologies are used to constrain the ability of the customer to view the content freely. Unless I am misunderstanding the online FAQ of Zediva (and I’m pretty sure I’m not), this is just another online software interface where it absolutely does not matter whether you have an actual DVD in an actual (physical) DVD player – it is still subject to all the issues you would have if it were streamed off of disks on their servers: software incompatibilities, Internet connection problems, licensing and authentication failures, etc., – you name it – could still happen with this, just as with any other online service.
        I am not saying it is worse than most others, and I’m not claiming that Zediva is specifically trying to fleece their customers; what I am saying is that a ton of resources are spent (and wasted), most of it under the undue pressure of the Studios, to make life complicated when it comes to movie rental. For example, I like RedBox because the DVD medium already exists, they are not inventing it; they just make it easy and cheap for their customers to have a DVD in their hands (for an agreed amount of time). Unless someone comes up with something that is a real improvement, anything else is a waste of time for people who are employed in it, and who could be dong more productive things, and are diluting the market (which is more than varied right now) with non-viable solutions to a problem that doesn’t even exist.

        • Administrator
          Michael [administrator]

          Lets be honest here – DVD and blu-ray are both designed to “constrain the ability of the customer to view the content freely.” I can’t freely/legally circumvent my discs copy-protection and store them on my computer.

          I agree that Redbox is nice and simple, and they are simply using an existing medium. But, if you don’t think streaming is the future of media, you are only kidding yourself.

          The “problem” being solved here is convenience. And, as far as I can tell, Zediva currently has the highest convenience to price ratio I have seen yet.

          • Visitor [Join Now]
            JBG [visitor]

            The constraints in the disc are minor and few of them are backed by the law (e.g., who can sue me if my DVD player allows me to skip the annoying previews?) This service is just adding a ton of additional constraints but, most importantly, it adds the major insecurities that I listed above and which could cause you to NOT be able to watch the DVD at all. I shouldn’t have to waste my time to go after my rights with “limited” customer service.
            Whether streaming is the future or not remains to be seen but that doesn’t seem to be indicative of whether it is the right thing to do (history is full of examples of “progress” that was anything but).
            Convenience is very relative and in my case this would be more like inconvenience. How about those people who do not have fast broadband? And with prices going up (re: talks about tiered pricing of all Internet services), we should start adding that price to the rental. How about if I can’t get to watch the movie at all (because their service in not available when I can watch it, or my Internet is slow, or my PC crashes, or…)? Do I add the price of that? How much would it cost for the aggravation? At least with physical media, if I experience a problem, it is pretty much all my responsibility (and Zediva is subject to all of those issues, too).

            I apologize if I come up a little overly sensitive but that is because I am partial to this: I produce quality industrial software for the manufacturing (which is highly productive) and I hate it how people waste their talents in trying to make quick money with useless Internet services, catering to the basic human desires (like quick money, in the case of financial services, and entertainment, as with movies and TV). “Panem et circenses” is all we see…

  2. Member [Join Now]
    s142424

    I would be interested to hear more about it.

  3. Visitor [Join Now]
    Becky [visitor]

    Sounds pointless to me. Same price or more expensive than redbox, you have to pay shipping, and the quality isn’t as good as a dvd? No thanks. it’s not like I want to watch a jovie over and over for two weeks

    • Visitor [Join Now]
      firstlawofnature [visitor]

      I’d guess they’d expect most to watch their DVDs over the net and not take actual delivery. Offering actual delivery probably designed to enhance their arguement that the service isn’t true streaming.

    • Administrator
      Michael [administrator]

      I think you are missing the point, actually…

      No one is going to be paying shipping, I wouldn’t imagine. Who would want to have it shipped to them when they can watch it immediately without waiting for the mail?

      The 14-day rental period is just an extra, really. You are paying $1.99 to rent a new release, and not having to go anywhere to get it. That is the point. And, that is what the studios need to be offering with their streaming partners, too. If the studios hate Redbox so much, the sure way to kill them is offer new releases streamed to your TV for under $2.

      If I could rent new releases for that price easily, I wouldn’t be using any by-mail (Netflix) or by-car (Redbox) services anymore. Would you?

      • Visitor [Join Now]
        Russ [visitor]

        The real problem for Zediva is that if it’s legal then Netflix can adopt a similar option rather quickly since Netflix already owns so many physical copies.

        This of course assumes that Zediva is an independent company.

        • Administrator
          Michael [administrator]

          I mentioned this is an earlier post, but I don’t really see companies like Netflix or Redbox doing this, considering their current relationships with the studios.

          The licensing agreements they have are quite complex, and messing around with something like this would cause problems with the studios, legal or not. Redbox has always been legal, but the studios didn’t (and still don’t, really) like what they were doing.

          Really, what Zediva is doing is similar to what Redbox did, but they are doing it online instead of through kiosks. It will certainly be interesting to see how it all turns out.

          For me, I will be watching “Scott Pilgrim vs The World” through the service today, a title I can’t get on Redbox or Netflix yet.

  4. Visitor [Join Now]
    rg [visitor]

    Netflix has already dominated this area with their streaming options. $8 for unlimited streaming with a fairly sizable library. So technically through netflix I can stream 30 movies for $8 as compared to $60 using zediva. No competion there.

    • Visitor [Join Now]
      firstlawofnature [visitor]

      Zediva will have new releases so comparing to netflix stream is not apples to apples.

    • Administrator
      Michael [administrator]

      flon is right, here. You can’t compare new releases to the catalog titles Netflix offers for their monthly fee.

      Plus, currently 30 movies with Zediva is $30, not $60.

      There are problems, of course, as Shane mentioned in the post. It is the lack of bluray quality picture and sound that make it less of a winner for me, but that is common among almost all streaming services. I think Vudu is the only service out there right now that offers 1080p quality streaming, but the bandwidth requirements are quite high to get it.

    • Visitor [Join Now]
      siouxzeigh [visitor]

      It may not exactly be apples to apples, but I’m much more inclined to sift through Netflix’s many titles and watch an unlimited number for $8 a month than spend the money on Zediva as my main movie source. Given the price difference, I think most times it would be worth it for me to just wait until the title comes to Netflix, Redbox, or I see it at someone else’s house. Currently I use Redbox just as an occasional supplement to my 1-dvd at a time Netflix plan, and for that it’s been useful.

      TL;DR?: I can see Zediva maybe replacing Redbox as a (more) convenient way to watch new releases. Netflix, however, still has them beat by far overall.

    • Visitor [Join Now]
      Joseph Nestra [visitor]

      Try watching Inception on Netflix or Redbox today. The point I think Zediva is trying to offer movies AS SOON AS THEY COME OUT ON DVD. The majors can’t seem to be able to do that without upsetting their studio contracts.

  5. Visitor [Join Now]
    Moon [visitor]

    Doomed to fail. And probably quickly too. Would you invest in this company if you had a spare 20k lying around? Doubtful…very doubtful…

    • Administrator
      Michael [administrator]

      If I knew for sure it was legal… yes I would.

      • Visitor [Join Now]
        firstlawofnature [visitor]

        There’s the rub. I’m guessing here but I think Zediva has an arguement. There is a chance a judge might think it falls under FSD. Not the 9th circuit but maybe some other judge.

        No one in the established infrastructure of production and distribution will have a kind thing to say about these ‘pirates’ but they hated the red companies as well early on.

        • Visitor [Join Now]
          Tee [visitor]

          There is no argument, it’s illegal.

        • Visitor [Join Now]
          Firstlawofnature [visitor]

          A user is watching and controlling a DVD player remotely. I’m not so sure that this would be considered illegal by a judge. I’m not going to argue the merits because I think it’s still a long shot but this is a different activity than what has been tried before.

  6. Visitor [Join Now]
    Tee [visitor]

    The way it was explained to me was, as soon as you change the physical media to digital (without approval from the studio) you are in violation of copyright laws. Obviously no big deal if it’s your own “back up” but for distribution not a chance, First sale doc. does not cover this!!! Come on stop and think about it.

  7. Member [Join Now]
    Casey4147 [casey4147]

    Wouldn’t this fall under the “licensed for personal viewing” issue? Legally, you’re not allowed to play a DVD to a theater-full of people, are you? This seems like an abuse of that, somehow…

    • Visitor [Join Now]
      Russ [visitor]

      Depends on how the service operates. If the service owns only one copy of, say, Avatar, and someone decides to use a credit to rent/stream it, AND if no one else can rent/stream it until the previous user “returns” it, then technically it is being shown to one user and not a theater full of people.

      • Visitor [Join Now]
        Tee [visitor]

        Does not matter, once they convert the movie from the disc to stream it, (ie. send it out digitally) they have broken the copyright law. I presented this to 2 studio’s 4 years ago. Only with the permission from the studio would they legally be able to do this. The only people who stand to make a profit from this will be attorneys.

      • Visitor [Join Now]
        Joseph Nestra [visitor]

        It seems that is exactly what Zediva is doing. I found all copies of popular movies are always rented out during evening hours. Studios will hate this but it seems like they are simply giving you an extra-long remote control to watch a DVD. They are only streaming to the (single) renter, not to a theater-full. Would stand up under the first sale doctrine. Or would you argue that because you are streaming your rented Netflix DVD to send it digitally to your own TV you are violating copyright law?

        Their bigger challenge is trying to buy enough DVDs to meet up with peak demand and then cycling through new titles fast enough.

  8. Member [Join Now]
    starman15317

    This reminds me of Divx. That means it’s going to fail.

  9. Visitor [Join Now]
    John Small [visitor]

    This will likely be shut down shortly. What they are doing is not legal.

  10. Visitor [Join Now]
    Rational [visitor]

    Here’s a technical issue: for those claiming that renting a physical DVD is preferred by some because they can illegally copy it, let me remind you that absolutely everything can be copied. Including the video from the Zediva proprietary player. In the theoretical realm, no matter how encrypted and protected the software player is, it still needs to produce a video image on the screen, and we know that even HDCP streams (like those of the super-paranoic satellite TV) can be intercepted and copied (full HD “Star Wars” freely available, anyone?) In the more practical realm, I don’t think their player is that secure and probably its output can be intercepted by existing software utilities. But if it became more popular, the actual network steam could be intercepted and multicast. If they have you accept a convoluted legal agreement, it is possible that they might have a legal operation. But the real problem is that, because of the above technical issues, the studios will not like it and they will most probably threaten with legal action, and since Zediva is not big enough, they’ll probably just fold under pressure.

  11. Visitor [Join Now]
    Cape Town Properties [visitor]

    Local residents talk about Green Point and Sea Point as being ‘a village’. This is because so may of these Cape Town property owners know each other. Many have themselves grown up in the area. Camps Bay with its long white beach, swaying palms and mountain walks is considered as the ideal location for family-friendly Cape Town properties. Even dogs are allowed to walk on the beach if on a leash, accompanied by a poop-scooping owner.