Back in August, the MPAA was granted a temporary injunction against web based video streaming service Zediva, and this week, U.S. District Judge John Walter completed the proceeding by granting the MPAA a permanent injunction.
Zediva provided a service where users can rent DVDs, but instead of sending them the disc, Zediva allowed the users to view the titles immediately online. For each user that rents a disc, that disc is taken out of circulation, and so, in Zediva's own words, it's like having "a DVD player with a really long cable attached" (that cable being the Internet).
The problem for Zediva is that they provided no explanation as to why their take on video streaming is better than the existing business model for video streaming, whereby companies like Netflix license content specifically for web streaming purposes (usually at a greater cost than simply purchasing a rentable disc), other than the fact that Zediva would be exempt, in their own minds, from having to pay the licensing fees.
Unfortunately, the court did not side with Zediva, and the company now also has to pay the MPAA backed studios penalties in the range of $1.8m, and cease operations immediately.