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Comment by johrn | Hacker News Reader

So what if some company did something similar to Zediva, but with a model where customers "buy" the DVDs and then sell them back to the company when they are done streaming it? Basically use first sale to set up a streaming service where you don't need to deal with licensing issues.

I pay $20/month for access to the servers and infrastructure. I get $10 of that to use as purchasing credit. Movies cost anywhere from $1-$5 depending on popularity, and the company buys them back for some small amount.

The company would probably need to have some system in place for dealing with people that actually want the DVD that they 'bought'. Maybe something as simple as letting people know that they own the DVD, but the company is not responsible for shipping it to them. If the customer wants to come pick it up at the office, he can feel free to swing by and have someone pull it from the data center for him.

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I doubt this particular solution would end up being looked kindly on. This is one of those places where the edge cases get weird. Netflix, for instance, is well entrenched as legal. And Zediva was basically Netflix with the latency removed. But because of the streaming nature, the one-copy-to-many-eventual-viewers thing was able to be labeled a "public performance." When really the difference in a "spirit-of-the-law" way is that the lack of latency would require the service to need far fewer DVDs than Netflix, which would result in less payments to the content creators for the same amount of people watching their stuff. Which gets back to the mess that copyright law has evolved into -- in terms of compensation for content, is there any reason that a Netflix service should be worth more to a content creator than a Zediva service? It creates a really perverse incentive in terms of creating more useful services.

So going back to why I think this would most likely be struck down: I think the most likely way it would be shut down would be by calling the "purchase" system (while a clever hack) not legally meaningful. Especially since the only person this hack enriches is the service provider: now if someone wants to watch more movies, they have to "buy" and then "sell back" more "discs", losing some small amount of money on each of those transactions.

I don't really understand the restriction that was used against Zediva. Is the key point that the same company that's renting out the DVDs is also renting out the means to perform them?

Hypothetically, a company could set up a datacenter where you rent DVD players by the hour, provide your own disc, and stream the output to your computer over the internet. It seems that this would be allowed based on the Cablevision ruling. Then, I could rent one of these players for three hours, look up someone who lives near it, and pay them to go to a Redbox, pick up a DVD for me, and pop it into the DVD player, so that I can stream it at home. It seems this would be legal and not even completely impractical.

Does it only become an issue when the player, the courier, and the Redbox are all provided by the same company?

That reminds me of my very first programming job, using a source control system (Rational ClearCase, I think) at a company that had licenses for a certain number of concurrent users. When you tried to check your code in, the client had to check out one of the license keys to use during the interaction with the SCM server. If they were all in use, the check-in would fail: "no license available, try again later."

I think that was a licensing scheme offered by Rational and not a clever hack we devised for screwing Rational out of license fees, but I wasn't sure and wasn't brave enough to ask.

Seems like a nice hack, assuming nobody made an argument that it constituted "public performance" or something similarly crazy.

Plus, you get automatic coverage of damaged disks: the company will buy back undamaged disks for what you paid minus the rental fee, or for full price in the case of an all-you-can-watch service.

Except anything with a low/bid ask spread becomes money and that comes with its own set of problems. What would happen if the DVD was sold back for more than it was bought for? It's the intersection of Banking + Copyright + Tax Law. The trifecta of screwball legal areas.

Except anything with a low/bid ask spread becomes money

- can you explain that? threshold % of asset value?

You could solve some of that by making the buyback non-transferrable (so people couldn't use this as a money transfer mechanism).

Beyond that, any pointers to information on regulations about things with a low bid/ask spread?

Courts aren't stupid. Judges in particular get really annoyed if you think they'll fall for it. "I'll just do X' instead of X and then everything is legal!"

> "I'll just do X' instead of X and then everything is legal!"

Except... this is exactly what has happened.

It did? When did a court rule that a slight change in Zevida's practice would make it legal?

Lots of people are trying/hoping to change the First Sale Doctrine into something that can destroy copyright. That simply isn't going to happen. If some court someone rules that I can own a virtual copy of "The Avengers" and trade it around with my "friends" on the Internet, Congress will recognize that as a bug and modify the law.

Isn't this exactly how ReDigi operates? Is it different if the first sale is to a consumer rather than a company?

My reading was that ReDigi facilitates the "sale" of a song form one user to another by switching a DRM bit. Couldn't Zevida have done the same thing? Transfer ownership of the file to the user before pressing play on the dvd player?

It's not "exactly" how ReDigi operates, since there is a distinction that matters about where the "performance" happens. (And that distinction matters because Cablevision, which is what allows you to offer the home-DVR as a cloud-DVR, also said that the cloud-DVR was okay because of the fact that there was a copy for each customer.) EDIT I'm not so sure about that distinction now, but there are other differences, like Zevida actually having physical media.

Nor has ReDigi been found to be legal, unless the article failed to mention the resolution of the legal action against it.

I was talking about the companies mentioned in the original article which have stood up to judicial scrutiny despite having ridiculous setups that exist solely to circumvent prosecution. Judges clearly don't mind that.

> Congress will recognize that as a bug and modify the law.

Why are you so sure of that?

I consider it fairly obvious what Congress would do if ever became legal that one person with one copy of a movie or song can legally and instantly share it with millions of his "friends" online. The same way I consider it fairly obvious what Congress would do if it somehow became legal to manufacture your own dollar bills.

Some people would say it's because of "Big Hollywood" or "the mafIAA" or whatever, but regardless of the spin, Congress would still act.

But Congress obviously isn't doing anything about filling a data center with thousands of antennas and temporarily assigning them to individual customers in order to circumvent public performance restrictions.

At least in this case, talking about what decisions will "obviously" be made beforehand seems unwise.

Well you neglected to mention the aspect of it being a large number of shares in your last post. Congress doesn't know who my friends are and I should be able to loan out a movie to a handful of people over time if I want to.

>Congress will recognize that as a bug and modify the law //

It's not a bug.

I think that would work. That would be like renting. Do renters have to pay a different license? Zediva would have to deal with people that buy and not sell back.

Someone should start an Airbnb/Zediva mashup and make software to automatically buy/stream/sell DVDs from other people.

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