In several earlier posts, I indicated that it was my view that the startup streaming company Zediva has very little chance of prevailing against the major Hollywood studios. Zediva has now filed its answer to the studios’ complaint, and seeks a ruling that its business method is perfectly legal. In legal parlance, Zediva is asking a court to award it a “declaratory judgment” that states that its services comply with copyright laws. In the May 16 filing Zediva argues:
This is no more a public performance than playing a DVD in one’s living room. It defies common sense to say, as the Studios do, that putting a longer cable between a DVD player and its single viewer transforms a private performance into a public performance.
I am skeptical that this argument will be persuasive with judges, given the case law on what constitutes a public performance. The Copyright Act says to “publicly perform” a copyrighted work is to perform it in a public place or:
to transmit or otherwise communicate a performance or display of the work…to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.
Is Zediva transmitting a performance or display of the work? Clearly yes. Is it “by means of any device or process”? Clearly yes. Is it to multiple members of the public? Yes. Zediva does not limit who can become a customer of the site. And if you read the definition above, the performances are to many members of the public because they watch the same disc at different times. This is true for movie stores too, but they do not transmit the disc to the public. To be clear, I think there is a good argument for changing the language about “separate places” and “at different times,” but that is the way it is written.
Critically, customers never actually acquire physical control of either the videos or the DVD player. Zediva transmits movies from its own facility using technology that it has developed. While Zediva argues that the customer is able to direct the playing of the video on the DVD player, and has therefore “rented” a DVD player, it is ultimately Zediva that is transmitting the videos to customers.
This is exactly how the court in a prior case, with similar facts, viewed the situation. The case is On Command Video Corp. v. Columbia Pictures Industries, 777 F. Supp. 787 (N.D. Cal. 1991). The situation was analogous in that a hotel established a system by which its patrons were able to watch movies that were stored in the hotel’s equipment room. The hotel argued that its process was an electronic video rental, just as Zediva is doing. The Court disagreed, based on the definition I cited above:
Plaintiff’s argument that On Command’s system involves not “transmissions” but “electronic rentals” similar to patrons’ physical borrowing of videotapes is without merit. On Command transmits movie performances directly under the language of the definition. The system“communicates” the motion picture “images and sounds”by a “device or process” — the equipment and wiring network — from a central console in a hotel to individualguest rooms, where the images and sounds are received “beyond the place from which they are sent.”
I expect a judge in this case to say something along the same lines.
Jon
June 8, 2011 at 6:32 pm
“Critically, customers never actually acquire physical control of either the videos or the DVD player.”
Huh? When was the last time you physically controlled your DVD player? I ALWAYS use my remote control – and one is remotely controlling a DVD player at Zediva’s data center.
Also, Netflix, Hulu, Amazon, et. al., don’t require one to physically handle media when streaming content to their homes.
This is just more of the never-ending greed we see from Hollywood.
Daniel Diskin
June 8, 2011 at 9:22 pm
Netflix and Amazon have obtained licenses from the studios though. I think the issue of where the DVD player resides is important to the question of whether Zediva is transmitting a “public performance” of the movies. This is the central issue in the case. If customers were streaming the videos entirely in their own homes from a DVD player to their computer, then obviously it would be a private performance.
Zediva is transmitting the movies to the customer via their streaming technology. Zediva says this is a private performance, and most people would presumably agree. But the Copyright Act defines public performance in a counterintuitive way, as I described in a previous post so that it can occur at different places and at different times from, in this case, a single DVD. The fact that the DVDs are all streamed from a central location makes this look more like a public performance.
Jon
June 9, 2011 at 12:09 am
Your argument for a public performance is analogous to my streaming a cable TV movie from my Tivo to a laptop at my cottage, simply because I’m using a longer cord to get from point A to point B. Zediva is renting *one disc* to you, and *only you* – just like a video store has the legal right to do so. This is not the same as Netflix model of having a server farm streaming movies from hard drives to most of North America. When I walk into a Best Buy and they are playing Avatar simultaneously on 100 HDTVs, *that* is a public performance.
Daniel Diskin
June 9, 2011 at 6:19 am
Hi Jon,
Thanks for your comments. I’ve updated my post so that it has the definition of public performance, which I believe favors the studios, and an earlier case that is like this one. I disagree that this is like Zediva renting one disc to one person. The way that courts have read the “transmit” clause, Zediva is transmitting one disc to many people. And it doesn’t matter that it’s at different times (see the definition).
E Bstrom
June 25, 2011 at 10:39 pm
You have purposely misled your readers by altering the terms used in the Copyright act. The term used is clearly performance singular not plural. The law clearly states that displaying a single performance of a copyrighted material is against the law (ie. Airing one copy being played to many persons, customers and or locations). What Zediva is doing is allowing a customer to view a movie on their own individual player and individual copy of the film of their choice. This does not constitute an act of displaying a single performance to many members of the public. It is a single viewing of a single film on a 1 film to one viewer ratio. Even if tthe customer were to rebroadcast the film to a wider audience publicly or via the internet it would be the customer breaking the law not Zediva. If not for this rationale video rental stores would be legally responsible and liable for a customer taking these actions with a copy of a film while rented out. You need to accept the fact that this is legal and a very natural progression in the death of an old business model for a new one facilitated by modern technology and its greater efficiency/cost effectiveness/convenience. At the end of the day its a movie rental store with dvd’s to rent which will help the movie industry sell more copies of dvd’s which are a dying and outdated technology which would have seen sales slashed with movie store closures if not for Zediva’s great original business model. Quit misleading the public with your self-interested banter. Cheers and welcome to the future, i hope you enjoy your stay.
Daniel Diskin
June 26, 2011 at 12:09 pm
Hi,
I appreciate that many people feel strongly that Zediva is a worthwhile business model. However, I have not attempted to mislead anyone. I quoted directly above from the Copyright Act, which explains that a public performance can take place at different places and at different times. Also, I have in this post and others described legal precedents that are not in Zediva’s favor, such as the case I cited above. The “first sale doctrine” protects movie stores from liability, but does not apply to a transmission, ie streaming content as Zediva does. I actually believe there is a strong argument that there are public benefits to Zediva’s business model. But the point is that objectively, based on the Copyright Act and judicial interpretations of what it means to transmit a public performance, Zediva is likely to lose this case.
Kieran Mullen
July 14, 2011 at 2:00 pm
Singbox anyone? These are not multicast streams. All this talk yet basically it is the same as renting and watching a phyiscal disk except the cord between the tv and the dvd player is a bit longer.
Diamond
July 28, 2011 at 12:32 am
I use Zediva. I prefer it to Netflix and Hulu. While I do not wholly disagree with the argument presented in the MPAA’s favor, I do feel that the Copyright Act was simply not prepared for what is possible today. In today’s tech-filled world, the ability to remotely access and control devices with a great degree of expected privacy enables Zediva’s huge step for mankind. I would venture to say that Zediva is offering me the opportunity to shop in their store and use their robot if i so choose.
i don’t know if anyone pays attention, but you can also get your DVD mailed to you. Obviously this costs more for shipping, but other than that, it is no different than Blockbuster or any other brick and mortar store. So the idea is, are they allowed to let me use their robot and save me the trouble of driving to pick and return the DVD? Is it their fault that when the movie is over I simply tell the robot to return the DVD and I am done? Is the use of a robot enough to demonstrate “physical posession”? Without a doubt.
If the robot is not working. Let’s try the window. Members are entitled to private viewing rooms. Each room is equipped with a dvr. The members access their dvr in whatever manner they please. Obviously most choose not to drive to California. Zediva only makes sure that the DVR is operational and the selection is up to date. As a member, I decide my preferred viewing method. Zediva is prepared to facilitate my wishes. When I rent a movie, I alone dictate it’s path. I tell their rental guy to load my dvd into my DVR so that I can use my PC to remotely control my viewing experience. The MPAA gets their money when Zediva bought the DVD. Just because they have the fastest, most convenient rental and return system is not the business of the Copyright Act.
If every Blockbuster had 3 employees who just loaded discs into remotely operated DVRs and saved me the trouble of driving back and forth, it NEVER WOULD HAVE GONE OUT OF BUSINESS. Even with the archaic and over reaching language of the Copyright Act, the technically astute will understand this for what it is, a 21st century video rental store.