A new startup is looking to usurp Netflix by offering streams of new DVDs as soon as they hit store shelves.

The Sunnyvale, Calif.-based Zediva has found a new, novel, and possibly illegal, way to beat other online movie streaming sites to the punch. Instead of waiting to strike deals with various movie studios for the rights to stream their films, the startup simply buys the DVDs, plays them on individual DVD players at its Silicon Valley headquarters, and lets users access individual streams of the movie for up to four hours. In essence, letting the user digitally "rent" that DVD. 

According to founder Venky Srinivasan the service is no different that brick-and-mortar rental stores. "We are renting DVDs just like any DVD rental service," he told USA Today

While companies are legally able to rent DVDs it's purchased without studio permission, things get sticky with online streaming as studios require separate payments, and generally don't allow new movies to be streamed. 

Copyright lawyer Bob Garret, while speaking to NPR, took some subtle shots at the company calling it "cute but illegal", saying that different permissions are needed to stream flicks over the Net. 

Zediva, currently in a closed beta stage (there's no word on when it will open to the public), rents movies for $1.99, and gives users control over the DVD, allowing them to fast-forward, rewind, and pause. However, users can only pause the movie for up to an hour and if they decide they don't want to watch the movie in that sitting, they have up to two weeks to finish it. 

We're of the mind that if something on the Internet sounds to good to be true, the Feds are already working to shut it down. We'll see how this one plays out. 

[via USA Today