Zediva launched today, a service that allows you to rent and watch newly released DVD movies online at the low price of $2 each.

This is about half-the price of other services and it includes movies that might not be available online for months.

How does Zediva get access to new movies while other, larger entities, such as Netflix can’t?

It acts like your neighborhood video store, which gets new DVD movies all the time, except with Zediva, you also rent the DVD player, which then streams the movie live to your screen.

The movie studios might object to this exploit of a loophole but in the meantime, it’s good to have access to new movies without having to brave bad weather to rent them.

Maybe this model might help struggling local mom and pop video stores? Zediva’s store of movies is limited by its capacity of DVD players and copies of popular movies – about 110 titles. Local stores could fill in gaps in supply – although at a higher price.

[Cross-posted at Silicon Valley Watcher]