||The Life and Death of Divx
The Life and Death of DIVX|
DIVX was introduced and proposed by Circuit City and a Hollywood law firm during the fourth quarter of 1997.
DIVX was intended for the rental market of the movie industry. DIVX was a modified format of the
current DVD technology. DIVX players contained special decoding circuitry and a modem in which to communicate
with the DIVX headquarters (which acted much like your normal video rental store, such as Blockbuster).
DIVX discs could be bought for roughly $5 a piece which in turn
granted the purchaser a total of 2 days to view the disc from the moment the disc was played. Every
additional viewing period could be purchased for roughly $3-$4 or the disc could be bought outright for a remaining
cost of roughly $15 or more (all via credit card). (Note: These are Divx "Silver" discs. Not all discs offered this feature.)
Potentially, it was initially thought that upon its success, this proposal could put many of the traditional video rental companies out of business by transferring all rental
market revenues directly to Digital Video Express and participating studios.
All DIVX discs were NON-playable in all standard DVD players -- which made up the majority of DVD hardware during its market run.
The DIVX people claimed that their technology was meant to co-exist with the current OPEN
DVD market. DIVX intended to be an "additional feature". However, DIVX involved not only
$5 a pop non-returnable "rental" discs, but DIVX "GOLD" and "SILVER" discs. These DIVX discs
served the exact same purpose as OPEN DVD discs by being unlimited in the number of
times they can be viewed (selling for roughly the same price as a standard OPEN DVD disc),
but once again, thy were only viewable on DIVX-ready hardware. This hardly sounded
like an attempt to co-exist with a format that already offered this functionality. This was more like
an attempt at controlling a potentially very lucrative market.
When reading through DIVX propaganda, it was easy to see that a major marketing ploy of theirs
was the notion that, "Now you can easily 'rent' a movie without having to return
it or suffer late charges!" However, the idea of our country's landfills becoming
increasingly populated with discarded DIVX discs raised some questions. Later, the DIVX people
claimed that they put together a procedure for recycling discarded discs. While
there once was no need to return these discs... there soon was.
Circuit City, The Good Guys and Ultimate Electronics carried DIVX.
Matsushita, Zenith, Harmon Kardon, RCA/Proscan, and others had announced that they would be releasing DIVX DVD
players in '98-'99. Nothing of outstanding quality ever came to be.
Paramount, Disney, Fox, Universal, MGM, and Dreamworks announced they
would be releasing films on DIVX. In turn, these companies were to be given a collective sum of $100 million over
the next five years for their participation. Inevitably, Divx did not last for even two years of that time.
Circuit City was a major player in DIVX and had roughly $200 million invested (not including
an initial $30 million over the last three years and not including ANY of the millions invested as compensation to DIVX participating studios)
allowing them 65% ownership (the other 35% belonging to the LA based law firm). At the time,
Circuit City still sold standard DVD players - all of which were to become completely obsolete
should their investment succeeded by meeting their ultimate and primary goal.
DIVX sales were never discussed in detail. Only a reference to their total players sold was ever really mentioned.
The key factor in the success of this format would be the number of accounts avtivated. Apparently, this unknown
number of activated accounts was not enough to keep the ball rolling.
During the Divx run, R. Sharp showed dissatisfaction (perhaps a lack of confidence) with DIVX's involvement with Zenith. The RCA and Proscan players were to be a DIVX-hopeful step forward.|
R. Sharp had also admitted that DIVX's advertising budget would eventuallly be scaled back 40% from $100 million to $60 million, for its launch.|
Such a proposal at the time left the consumer in confusion. Confusion is simply not good for the success of ANY new technology.
Final OPEN DVD Hold Outs:|
For a long time there were a number of studios that announced they would release films to Divx with no mention
of what was to come for standard DVD. This further angered early adopters of the format as they were now faced with
the fact that their expensive machines may never get a chance to see the light of many studio films. Eventually,
all DVD hold out studios came around to announcing support for the format.
Other Past DIVX Information:|
DIVX could be interpreted as being designed to put video rental
companies out of business. It was expected for companies like
Hollywood Video and Blockbuster to retaliate by being quick to point
out the higher cost of DIVX discs compared to current rental costs of the time.
With these companies offering video rentals in the $1-3
range, it was likely they would be quick to jump on the ANTI-DIVX/PRO-DVD
bandwagon simply because they could show for lower rental costs on DVD
then could DIVX. Blockbuster later began a national rollout of DVD rentals.
Retailers were generally very unenthusiastic about
DIVX as indicated in an article in the L.A. Times. Studios admired
DIVX simply because it transfers rental revenue straight to their pockets.
There was little in it for the retailers (other than
Circuit City, which was of course an investor in the technology).
In an interview, the head of Tower Records claimed he could see
absolutely no reason why they would want to carry DIVX discs.
- It has been made clear that Columbia/TriStar, New Line, and Warner
were not expecting to ever support DIVX claiming they believed it to be
a consumer confusing and, essentially, a very bad idea.
Paramount, Fox, and Dreamworks were originally a worry regarding
possible exclusivness to DIVX. However, they would later announce their
plans to release on OPEN DVD.
The prevention of sales of standard DVD players in the fourth
quarter of 1997 can be suggested as the reason why the DIVX announcement
was made at that time. For those against the idea of Divx succeeding,
buying a standard DVD player was a step in the right direction for
voicing your opinion against DIVX.
May we have a moment of silence for the playing of Taps.
<*Taps*> After announcing support for Circuit City's Divx, Zenith would file for Chapter 11. Looks like even
Cicruit City's $120 million couldn't help carry them along.
At the ABC NEWS
website, of the nearly 4,000 votes tallied on the question, "Would you
pay $449.99 for a DIVX player?", roughly 98.2% aanswered with
a NO and 1.8% with a YES.
With the obvious points aside, many Divx supporters were confused by why so many people decided
to take such a powerful anti-Divx stance and not incorporate more of an
"open mind" with their beliefs regarding this new technology. Clearly, many
of these Divx supporters were not present during the initial Divx unveiling
back in mid-to-late 1997. Circuit City/Divx would CHANGE their attitude
after some time -- but many of us did NOT forget. Those of you who weren't supporting the DVD technology
back at this time (which without us - Divx would never have existed at all), were not
subject to the arrogant attitude expressed via Circuit City/Divx/Richard Sharp.
Those early adopters were basically told to in so many words to stuff-it where
the sun don't shine. Divx also introduced the idea of a "Gold" Divx disc which was a disc
you could purchase directly from the retailer which allowed unlimited viewing. Clearly, if Divx
was designed to co-exist with DVD, this was certainly no attempt to take a step down that path.
If Divx was designed for the rental market, why was it necessary for a "competitive" disc such as this? In the final few months,
Circuit City/Divx put the "Gold" disc on the back burner. The details surrounding this disc fueled much of what had become a large Anti-Divx campaign.
In conclusion, Divx was a technology to be embraced for the right reasons
and benefits. If you are a person who primarily rents their movies and greatly
dislikes the trips back to the video store and any potential late fee's, then Divx was for you. But, the buyer was to be wary
of the limitations. You may have thought you "owned" what was called a "Silver" (Divx disc converted to unlimited viewings) disc
from Divx, but when you were unable to play this disc on ANY other player or account -- that was a fairly limited definition
When Divx folded, R. Sharp stated the technology did not have enough financial backing and market acceptance.
They pulled down their Divx signs and dropped a $100 off all of their Divx machines in stock. They offered a $100
rebate to anyone who had purchased a Divx player to cover the additional cost of the Divx hardware in a unit that
otherwise played DVDs just fine. All pre-purchased Divx discs of any kind would be usable until June 30th, 2001. Divx
discs will otherwise never play again.
Final Poll Results
Knowing the information you now know, do you like the DIVX technology?|
|Don't Care Votes||21|
This poll is closed.