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17 March 2011

The Heath Robinson approach to offering a Netflix service

If you’ve ever sat there and wondered? Why can’t someone just put together a bank of DVD players, and stream a video to my browser? Then Zediva is a company which thinks just like you. Of course both you and the company need your head examined, and for those who don’t know the cartoons of Heath Robinson, look them up on Google, and imagine them as Zediva’s early working diagrams.

It’s a fair question, why won’t this work? Well first off you have to provide a method for controlling the remote DVD player and that has to be in buttons that are intuitive and which sit on the browser. To be intuitive they have to be like video streaming windows on the internet. So what is happening when you grab the bar at the bottom of the video and click to halfway through a two hour video? Yes it’s going to take a time, probably cycle through a few menus you don’t want to see and leave you wondering if it’s working, and trying to do it a second time.

The company says that it is targeting Netflix? But its logic is fairly poor. If you are renting DVDs you are supposed to buy DVDs which are designated as for rental (which cost three times as much) and come out either 28 days or possibly later, than the DVD release window for purchase. So its claim that it can get videos before Netflix is a temporary thing, the studios just haven’t got around to dealing with it and setting terms and conditions. They will.

The other issues are technical. The video is streamed using Adobe Flash, so the video has to be converted into this, on the fly, presumably with some transcoding and we can’t quite see how this is done with the company staying within the bounds of the Digital Millenium Copyright Act. It probably doesn’t, but so far doesn’t know that it doesn’t. There is one past copyright decision in its favor from the supreme court, which Cablevision pushed through, about network DVRs, so if there is a delay just imposed by an automated software process, and if the controls are in the hands of the viewers, with no human intervention and if no meta file is created to store and play the video, it might (just about) be within the DMCA.

So the reason this has not come up before is because adaptive streaming was not widespread before, and file downloading (which was not legally allowed from a DVD, even if it was easy to dupe) and progressive downloading, required that a piece of the file was buffered, and therefore existed outside of the DVD player, and constituted a copy, breaching the DMCA. What it says it is doing is renting you a DVD player and a DVD for the time it takes to play your film.

The Zediva system does offer cheap DVD rentals which you can play immediately, ranging from between $1 and $1.99 depending on which sign up offer you take. The film is available and you can pause, rewind ‘ in fact whatever you can do with a DVD player. You can stop it and play it against later, but if you leave it for an hour it is effectively taken offline, and you have to queue for a spare DVD player to reload it. If there are devices free, it will happen automatically and you are allowed to watch it as often as you like up to 14 days.

This only applies to SD video so far, with Blu-ray to come and apart from the obvious clumsiness of the format, the technology choice does mean that connected TVs with a browser should be able to show these films, as long as they support Flash. The company says that it will offer the top 100 DVDs only at any point in time, but of course will have to buy multiple copies of each DVD so that people can watch them concurrently. If a DVD is $15, and the triple priced rental DVDs are $45, each DVD has to be played 45 times before it is making money. But that could happen on a 90 minute DVD in its first 3 days, and the rest of the money could be used to pay overheads, staff, for new DVD equipment and office space and of course profit.

Because this is the actual DVD, Zediva can give access to the language support and you can watch in Suomi (Finnish – if you so wish) or any other language.

It’s a neat idea and there will be many copycats emerging both in the US and in other countries if studios don’t find a DMCA breach in here that sticks, and it may make its founders some money, but it won’t challenge the power of Netflix, as it’s not as neat a service, and doesn’t have that momentum that Netflix has built and of course doesn’t have the appearance of being free.

After a while Zediva will have enough experience of user habits to agree a flat subscription rate, and that might eventually rival the $7.99 a month price of Netflix, but we suspect not. And even if it does, the pull that Netflix has on CDN delivery prices will continue to give it wriggle room on pricing.

We also suspect that if this video IS transcoded and resized for a particular remote screen, that there will be issues with video quality when played on a larger TV screen, which won’t be there for the Netflix service, but we will watch with interest as this concept evolves.