DVD 'streaming' business model legal?

Could a company legally deliver actual physical rental DVD’s played on a company DVD player as a internet stream and thus avoiding streaming royalties and the need to acquire streaming rights?

Background:
Most knows the recent woes of Netflix streaming issues, basically the studios have limited the content available to Netflix and have demanded much more for what the do have available for streaming. Though Netflix is able to get physical DVDs with out much difficulty.

Would this business model be legal and avoid streaming royalties:
At the company you have banks of DVD players which are rented to the subscribers. When the subscriber wants to watch a DVD he selected his title (transmitted to the company over the internet) and from that company that DVD is loaded into the player and the video signal is sent over the internet to the user’s display device.

This just means that a subscriber is watching a rental DVD, just as if he rented it from Redbox, the DVD player just happens to be in a different location and a long connection between the DVD player and the display.

Would this work to avoid streaming legal issues, and just make it a video rental service?

I don’t know if you’re aware, but a company called Zediva tried that and was shut down by the courts. David Pogue’s article on the service is here.

Also, here is a Hollywood Reporter article on the legal issues. It says that the studios argued that Zediva “was offering an unauthorized public video-on-demand service.”