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Hollywood studios sue Indian-American’s Internet movie company

Boston(PTI): Six major Hollywood studios, including Warner Brothers and Sony Pictures, have sued Internet movie company Zediva and its Indian-American CEO Venkatesh Srinivasan for streaming movies online for as little as USD 1 without permission from them.

The lawsuit filed for copyright infringement in a Los Angeles court alleges that Zediva “illegally” streams movies to its customers in violation of the studios’ right to “publicly perform” their works, the Motion Picture Association of America (MPAA) announced on behalf of its members.

The studios’ complaint alleges a single count of copyright infringement against California-based Zediva’s parent company WTV Systems and IIT Mumbai alumnus Srinivasan.

“When legitimate companies stream movies to their customers, they pay license fees to the copyright owners, enabling content providers to invest in new products and services that pay writers, set builders, wardrobe designers…who contribute to a movie production.

“Companies like Zediva profit off creators without paying them what is required by the law,” MPAA Senior Vice President and Associate General Counsel Dan Robbins said in a statement.

Zediva claims it is like a “brick-and-mortar DVD rental” store and therefore not obligated to pay licensing fees to copyright holders, the MPAA added.

“But the DVD rental label is a sham. In reality, Zediva is a video-on-demand service that transmits movies over the Internet using streaming technologies in violation of the studios’ copyrights,” Robbins added in the statement.

The studios have asked that the site be shut down and pay damages that could total millions of dollars. The MPAA serves as the advocate of the American motion picture, home video and television industries. Its members include Walt Disney Studios Motion Pictures, Paramount Pictures Corporation, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Universal City Studios and Warner Brothers Entertainment.

Zediva, which was launched last month, rents movies for as little as one dollar each by streaming the video over the Internet. The company buys DVD movies and lets the customer play them back remotely from a bank of DVD players located in the firm’s Santa Clara data center.

It charges 1.99 dollars per movie, or 10 dollars for 10, which is far less than the 4-5 dollars that studios normally charge for new releases through Internet video-on-demand.
Unlike DVD rental provider Netflix, Zediva does not send DVDs to customers through mail.

Zediva’s “mischaracterisation of itself is a gimmick it hopes will enable it to evade the law and stream movies in violation of the studios’ exclusive rights,” Robbins added. According to Srinivasan’s profile on the Zediva website, he has a PhD in chemical engineering and “used to be an actual Rocket Scientist at NASA.” He graduated from University of Massachusetts at Amherst and IIT Mumbai.

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