Chapter 1

74 Everything You Ever Wanted to Know About DVD
$100 more than a regular player, had to be hooked up to a phone line so it
could call an 800 number for about 20 seconds during the night once each
month (or after playing 10 or so discs) to upload billing information.
Most Divx discs could be converted to DivxSilver status by paying an
additional fee (usually $20) to allow unlimited plays on a single account (as
of December 1998, 85 percent of Divx discs were convertible). Unlimitedplayback
DivxGold discs were announced but never produced.
Divx players can also play regular DVD discs, but Divx discs do not play
in standard DVD players. Divx discs are serialized with a barcode in the
standard burst cutting area. In addition to normal DVD copy protection
(refer to “What Are the Copy Protection Issues?” in Chapter 1), they employ
watermarking the video, modified channel modulation, and triple Data
Encryption Standard (DES) encryption (two 56-bit keys) of serial communications.
Divx technology never worked on PCs, which undoubtedly contributed
to its demise. Because of the DES encryption, Divx technology may
not have been allowed outside the United States.
Divx was originally announced for summer 1998 release. Limited trials
began on June 8, 1998, in San Francisco and in Richmond, Virginia. The
only available player was from Zenith (which at the time was in Chapter 11
bankruptcy), and the promised 150 movies had dwindled to 14. The limited
nationwide rollout (with one Zenith player model and 150 movies in 190
stores) began on September 25, 1998. By the end of 1998, about 87,000
Divx players (from four models available) and 535,000 Divx discs were sold
(from about 300 titles available). The company apparently counted the 5
discs bundled with each player, which means 100,000 additional discs were
sold. By March 1999, 420 Divx titles were available (compared to over 3,500
open DVD titles). All things considered, Divx players were selling well and
titles were being produced with impressive speed.
On June 16, 1999, less than a year after initial product trials, Circuit City
withdrew its support and Divx announced it was closing down. Divx did not
confuse or delay development of the DVD market nearly as much as many
people predicted (including yours truly). In fact, it probably helped by stimulating
Internet rental companies to provide better services and prices, by
encouraging manufacturers to offer more free discs with player purchases,
and by motivating studios to develop rental programs.
When it closed down, the company offered $100 rebate coupons to all
owners of Divx players. This made the players a good deal, because they
could play open DVDs just as well as other low-end players that cost more.
On July 7, 2001, Divx players dialed into the central billing computer, which
decommissioned them. (Divx players not connected to phone lines have
expired their playback allowance.) Consequently, Divx discs are no longer
playable in any players. For more information see the Divx Owner’s Association
(www.the-doa.com).