Calif. Startup To Offer Streaming Movies For $1.99

SUNNYVALE (AP) — Startup Zediva Inc. is trying to disrupt the increasingly competitive movie-streaming market by offering viewers a chance -- for $1.99 a pop -- to watch flicks through an Internet connection as soon as they are out on DVD.

The Sunnyvale, Calif.-based company is circumventing the usual 28-day delay that Time Warner Inc.'s Warner Bros. and other studios negotiated with movie rental companies including Netflix Inc. and Redbox. These companies have to hold off on renting newly released movies to give studios more time to sell DVDs.

Zediva says it lets customers remotely rent a DVD and a DVD player located in the company's Silicon Valley data center. If the service takes off, it could become a competitor to Netflix and others that offer movie rentals online or through DVD kiosks such as Coinstar Inc. But movie studios will likely pressure Zediva to operate by the same rules it has for the others.

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