Movie studios sue streaming video site

The nation's leading movie studios have sued the streaming video service Zediva, claiming the site illegally streams new movies without the required licenses, according to a statement from the Motion Picture Association of America.

Zediva describes itself as an online rental service where consumers can watch the latest movies and TV shows available on DVD. The firm claims when users rent a movie for $1.99 they are actually renting the DVD and a player at Zediva's facility, with the film digitally streamed to the renter alone.

But the MPAA termed the rental arrangement a "sham," arguing that Zediva is actually a video-on-demand service that provides movies over the Web in violations of studios' copyrights.

“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,” said Dan Robbins, associate general counsel for the MPAA.

The Obama administration has cracked down on sites that illegally stream copyrighted content, seizing several domains that link to pirated movies, TV shows and broadcasts of sports contests. The White House also recently recommended Congress clarify that streaming illegal content is a felony.

"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, and countless others who contribute to a movie production," Robbins added.

"Companies like Zediva profit off creators without paying them what is required by the law."

The complaint, filed in federal district court in Los Angeles, argues Zediva has violated the plaintiffs' right to exclusively perform their work. According to Zediva's website, the firm is led by founder and CEO Venky Srinivasan, whose bio states "he used to be an actual Rocket Scientist at NASA."