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The Death of DiVx Print E-mail
Thursday, 01 June 2000
On June 16, 1999 Digital Video Express, LP announced that Divx would no longer be selling players or adding accounts to their service. Existing Divx owners would still be able to play Divx discs through June 30, 2001 and DVDs for the life of their players. Divx will provide $100.00 cash rebates to all consumers who purchased Divx-enhanced players prior to June 19, 1999. This rebate is offered to offset the higher price associated between the open DVD format and the Divx-enhanced players.
The announcement also went on to say that "...all Divx discs, including those previously purchased by consumers and those remaining in retailer inventories, can be viewed on registered players anytime between now and June 30, 2001. Subsequent viewings will also be available during that period." Unfortunately, "Divx Silver", which allows for unlimited viewing will not be available during the phase out period.

So what went wrong? In theory, Divx was an attractive concept. You could drop by a Circuit City (the Divx inventor) - pick up a $4.99 disc for a 48-hour viewing period and watch your movie that same evening or next month. No more scampering to the your favorite rental store five minutes before midnight to avoid those nasty late fees.
What Went Wrong?
Well, there were some hitches, glitches and even reports of misrepresentation of material fact (the folks at Ziffren, Brittenham, Branca & Fishcer - Hollywood law firm and co-developer of Divx - should get a kick out of that one). For instance, a Circuit City sales associate may have had you believe that any Divx disc can be purchased with the "silver" option for unlimited viewing. This was simply not so. Whether or not a Divx disc had "silver" capabilities was entirely up to the movie studio that had produced a particular title. Another misconception that consumers were reportedly lead to believe was that Divx releases would be available before VHS releases. Wrong. Divx had "day and date" agreements with a few studios, however, these release dates were to coincide with VHS releases - not before.

Personally, a few of the hitches and glitches that held me up from hopping on the Divx train were as follows: First, I didn't like the fact that a phone line had to be connected to the internal modem of a Divx player and stay plugged-in for ever and ever. Second, I heard of only two titles that had been produced in widescreen - everything else had been produced in the "pan and scan" TV format. I hate that. And while I'm mentioning titles, I think the DVD to Divx ratio was something like 10:1 - partially due to Circuit City deciding what was suitable to encode. I've never had a big brother and wasn't looking for one. Last, I never could get used to the idea that the disc that I had rented could only be viewed on my player. Here's a common scenario: a friend may call and ask what's up? Oh nothing, I'm about ready to pop in a movie. Great, my friend says, I just fired up the barbecue - why don't you bring your movie over? I can't. Why? Because I'm tangled up in the phone line leading to my Divx player that's got me by the … you know what I'm talking about. Worse yet, just imagine if you had one Divx player in the living room and another in the bedroom - you would have to rent the same disc twice if you simply wanted to view the movie on a different player in the same house.

Personal feelings aside, why didn't this technology catch-on? Should Divx be filing a wrongful death suite against DVD or movie studios such as Warner Bros. who refused to give advertising or marketing support to stores that rented Divx discs? Was Circuit City trying to monopolize the video market? Did Oswald act alone? For objectivity's sake, I wanted to get a second opinion directly from the field.

Tim Duffy, a high-end A/V custom installer based in the greater Los Angeles area stated his opinion with great clarity: "It was a stupid idea." Tim went on to say that Circuit City believed that this technology was so great that consumers, and retailers alike, would be falling over themselves trying to get their hands on it - this proved to be a fatal mistake. While the public was already busy in the adoption phase of DVD, another option was thrown into the mix and they just weren't interested. Perhaps if Divx and DVD had entered the video market at the same time, Divx may have had a better chance. However, Tim believes that the pay-per-view model can only work without additional hardware or software.

I'm not really out to bash or pass moral judgement on Circuit City and the crew at Ziffren, Brittenham, Branca & Fischer. They saw an angle that possibly could have made them a ton of green-backs and lobbied away millions trying to convince studio heads and consumers to throw-in and play. Not enough of us were willing to play by their rules.

In the end, Divx died because nobody wanted it. Circuit City had a small but very expensive funeral, a $114 million after-tax loss. See you at the video store.

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