Zediva, an innovative and unlicensed DVD streaming company that ran afoul of Hollywood, has shut the online doors to its private theater to comply with a federal court order.

Zediva sent an e-mail to members late Wednesday with the same message that now adorns its homepage:

You may have heard by now that we’re having to lay off our DVD-changing monkeys… :-)

A couple of years ago we came up with an idea for the next generation of DVD rentals. It seemed to us logical and evolutionary that if a customer was able to rent and play a DVD in his home, there should be no reason why he or she could not do that from the Internet cloud. After all, you can do that with a DVR, so why not with a DVD player?

Well, it turns out to have been a little more complicated than that …

We are suspending Zediva’s operations to comply with an order by the United States District Court for the Central District of California.

While we hope to be back online soon, we don’t know when (or whether) that will happen. We are disappointed by this turn of events, and that we are not permitted to serve you.

We are quite aware that some of you have unused credits with us and appreciate your patience as we figure out our next steps. Stay tuned for more information via email.

Thank you again for your great support. It has been a blast serving you.

Regards,
The Zediva Team

The judge overseeing a copyright infringement case filed against Zediva by the top Hollywood studios issued a preliminary injunction ordering the shutdown, saying that allowing the service to continue while litigation continued would damage the studios attempts to build a video-on-demand market.

Zediva’s offering was quite simple: new release movies that you can’t get on Amazon, Netflix or iTunes that cost $2 for a digital rental that lasts for two full weeks. It didn’t struck any deals with studios and didn’t plan on doing so.

Zediva thought it could circumvent the need to be licensed by literally renting customers a DVD and a DVD player, with your computer, tablet or Google TV as the remote control. Unlike the other streaming movie services, Zediva didn’t turn a movie into a file on its servers that it can serve to as many users as care to see it at once.

Instead, Zediva’s servers had DVD drives and actual DVDs. So when you rented a movie, that disc goes out of circulation until you release it back to the company, just like in one of those increasingly rare real-world video stores.

U.S. District Court Judge John Walter in Los Angeles wasn’t impressed with that reading of copyright law, writing “As the copyright holders, Plaintiffs have the exclusive right to decide when, where, to whom, and for how much they will authorize transmission of their Copyrighted Works to the public.” Walter said copyright law defined public as any person, not a collection of people.

Zediva’s legal options include appealing the ruling to the Ninth Circuit Court of Appeals. The possibility of winning a reversal brightened somewhat last week when the Ninth Circuit tightened the circuit’s rules on when preliminary injunctions are handed down in copyright cases.

Zediva did not immediately respond to an e-mail seeking comment on the shutdown and its legal strategy.

Photo: A bank of DVD players in Zediva’s server farm. Credit: Court filing by Zediva.