When a customer requested a particular work, the defendants, through their Zediva
service, started the play process on a particular DVD player holding the requested work,
converted the analog video signal from the DVD player into a digital signal using a video
adapter, fed the digital signal into a DVD control server that converted the digital signal to a
form suitable for streaming across the Internet, converted the digital signal to a format that could
be viewed in the player created by the defendants and used on their web site, transmitted the
performance via the Internet to the customer, and provided the customer with a custom viewer
necessary to view the video stream. To begin the process, the customer clicked on a virtual
button on the defendants’ web site. Customers were unable to access all the other features
available on a particular DVD, such as deleted and extra scenes, or other special DVD features.
The defendants maintained exclusive control of their servers, and the customers had no control
whatsoever over the various servers that the defendants used to direct traffic among their stacks
of DVD players.^409
The defendants described the Zediva service as allowing customers to “rent” a particular
DVD and DVD player for 14 days. However, customers did not have access to or control over a
specific DVD or DVD player. Instead, the defendants streamed the content of the DVD to a
customer for a maximum period of four hours, provided that the customer did not pause it for
more than one hour during that time. After four hours of total “rental” time or an hour-long
pause, whichever occurred first, the defendants used the DVD player containing the same DVD
to transmit the work to a different customer. When the first customer made a request to resume
viewing, the transmission might be sent from a different DVD or a different DVD player than the
one originally used to transmit in the earlier “rental” period. According to the defendants’ web
site, if all of the copies of a particular work were “rented out” when a customer wanted to view
the work, the customer could request to be notified, via email, when it became available.^410
The plaintiffs claimed that the Zediva service infringed their rights of public performance
and sought a preliminary injunction, which the court determined the plaintiffs were entitled to.
Turning to whether the streams constituted public performances, the court noted that the
definition of “public performance” in Section 106(4) is comprised of two clauses: (1) the
“public place” clause, which states that a performance is public if it occurs at a place open to the
public or at any place where a substantial number of persons outside of a normal circle of a
family and its social acquaintances is gathered; and (2) the “transmit” clause, which states that a
performance is public if someone transmits or otherwise communicates the performance to a
place specified by the public place clause, or to “the public,” whether the members of the public
capable of receiving the performance receive it in the same place or in separate places and at the
same time or at different times.^411
The defendants argued that their service offered “DVD rentals” rather than transmissions
of performances. The court rejected this argument, analogizing to On Command Video Corp. v.
(^409) Id. at 1007 & n.2.
(^410) Id. at 1007.
(^411) Id. at 1008-09.