The low price point is possible because the company looks for a high enough number of rentals to bring in enough revenue to turn a profit, a...
Some film titles on the company's site appear as being "rented out" in a sign that the site's access to DVD copies of each title is limited. Srinivasan said Zediva has held talks with studios, but he didn't share any specifics on topics or possible terms having been discussed, citing the confidential nature of the talks. "Of course, we are happy to partner and work with them," Srinivasan said about studios, but also emphasized. "It is important for us that our customers have the best value aswell as the best selection of things that they would like to be able to see,"
The Journal predicted that Hollywood would likely mount a legal challenge to ensure that the company doesn’t undercut the balance of power in Hollywood.
Asked if the studios have a legal case against Zediva, Srinivasan once again highlighted that his team is positioning the company as a video rental firm. "Zediva buys real authorized DVDs. We are a DVD rental service. The notion of DVD rentals is well established," he said, adding that Blockbuster, Redbox and Netflix all buy some of their DVDs on the open market. "Just like any other DVD rental service, only one user can rent a DVD at a time. If there is more demand, we buy a lot more copies of the DVD. They are all authorized. We pay market price for these. We are not ripping them off or anything. We don't think the studios have anything to complain about. Just like Blockbuster or your local video store, we buy DVDs and we rent them to our customers."
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