Zediva is being sued by six Hollywood studios. According to the MPAA lawyers, Zediva’s operations violate the studios’ right to “publicly perform” their work. “Zediva’s mischaracterization of itself is a gimmick it hopes will enable it to evade the law and stream movies in violation of the studios’ exclusive rights,” stated MPAA associate general counsel Dan Robbins.
Zediva calls itself a DVD rental company, but they don’t ship DVDs to customers through the mail like Netflix does. The DVDs sit in their players at their data center in Silicon Valley. When someone orders the movie, it is played on demand.
Zediva did not have to pay license fees so they offered rentals at lower prices. Movies through Zediva can be watched for as little as a dollar or two.