Zediva to Appeal Hollywood Injunction to Ninth Circuit...

Zediva, the online movie streaming service that made waves earlier this year by "renting" recently-released movies to customers, has officially provided notice that it is going to the Ninth Circuit Court of Appeals with hopes of overturning a preliminary injunction that suspended its operations.

In August, Hollywood studios successfully obtained that injunction by arguing that Zediva's service constituted an illegal public exhibition of its copyrighted material.

Zediva countered that it was engaged in private exhibitions of movies merely intended to offer the public a more convenient way to view them. Zediva allowed its customers to rent both DVDs and DVD players from afar and remotely control each over the Internet, arguing the method of delivery was similar to putting a "longer cable" between a DVD player and individual viewers.
California federal judge John F. Walter rejected that view. In his order, the judge agreed with the studios that Zediva needs the permission of copyright holders to operate its service.
The company is now reaching for a higher authority to determine whether its service is consistent with US copyright law. On Wednesday, Zediva provided notice that it was appealing.
Meanwhile, the MPAA is still looking to spread news about its success.

On Thursday, attorneys for the movie studio asked Judge Walter to consider publishing his injunction order in the Federal Register so that other judges around the nation currently overseeing Internet copyright cases would have the benefit of seeing what they believe to be an astute analysis of the "transmit" clause in the Copyright Act and what it means for Internet streaming transmissions to be "to the public" under the clause. The plaintiffs also say they would be more than happy to submit the judge's opinion on his behalf to the Westlaw database.
Meanwhile, Zediva has really suspended shop, telling customers on its website that the company is "having to lay off our DVD-changing monkeys."

Those monkeys were unavailable for comment. At least one is thinking about filing a wrongful termination action. A few are planning a rebellion against their evil human overlords. The others are busy on typewriters reproducing that long-rumored Shakespeare sonnet.

Thank you Hollywood Reporter

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Apple discontinues 99-cent TV rental program...

Apple Inc. has pulled the plug on its 99-cent rentals of television show episodes after making a push last year to persuade TV networks to sign on to the low-price plan.

Consumers, the company ultimately discovered, were just as willing to pay $1 or $2 more to purchase an episode -- even when presented with the discounted rental option.

"iTunes customers have shown they overwhelmingly prefer buying TV shows," Apple said in a statement Friday. The company said the introduction of the iCloud service allows customers to store content they've purchased online, then watch it whenever they want on any Apple device.

The 99-cent download program faced too many hurdles, said Mike Vorhaus, president of Magid Advisors. It required people to have an Apple TV device to view the episodes on their living room TVs, or be forced to watch the programs on a much smaller screen.

"It's very simple. People want to watch shows on their TVs -- not on their computers," Vorhaus said. "Besides that, the competition is intense and much of the competition is free."

From the beginning, the 99-cent rental struggled for traction. Major television studios, including Warner Bros., NBCUniversal and CBS, refused to offer popular shows through Apple at such a discount. They didn't want to set such a low price point and undermine the still-nascent market for digital purchases.

Apple's former Chief Executive Steve Jobs lobbied aggressively a year ago to get the television industry onboard, but only Walt Disney Co.'s ABC and News Corp.'s Fox signed up. Jobs stepped down as CEO this week, to serve in a more limited capacity as the company's chairman.

ABC had an incentive to participate because Jobs is Disney's largest shareholder. News Corp. Chief Executive Rupert Murdoch agreed to experiment with the 99-cent downloads because he was interested in launching his company's digital news magazine, The Daily, which runs on Apple's iPad.

"After carefully considering the results of the rental trial, it became clear that content ownership is a more attractive long-term value proposition both for iTunes customers and for our business," a Fox spokesman said in a statement.

News Corp. Chief Operating Officer Chase Carey was more blunt earlier this month during an earnings call with analysts.

"We want to make sure we are vigilant about attacking practices that undervalue our product, like $1 rentals," Carey said. "Our priority [is] just to make sure we're thoughtful and do not allow a quick buck to jeopardize the longer-term value of our product."

Thank you Los Angeles Times


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HAPPY 4th Of July! Online movie downloads up nearly 40% in 2010...

U.S. consumers spent $385 million buying and renting movies via the Internet in 2010 --up 38% from the year before -- surpassing for the first time the amount paid for online television shows.

According to research from IHS Screen Digest, the market for Internet television episode rentals and purchases last year was $366 million. In 2009, spending on online movies and TV was $280 million and $295 million, respectively.

The shift reflects the growing number of ways consumers can access movies through devices such as video game consoles, set-top boxes and the iPad at the same time that Hulu and other free streaming websites make it less appealing to pay to download TV shows.

The growth of the digital market came amid an overall downturn for the home entertainment market last year, with revenue down 3% to $18.8 billion and sales and rentals of traditional DVDs down 11% to $14 billion.

2010 also saw increasing competition in the digital movie market, as the grip of Apple Inc.'s iTunes slipped and other rivals, most notably Microsoft Corp., gained market share.

iTunes' market share dropped to 64.5% from 74.4%, according to IHS Screen Digest, while Microsoft, which sells and rents movies via its Xbox 360 video game console, grew to 17.9% from 11.6%.

Movie downloads on Sony Corp.'s Playstation 3 game console were No. 3 at 7.2%, up from 5.7% in 2009.

Vudu, which was acquired by Wal-Mart Stores Inc. last February, relaunched in November and entered at No. 4 in the market, according to IHS Screen Digest digital media research director Arash Amel.

The other major competitor in download-to-own and video-on-demand movies is Amazon.com. The online retail giant is currently preparing to launch a subscription streaming service that would put it into competition with Netflix Inc. That model has proved more popular with consumers than paying for individual movies, as evidenced by the breakout success of Netflix.

Although there are no industrywide charts for digital downloads, Apple reported in December that the most popular movies of the year on iTunes were, in order, "The Hurt Locker," "The Twilight Saga: New Moon," "Hot Tub Time Machine," "Iron Man 2" and "Zombieland," according to CNET News.

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