Posted by & filed under branding, business models, Ecommerce, Netflix, revenue model, streaming video.

Description: Streaming Video Without the Wait –Zediva’s secret is so outrageous, you may think it’s an early April Fool’s prank. But it’s no joke.

Source: Nytimes.com

Date: March 21, 2011


Above all, fellow cinephiles, we can’t have both $1 movies (like those you rent at Redbox kiosks) and instant access to the newest releases. You can pay $4 to Apple or Vudu the day the DVD comes out, or you can get it for $1 from a Redbox machine a couple of months later. And let’s not even mention Netflix’s streaming-movie collection, most of which seems to date back to the Carter administration.

But what if I told you that there’s a new streaming-movie service,Zediva.com, that eliminates every single one of those drawbacks? It lets you listen to the director’s commentary, turn on subtitles and change languages. It lets you enjoy your movie for two weeks instead of 24 hours, starting and stopping at will. It offers the 100 biggest movies for streaming on the very same day the DVD comes out. It sidesteps any meddling by the movie companies, HBO contracts and studio lawyers. Read rest of story

Questions for discussion:

  • IS this business model built for large growth and is it scalable?
  • Will this business succeed?  Why or Why not?

30 Responses to “A Clever End Run Around the Movie-Streaming Gremlins”

  1. Brett Quinton

    Zediva is an excellent idea, a great business model to show how ridiculous the laws in the USA are. It is sad that the M.P.A.A and other organizations have forced the business world to come up with an idea such as this.
    The days of coinstar (redbox) are numbered. Today broadband internet is the norm, and people would rather stay in their homes and have a movie instantly delivered to their tv.
    Netflix is doing a great job of streaming movies and tv shows to televisions instantly, the issue is that the MPAA doesn’t want anyone to profit from “their” movies. Netflix has faced numerous legal hurdles and will face many more.
    Although what Zediva is doing appears to be perfectly legal now, the MPAA and others will try to shut them down as they are extremely resistant to change. I think it was the same organization and their overpriced lawyers that said that the DVD was going to ruin their industry. We can see that didn’t happen and the more resistance they put up against internet streaming the more money they will lose until they figure out that it is the future and there is nothing they can do to stop it.

  2. Oloff Dreyer

    I think Zediva can become quite a successful business model if managed in the right way. Obviously they have some bugs that they need to figure out and some legal issues that may arise but the fact is, this is the way of the future. People are always going to want to be able to watch movies in the comfort of their home and finding a way such as this to accomplish this seems to be viable. The fact is, Zediva will be making a profit from this and people will be more willing to pay the one or two dollars than the eight dollars shaw and other providers offer for a movie rental. Therefore I think this business will succeed and the fact that they are constantly adapting and changing is only a positive aspect of this company.

  3. Kuda

    I think Zediva is on to something. Their business model sounds so good to be true. In fact I watched a video which a presenter said, “hopefully they have good lawyers”; a case in point which highlights possible problems in the future. Firstly, this model is scalable, because the way the movies are played will require more equipment and then makes it super difficult if you then start attracting a world audience. Also their ridiculously low price might be a ploy to draw market share, and if ineffectively management they could find themselves out of business (provided costs exceed income). I think this business can succeed; because they offer advantages that big gurus such as Itunes, Netflix don’t have. However on top of the disadvantages i highlighted earlier, there might run into problems with movie producers because of the speed with which they get movies and low prices charged. Yet still there have a justification of its rightness.

  4. Kevin Beauchamp

    I would say that Zediva certainly has the potential to experience long term growth. The demand for watching movies that are cheap and newly released will always be high. Considering that movie studios and government agencies have severely cracked down on illegal downloading, a potential method that offers a legal way to download movies is a big plus. The business method Zediva uses certainly has a lot of growth potential has it is similar to other movies providers such as Netflix and it more efficient and inexpensive. Once the basic problems are fixed such as flash playing and menu extras, it will be extremely efficient. I believe that Zediva will succeed based on that it’s entering a market with a lot of buyers and is providing the service better than it’s competitiors. The main issue may be the crackdown by movie studios and government agencies. As long as they’re as it doesn’t benefit themselves, they will find a way to make it illegal.

  5. Katelynne Swenson

    I think that Zediva can become successful if they run their business properly. They have an extremely good idea, but if they do want to be a large company they will definitely need to expand. If the idea catches on, their customer base will be huge, but they could run into the problem that rental stores have already. Being out of the movie you want to see. Even though they have an extremely cheap model, there is always a cheaper alternative out there if you are willing. I do however feel that Netflix has a better business model, and if they were running it better in Canada I would personally choose Netflix over Zediva. You are still only “renting” the video and there is still a time frame (even though it is longer than most) in which to watch it by. Netflix doesn’t have this time limit, and you can watch endless amounts of movies, and tv series for only $8. For someone that watches a lot of movies, Netflix would still be cheaper than Zediva. Both companies are in competition with each other, and it all comes down to who can successfully implement their business model.

  6. Samantha.Kent

    If companies want to stop illegal downloading than they have to make the products easier accessible to the consumer and at a better price than what they are already selling for. With the economic downturn people are not able to recover as fast as companies, but they still want some luxuries. If they can’t afford to go to a movie they will find a way that is cheaper and accessible. If all they have to do is wait a couple hours for a brand new movie and pay nothing then go to a movie theatre they are going to do that. If the consumer wants to use a downloading system that costs them nothing and they don’t have to leave home why not, if companies cant keep up with the technology by being able to provide their product to the consumer in a fast and more affordable way then they are missing out on a great investment on their part.

  7. Mark McKee

    A company like Zediva was bound to come out to compete with companies like Netflix and others. An interesting business model which I am sure will adapt and evolve over time. I quickly checked the website and it looks like they are overloaded with demand and you have to sign up and wait on waiting list. There prices seem reasonable and the opportunity to rent the biggest hits right away is very appealing. However, I recently signed up with Netflix and for $8 a month and I can watch movies whenever, not for 24 hours or for two weeks but literally anytime, any month, ever. So as long as Netflix has new releases right away I don’t think Zediva will stand a chance. I mean $8, that is peanuts for the opportunity to watch endless movies each month. As you can see I still think Netflix has a better business model.

  8. Warren

    Zediva has a real unique and innovative idea. As long as their “automated jukebox” devices perform at a high level it seems they have a great business opportunity. The fact that new movies can be viewed on release day for $2 sounds appealing. No monthly fees or additional hardware required. I see a fairly major flaw in that Zediva uses flash video. The company says they are working on an application to remedy this problem. The big thing is being able to transmit to all mediums to gain as many customers as possible. I am guessing Zediva might be able to appease the M. P. A. A. by playing the optional previews before the movie. The more options and extras would only add value to the legitimacy of the business. With several competitors out there and the looming flag of piracy the odds are certainly stacked against a small fish in a large ocean.

  9. mike

    I think there is definite potential for this business to succeed. It has some real competitive advantages with some of the options that it offers such as being able to access the director commentary, subtitles and offering movies that Netflix and Redbox don’t currently have. This company seems like they still have some bugs to work out. I don’t know scalable this business model is. With having actual physical DVD players on the other end playing the actual DVD it is hard to know how effectively the company will be able to service millions of clients if problems arise with DVD players or a bunch people want to watch the same movie and end up pausing it for long periods of time and start it up again. It will be interesting to see if the company is able to deal with large growth. It will also be crucial to its success. To see if it can keep up with demand and maintain its infrastructure in order to satisfy its customers

  10. Abilal

    I think there is different tools implemented to compete in compititive market, marketing the DVD with value added such as subtitle make company to create global niche irrespective of language barriers, geographical boundaries. Although Zevida make the DVD available at lower cost competing Netflix and Redbox, still he is not approachable to larger audience as copared to netflix and redbox.

  11. Kendra

    I think that the possibility for Zediva to succeed is astronomical! It’s offering everything that people want, at an almost non-existent price.
    Not everyone likes to pirate, not everyone has the ability to drive to the movie store whenever a new movie comes out, not everyone wants to buy a physical copy of DVD’s, not everyone can afford renting constantly or buying copies, and not everyone WANTS to buy copies. What Zediva is doing is making movies available easily, at a price that no customer can complain about. Basically, Zediva has managed to be enticing to almost every market (except the technologically inept).
    I can foresee two ways in which Zediva won’t succeed; all others seem to be in their favour. The first way is if the M.P.A.A. finds a way to legally shut them down. I find this highly unlikely though, given the argument that they are going through legal channels to get the movies, and they are charging a fee for people to view them-exactly like Netflix. The second way: if their profit is not enough to keep up with increasing demand, people may get fed up with the service and opt to go through competing methods for movies because of convenience.
    I don’t see either of these happening.

  12. Ashley H

    Zediva has an interesting business model attempting a new spin on an old idea, the potential for this company to excel seems pretty good but with all the competition in the movie industry it is hard to say for certain. People are given so many options for ways to rent a movie; traditional movie store, Netflix, iTunes, download through numerous websites, now this Zediva. Although I think the idea behind Zediva is interesting with great potential something bigger, faster, better will outdo this business model and take over. Their competitive advantage; ability to watch director commentary, option to opt out of previews, watch in a different language/subtitles, can copied by the next up and coming company then they are in the same boat as all the other innovative-ways-to-rent-a-movie business. I agree with Kendra that they could not succeed because of M.P.A.A shutting them down, or their costs exceeding their profits, but what about protection from a company mimicking their model? Starting up companies are so determined to provide people now and improved ways to watch a movie, I think we have exhausted this industry and it’s time to do something different.

  13. J.E.

    This business does seem to have the right idea. I myself have been frustrated with Netflix and therefore cancelled my subscription because there are just far too few movies I would want to actually watch, and not to mention the terrible quality. I would be very interested to try Zediva but am a huge fan of quality, so for me DVD streamed over the internet does not seem like it’ll be quite the same experience as putting a Blu-ray into a home theater system but none the less I would definitely give it a try. I do not know how Zediva plans to keep up with demand if they want to potential serve millions of customers, and would be very interested in seeing how many DVD players they currently own to keep up with the current demand but it also does not sound like they are too worried about it so it must be a viable option for them.

  14. Kim B

    Does this Zediva company sounds like it’s run by a group of politicians to anybody else? Oh we promise this, that, and, oh yeah, that other thing too, but it will have to happen sometime down the road, in the near future, but yes of course, we will get to it and fix the problem! Maybe it’s just me. That being said, this company does have potential, they just have to capitalize on it. They have to get the major issues worked out as soon as possible, or else the massive interest that this company is generating at the moment will die out in a big way. They keep promising to fix the big ticket issues and get their company so it is both viable and profitable, but as of yet it has not happened. until is does, this company is not going to work well, although it does indeed have a good and unique idea for movie watchers.

  15. JJ

    First off the idea of streaming live movies and tv shows has been on the rise. I had not heard of Zediva but soon realized that this article was posted on March 16/2011, telling me that this was a new service. I personally have been streaming movies and the most current tv shows through my computer and playstation 3 for quite some time now. There are numerous sites such as surthechannel, projectfreetv and channel 131 to list a few, that offer the same service as Zediva minus the subtitles, directors cut etc. Using such services is identical exactly to Zediva’s, you search or click the movie you want to watch, then choose a host either megavideo, nomamov, divxden etc then the site loads the movie or tv show and all you have to do it his play. Let me not forget that all of these websites are completely free. Zediva might have a good idea but you can only watch movies that are out on dvd, where as surfthechannel will upload a tv show the same day as soon as the live episode on tv is finished. For people that are paying for tv and movies should check these sites out. Furthermore, if you have a playstation 3 you can use the internet browser displayed through your tv and can use it exactly like your computer. You can also run a cable from your laptop to tv and watch them that way.

  16. AS

    I have never heard of Zediva but it seem very similar to Netflixs to me. As we see the huge growth of internet streaming of movies this business model has a very good chance to succeed. I think it has the necessary competitive advantage over other streaming sites offering a similar set up to how movies are view on DVD’s including commentaries and subtitle options. As well as offering the top 100 new releases before their competitors. I have a feeling that they will be shut down sooner or later unless they find some sound loop holes in the system to keep them alive. I think that this website is build for growth. As mentioned by the article they were trying to figure out new ways of streaming the videos, for instance on the IPAD. I am unsure that they can handle big amounts of customers though. It seems to be a small business that would need more employee and technical support in order for it to run smoothly.

  17. Abiola Ogunyemi

    The business model which zediva has adopted is a viable one but it success depends on it operation and the quality of movies it streams to its clients. The value being offered such as commentaries and subtitle options including the directors comments is one that has not yet been offered by any online streaming movies websites. However, there are a lot of pitfalls and legal obligation that Zediva needs to address in other to stay away from the wrath of copyright law. Recently with the introduction of Netflix to the Canadian customer, and for just $8 a month one can watch movies as much as you want, in my own opinion $8 per month to provide unlimited access to movies is cheaper than $1 or $2 per movies.

  18. Abiola Ogunyemi

    The problem is that online theft is much more difficult to police as oppose to ordinary crime. The fact that millions of dollars is lost a day by American retailers to crime such as shoplifting has amount to be a daily estimate of about $20 billion. If it was as risk-free to steal from stores as it currently is to illegally download movies or songs on the Internet.Adopting common-sense precautions against online theft. The punishment for online property thieves should be measured with their crime. But the big question remains unresolved. In an online world where stealing has become so easy that over 9 million people have already illegally downloaded a movies they like at some given point in time, how do we get these millions of unincorporated law-abiding people to stop breaking the law?

  19. Mikey

    Haha!! This is AWESOME!! I love it when people find a way to work with the system. It’s like a virtual oldschool-movie-rental store.

    Well, is it scalable…it depends, if they have enough capital to invest in more hardware or new technology (DVD computer servers) they may have a good chance to expand. As it can be noted, their current membership sign up status is closed and newcomers will need to wait a while to be able to access this system–there’s just so many dvd players one can fit into a warehouse. Overall, in regards to the scalability, I think that unless they find a way to maximize their space and budget, they will find themselves turning down a lot of people and those people will go somewhere else for their movies.

    Will they have legal problems? absolutely! They’re introducing a great change to the movie-renting industry and they’re taking away the control the MPAA has over the industry and that is something they won’t allow for too long.

    Smart fellows at Zediva.

  20. Jared Scott

    I think it is a fantastic idea. As a user of online rental programs like iTunes I like the idea of being able to access new movies as soon as they are available. The only problem I see is that if this site gains international popularity then it will be very frustrating to use. Also I am a HD enthusiast and would prefer that they use Blu-Ray but that option may be unrealistic. Kudos to you Zediva.

  21. Travis Sedrovic

    I think a company like Zediva could succeed, if they build a dedicated group of followers (say, 10 million users), who watch say 3 movies per month. 10,000,00 * 3 = $30,000,000. I don’t know what the costs are to run Zediva for a month, but I can’t see them being anywhere near that number. You may think 10 million users is outrageous and impossible, but if you look at how many people currently use itunes, or torrent sites across the world I think this has a slight chance.
    What I don’t get is why doesn’t the film industry get involved? They have to be starting to realize that people do not want to pay top dollar to watch a movie, so jump on board and partner with one of these companies!

  22. Chris

    Zediva does have an inventive way to attract movie consumers. It is good they have a focus of the hottest and newest movie out there. It might not attract everyone though even if it is a dollar for ten movies and two dollars for one movie. The one student in our class said that something free will always beat any price even if it is a dollar. Like us students we are very poor. Zediva is nice that it doesn’t have software or hardware to watch movies and you can change it to any language you would like. It is also crazy to wonder how many people can watch the movie at the same time or when they will run into this problem. We have known for a while that blockbuster’s is going to go under because of getting movies sent to you or on the computer. Well we will see how hot this website gets.

  23. N.P

    I personally hate watching movies on my computer. I enjoy renting movies and watching them on my actual TV screen. I think this company as some really good things going for it and some not so good. I think its great that movies can be accessed the same day of release as well as for longer periods of time. It is also nice that you are able to select subtitles and preferred language. On the other hand, I understand that it requires Wi-Fi, it only makes sense, however, the problem for me would definitely be the length of time it takes to connect. That is the exact reason I hate watching flicks on-line. Another concern is deleted scenes. If I was interested in watching extra clips on a dvd, it would most likely be the deleted scenes. I see that they are working out a lot of those problems which is cool, but will it be effective? The cost of these videos is pretty reasonable and I think that if Netflix is doing well with older movies than this organization may have something that will be huge on the market. The amount of people that download films off of the internet will continue to do so. They obviously don’t care about the language or subtitles. If Wi-Fi access is used to attain these films, can we guarantee that hackers will not be able to load these films onto their computers during the streamline? I think they have something good going on here, its just a matter of how many people it strikes interest in.

  24. Nyle Watts

    I think that there is defintely potential in the ideas that Zediva has implemented, and I also believe that this company can go on to be very successful. In many ways it is very comparable and reminiscent of Netflix, but it doesn’t seem to have the same sort of issues that Netflix has. For the time being, this business model that Zediva has implemented is legal, but it makes me wonder for how much longer this will be true. This seems like just another way that endangers the traditional store to becoming obsolete, even though Shaw and Netflix has pretty much made that true already. But in such an electronic-based lifestyle that we all live and rely on nowadays, and with the huge number of people that has already been downloading movies from different sources, the task of getting all these people to stop what they may be illegally doing and to start obeying the law is one that not be feasible.

  25. Asif Hirji

    Zediva! What can I say I love the Idea. I tired the Netflix trial for a month and boy was I disappointed! I guess I can’t really blame Netflix more so the CRTC but what can you do. I love the fact that movies come out the same day such as shaw on demand but only cost a dollar (if you buy the 10 pack) One of the major drawbacks that I see with this strategy is that Netflix has a flat rate fee for unlimited movies. Also with the actual physical DVD being played in DVD how will the Zediva be able to serve its customer base if it expands rapidly? Either way a great idea by Zediva and i’d like to see how to fairs.

  26. Teigen

    Zediva has the potential to become a successful movie rental business. However, judging on the article, there are still many issues to fix. The fact that Zediva is focused on the top 100 NEW movies, is definitely a competitive advantage. Netflix is great for its price and the ability to watch as many movies as you want each month for 8 dollars. But, none of these movies are new releases and in all honesty, the movie selection is quite poor. Zediva, on the other hand, has what Netflix is lacking.. new movies. If they can continue to improve their operating systems, Zediva could become the top company. I would way rather pay to watch new releases, than movies that are extremely old! Zediva is going to have to work very hard to keep up with consumer demand (making sure movies are actually available to rent).. If they do, they will be able to make lots of users happy.

  27. Dylan B

    Lets be honest, this idea is genius on a crude level. This company has taken the technologies of other companies and simplified them. Its streaming for dummies and in theory its brilliant. The problem is the pitfalls. In this day and age i wont be able to live with “this video is rented out” over the internet. Thats crazy. At the same time, if i rent a movie and the DVD starts skipping or freezes i’ll be on unhappy fellow. If this company wants to succeed, the key is to get past the legal hurdles that they are undoubtedly facing, and then streamline the physical dvd system so that there are NEVER any problems. The first time my movie skips, i’ll be leaving, and people will hear about it.

  28. Corey Bedard

    I really doubt that this business idea will work any better than any other online or in store movie rental idea. As the article states, there is currently no option as to watching the bloopers or deleted scenes. These are the only parts I ever (sometimes…not very often) pay the slightest attention to other than the actual movie itself. The commentary and the subtitles reaches out to such a small audience that there is no way it will be sustainable over any competitor. Good on them for ‘doing there best’ to work at an app to allow them to work on Apple products, but until then, theres about a 50% audience that wont be satisfied not being able to use this product. Like most people who have any internet knowledge I already have about 5 or 6 websites that I can use to watch nearly any movie I want for free and that will surely fill my movie needs for a long time.

  29. naismithj

    I think this is a very interesting way at going about a current technological issue. However like many comments before mine I am hesitent to jump on the band wagon. Those who “can” always “will” find away to get around the rules. Regardless how cheap a product can be sold, free is still the ultimate desire for those who posess the knowledge to find away around the price. Unfortunately in a “now” crazy society waiting a minute is too long and ethics has taken a hit especially in the movie and music industries. Personally I believe that movies will have a harder time selling and i tunes type cost as a person is more likely to listen to a song multiple time then view an entire movie repetitively to the point that they deem their investment worth while. Only after I am seen and thoroughly enjoyed a film does the idea to purchase it and watch it again in the future cross my mind. Perhaps for others it’s a different story?

  30. Rob C

    With advancements in technology today we are able to create new easier and more convenient ways of viewing entertainment. With the main vehicle of the internet we are slowly converting our lives to the virtual platform where everything is also just a mouse click away.

    With this new creation called Zediva, if its description bares truth then the movie industry is definitely in for another devastating blow but as a consumer it definitely makes purchasing and viewing movies much more easier and convenient. Being able to watch a movie and stop in order to continue within a two week period, allows users to factor in their busy life schedule and personal entertainment with convenience. Overall I think this is a good move but it will definitely change the game for other movie-streaming providers.

Leave a Reply

Your email address will not be published.