There is no clean-cut loophole here. People have tried similar services before (e.g., VHS, in a smaller area, such as a single video store or hotel building) an

There is no clean-cut loophole here. People have tried similar services before (e.g., VHS, in a smaller area, such as a single video store or hotel building) and the Courts found a violation of the public performance right. See Redd Horne (749 F.2d 154, http://www.law.cornell.edu/copyright/cases/749_F2d_154.htm http://www.law.cornell.edu/copyright/cases/749_F2d_154.htm). More precisely, the question is this: are they transmitting a performance of the DVD to the public? This gets a little convoluted thanks to the circular definition of "public" in § 101. There is an argument that the transmission is only to private homes, if Zediva puts restrictions on how/where their service can be used. Sometimes people forget that reproduction isn't the only way to infringe. Depending on how their technology works, there may also be infringing reproduction in the buffer.