Digital Video Express
following is an article on Divx's latest financial woes, that
appeared in the 9/2 issue of The
Search for Divx backer keeps Circuit City
(Wed., Sept. 2, 1998)
By Scott Hettrick
Circuit City faces a $45 million drain on second-half earnings if
it cannot arrange outside financing to defray the cost of Divx, a
fledgling, pay-per-play DVD format.
During a conference call with analysts this week, Circuit City
chairman and CEO Rick Sharp said the company will re-evaluate
prospects for the platform and determine its viability after the
Sharp said Circuit City continues to hold discussions with
potential investors in Digital Video Express, the year-old
partnership between Circuit City Stores Inc. and L.A. entertainment
law firm Ziffren, Brittenham, Branca & Fischer that produces
Divx. The partnership had hoped to announce financing partners this
With $8 billion in overall annual revenue, Circuit City has spent
more than $100 million on Divx. Sharp expects to spend $60 million
on marketing, salaries and continued development of the platform.
Talks to bring in a financing partner do not look promising at this
stage, Sharp said, noting that he expects to face a 45-cent
per-share reduction on earnings for the third and fourth quarters of
1998 as a result of Divx-related expenses, as opposed to a 12-cent
per-share reduction with financial partners lined up. Circuit City
has about 1 million shares outstanding.
Sharp said Circuit City continues to be encouraged about prospects
for Divx and its "extraordinary, attractive returns for
shareholders" and hopes to roll out systems nationally "toward
the end of September."
About 200 titles have been authored in the format, with about 150
expected to be ready at launch. Manufacturing delays have stalled
Divx's introduction since June.
Circuit City initially projected first-year sales of
200,000-250,000 Divx units. Zenith is the only hardware manufacturer
lined up so far, with initial devices expected to be priced at $499.
Sharp said most technical hurdles have been overcome and that
replication and production should move much more quickly now.
Divx utilizes the same fundamental technology as DVD but forces
viewers to pay a fee each time they play the movie encoded on a
disc. A signal delivered through telephone lines bills a credit card
and unlocks the movie. Each disc will cost about $4.50 and allow one
play during a 48-hour period.
Here's a story from Daily Variety
on yet another delay for Divx:
Divx Delayed Again
Daily Variety - 5/27/98
By PAUL KARON.
The launch of Divx, the alternate digital videodisc rental format
backed by the Circuit City electronic retail chain, has been delayed
approximately a week, until June 8, due to quality-control problems
with several of the movie titles, according to sources within the
format's maker, Digital Video Express.
"We're not going to have the level of software that we had
hoped, and for that reason we made the decision to wait an extra
week," said the Divx spokesman. "We did not anticipate
that our quality-control requirements would ... delay the launch,
but they have."
Problems involved the playback of the discs and other unspecified
quality-control issues, said Divx sources.
Manufacture of the Divx-enabled DVD players - which would also play
ordinary DVDs - has not been delayed, according to Divx.
The rescheduled June 8 release will still be restricted to the test
markets of Richmond, Va., and San Francisco, as originally planned.
Divx hopes to field approximately 25 movie titles in its digital
disc format by the start date, with the number increasing to at
least 50 by the end of June and with steady growth thereafter.
The Divx players, and the discs, will be available in Circuit City
and Good Guys stores.
National release of the Divx players and titles is planned for late
summer or early fall, said a Divx spokesman. Under the Divx scheme,
consumers would purchase a film title for $4.49. Once they start
playing the disc, they'd have 48 hours to play the title. After the
initial two-day period, consumers would have to pay an additional
fee to play the disc again. The standard DVD format has no playback
restrictions, but the discs are more expensive.
The Divx format is also backed by the Century City law firm of
Ziffren, Brittenham, Branca & Fischer. Six Hollywood studios -
Disney, Fox, Dreamworks, Paramount, Universal and MGM - have
announced their intention to release Divx titles.
Here's a great propaganda piece on Divx that Circuit City published
in a recent issue of their employee newsletter, the Circuit
City Ink. Kinda reminds me of the Capra Why
We Fight films from WWII, which were used to boost morale
among the troops, and to sell the war to the folks at home. Divx
ought to be sold by a guy like Ron Popiel on late night TV, right
along side his bald-spot removing spray paint (just a thought).
Anyway, here it is:
Divx is Coming Soon... To a Display Area
Divx - The Best Way to Watch Movies At Home
It may be happening as you read this-construction Associates making
room for Divx displays on your sales floor; training Associates
providing demos of the Divx system; and Circuit City customers
asking, "are the Divx Player here yet?" To be sure, the
Divx players are coming. And Divx discs too. It starts in San
Francisco and Richmond in May and around Labor Day, the Divx wave
will start cresting around the country.
Try to imagine the kind of home video system you would design for
yourself if you could. It would offer:
* The quality of DVD digital picture and sound
* The freedom of no returns and no late fees
* The availability of hot feature titles, all the time
* The flexibility of starting the viewing period when you want
* The convenience of an affordable home video collection.
And it would do it all for about the price of a videotape rental.
That's Divx! Quality and convenience. Freedom and flexibility.
Affordability and title availability. The frustrations with the old
video rental system are now a thing of the past-something to tell
your grandkids about some day.
How does Divx Work?
Buying Your Player:
Divx begins with the purchase of a Divx-enhanced DVD player.
Zenith-Inteq models will be available this summer, and the national
roll will begin with RCA and Panasonic player later in the year. The
players will carry a suggested retail price of $499. Divx is not
starting a format battle. Divx is a feature. All Divx-enhanced DVD
players start as fully-functioning DVD players and are capable of
playing all basic DVD discs.
Setting Up Your Player:
The player plugs easily into the back of your television and
connects to a convenient phone jack. After your player is plugged
in, you make a toll-free call to the Divx Customer Satisfaction
Center to register it. Part of registration includes providing a
major credit card or debit card number. Any future charges you incur
will be charged to that card. The call takes about five minutes, and
then you are ready to start watching your favorite home movies!
Buying Divx Discs:
Divx movie discs look like music CDs and come in durable, jewel
case-sized packages. For a suggested retail price of about $4.50,
not much more than the cost of a VHS tape rental, you can buy one of
your favorite movies on a Divx disc-including the most recent
releases-from Disney, Paramount, Universal, Twentieth Century Fox,
MGM and DreamWorks. Divx discs are yours to keep, so they never have
to be returned. That means no late fees and no late-night return
trips to the video store. And because Divx will make enough discs
available to satisfy demand, you will no longer find the store out
of the hot movie title you most wanted to see. By national roll out,
approximately 150 Divx titles will be available. That number will
grow to 400 by the end of the year.
Playing Discs- The First Time:
The purchase price of a Divx disc includes a two-day viewing
period. But unlike traditional videotape rentals, the viewing period
begins not when you leave the store, but only when you insert the
Divx disc into your player for the first time and press play. Your
rental period may start on the day you bought your discs. It may
start the next week, or even months later. With Divx, you have all
of the features and flexibility you have always enjoyed with
videotape-rewind, fast-forward, pause. Unlike pay-per-view, you can
start the movie, fall asleep and start it again the next day, and
you can watch it as many times as you like within that 48-hour
window. And because Divx is a feature of DVD, you will also enjoy
the highest-quality digital picture and sound as well as other DVD
benefits, like no rewinding and jumping to different parts of the
program (as you can with CDs).
Playing Discs- The Second Time:
If you wish, Divx discs can be played again and again. Additional
two- day viewing period can be purchased by following the on-screen
prompts. The charge for a subsequent viewing period is about $3.25.
This price will be charged to your card and will show up on your
statement during the next billing cycle. You can review your account
through your Divx player. If you don't think you'll want to watch a
particular disc again, you might consider giving it to a friend or
trading it for another title. The viewing charge for anyone else
will also be $3.25, almost one-third less than the retail cost.
Converting Discs to Unlimited Play:
You and your family (particularly your kids) undoubtedly will enjoy
some movies so much that you'll want to watch them many times. It
would make sense to convert these discs to the unlimited play
format. Converting these discs to DivxSilver, as they are called
costs about $10 to $15, depending on the movie and how long it has
been available on video. To convert a disc to DivxSilver, you simply
follow the on-screen instructions. DivxSilver discs can be viewed as
unlimited number of times without charge to any Divx player
registered to your account. So, if you have Divx players in your
family room, bedroom, and at your vacation home, you can play your
DivxSilver discs on those players for free. For some titles, you may
also purchase DivxGold discs (for about $20), which allow for
unlimited free play on any Divx player.
The phone line That's connected to your Divx player is used to
transmit transaction information to the Divx billing center. The
player calls the center, toll-free, once or twice a month during
off-peak hours (usually after midnight) to send a record of charges
that you may have incurred, such as the purchase of additional
viewing periods or the conversion of a disc to DivxSilver. Should
you need to use the phone during one of these transaction calls, the
player immediately hangs up and calls again later. The player never
interferes with outgoing or incoming calls. While the player's phone
line never has to be plugged in to play a disc, the preference is
for players to be connected to the phone line at all times to
facilitate the necessary exchange of information. The entire call
takes about 30 seconds.
Mail and Specials:
In addition to sending billing information every month, Divx
players also receive information from the Divx billing center. Using
the player's built-in menu, you can navigate to your own mailbox
where you'll find the latest Divx news and information about Divx
specials, such as discounts on DivxSilver conversions or extended
viewing periods. You will also be kept up to date on title
availability and any new Divx retailer in your area. And if you
prefer to do your shopping on-line, you can also order Divx discs
through the Divx website at www.divx.com.
Building A Video Library:
Divx is the most convenient system ever invented for watching
feature movies at home. In addition to unprecedented convenience,
Divx enable you to simply and economically build an at-home movie
library that has all the quality and resonance of DVD. Divx players
can play not only your favorite feature films on affordable Divx
discs, but all basic DVD titles as well.
Let the Revolution Begin...
What the microwave oven did for the kitchen-no less than a
revolution in time savings-Divx promises to do for the family room.
It will liberate us from the shackles of round-trip rentals and free
us forever from late fees. It will enhance our home theater
experience, delivering the awesome power of digital picture and
sound. And it will give us the flexibility to watch what we want,
when we want. This is an exciting time for Circuit city and our
Associates, as we are poised to change forever the way people watch
movies at home.
I've got another interesting piece of Divx information for you. The
following is an exert from Circuit City's financial report for FY98.
It reveals a bit of fact about just how much Circuit City has
committed to Divx, and how much they have pledged to pay the studios
for their Divx support:
Under Section 13:
Commitments and Contingent Liabilities
(A) Investment in Divx: In May 1995, the Company agreed to invest
$30.0 million in Divx, a partnership that has developed and will
market a new home digital video system. That commitment was
increased to $130 million in September 1997. The Company holds
approximately 66 percent of the partnership and allocates investment
in Divx to the Circuit City Group. As of February 28, 1998, the
Company has funded approximately $86.8 million of its commitment, of
which $51.9 million has been expensed ($31.8 million was expensed in
fiscal year 1998, $11.4 million in fiscal 1997, and $8.7 million in
fiscal 1996 and prior).
(B) Licensing Agreements: Divx has entered in to licensing
agreements with motion picture distributors for use of their full
length films for the Divx system. The Company guarantees Divx's
performance under these commitments. The licensing fees are based on
varying percentages of consumer viewing and wholesale receipts and
require minimum distributor compensation commencing from the
operational date of each agreement through the following three to
five years. This compensation is contingent upon shipment of the
first Divx disc, currently expected to occur in May 1998. At that
time the minimum compensation from Divx to the studios is $112.0
million ($11.00 million in fiscal 1999, $26 million in fiscal 2000,
$32.0 million in fiscal 2001, $20.5 million in fiscal 2002, $14.5
million in fiscal 2003, and $8.0 million is fiscal 2004).
Here's the text of the announcement that the Divx test run will be
delayed, from the Dow Jones news site. Unfortunately, the media
doesn't seem to have picked the story up. In any case, here it is:
Debut Of Circuit City's DIVX Pdt Put Off
'A Few Weeks'
DOW JONES NEWS 05-06-98 02:22 PM
Co Says Dates Have Been 'Flexible'
Dow Jones News Service via Dow Jones
By Mark Yost
RICHMOND, Va. (Dow Jones)--Circuit City Stores Inc. (CC) Wednesday
said the test launch of its DIVX video disk system will be delayed "a
Circuit City spokeswoman Anne Collier told Dow Jones that the test
launch in San Francisco and Richmond probably will take place in
late May. She also said the test launch delay will not affect the
national rollout of the product, which is scheduled for "late
"These dates have always been flexible,"Collier said. "They
always are, especially when you're dealing with the development of a
new product. But yes, they are a few weeks later than we'd planned."
Analysts who follow Circuit City and sources close to the company
both told Dow Jones that the delay was the result of licensing
problems with Hollywood studios, though they declined to provide
"Circuit City wants to step off with their best foot forward
and they figure that if they wait a few weeks, and have a fuller
library of titles, the initial launch will go better," said a
source close to the company.
There are expected to be 500 titles available on DIVX by year end,
up from 68 as of early February. Six Hollywood studios have agreed
to license their films for release on DIVX.
Movies from Disney Co. (DIS), Seagram Co.'s (VO) Universal Studios
unit and Viacom Inc.'s (VIA) Paramount Studios unit are available in
both DIVX and DVD.
Dreamworks SKG and News Corp.'s (NWS) Twentieth Century Fox Studio
have authorized just the DIVX format.
Metro-Goldwyn-Mayer Inc. (MGM) agreed in March to use the format.
Circuit City announced in March that San Francisco would be one of
two test markets for DIVX. About a month later it named Richmond as
the second test site.
DIVX CDs can store one or more feature films. DIVX machines can
play both DIVX and DVD disks.
(END) DOW JONES NEWS 05-06-98 03:13 PM Copyright (c) 1998 Dow Jones
and Company, Inc. Received by NewsEDGE/Web: 05/06/98 15:18:22
It seems that another DVD player manufacturer has announced support
of Divx. Here's the full press release issued today:
HARMAN KARDON TO MANUFACTURE AND SELL DVD
PLAYERS THAT INCORPORATE DIVX
High-End and Basic DVD Players To Be Part of
Signature Series Line
WOODBURY, NY, April 7, 1998 -- The Harman Consumer Group,
manufacturer and distributor of the Harman Kardon line of premium
audio and video consumer electronics, announced plans to produce and
sell DVD players that include the new Divx feature.
"Harman Kardon believes that Divx offers customers real value.
We intend to offer the Divx feature, along with a variety of other
high-value benefits and features, in our forthcoming DVD players,"
commented Gina Harman, executive vice president of the Harman
Consumer Group. "In keeping with Harman Kardon tradition, our
mission and overriding concern is to deliver the finest audio
possible. Harman Kardon has, for almost 50 years now, been renowned
for its superior audio capabilities, and we fully intend to bring
these capabilities to bear in the DVD medium as well."
Scheduled to be introduced in two markets this spring and rolled
out nationally in late summer, the Divx system enables consumers to
purchase a special, encrypted movie disc for a suggested retail
price of about $4.50. The price includes a two-day viewing period
that begins when the disc is inserted into the Divx player, either
on the day of purchase, the following week, or months later. Divx
discs never have to be returned, eliminating late fees and providing
home theater enthusiasts with an economical way to build an at-home
DVD library. Additional viewing periods -- including an option to
convert a disc to unlimited viewing on Divx players registered to a
consumer's account -- can be purchased through the Divx player. Divx
players will play all basic DVD discs, but players without the Divx
feature will not play the more modestly priced Divx discs.
Harman Kardon expects to offer the Divx feature in its second
generation DVD product line, which will be available to consumers in
Six major motion picture studios -- Disney, Paramount, Universal,
Twentieth Century Fox, Metro-Goldwyn-Mayer and DreamWorks -- have
multi-year agreements to make titles available on Divx discs.
The Divx capability is being licensed to Harman Kardon by Digital
Video Express, LP, a partnership between Richmond-based Circuit City
Stores, Inc. (NYSE : CC, KMX), the nation's largest retailer of
brand-name consumer electronics, and a prominent Los Angeles
entertainment law firm.
The Harman Consumer Group [HCG] includes the worldwide operations
of Harman Kardon, Citation, JBL, Infinity, Concord and Audioaccess.
HCG is a part of Harman International Industries, Inc., worldwide
manufacturers and marketers of professional, OEM and consumer
audio/video products [NYSE: HAR].
Divx recently provided me with a packet of press materials,
including an interesting full-color promotional flyer. I've included
pictures of it for all of you to see - I think you'll find it
interesting! The full text follows the pictures:
(above left) and Back (above right) covers.
(2 pages - across fold) of promotional flyer (above).
You'll never look at movies the same way again.
Sit. Watch. Whatever you want. Whenever you want.
[PIX OF CHAIR - CAPTION: Comfy chair for movie watching. Not
included in price.]
Watching movies at home has never been this convenient. This easy.
This much fun. Introducing Divx. It's the perfect way to
complement all the DVD movies you own. Because it offers you all the
benefits of DVD. And then some. The future of home entertainment is
here. Divx. You've reached the point of no return.
[PIX OF DISC - CAPTION: Divx disc. That hot new movie you
want to see goes here.]
How does it work. It's simple. It's convenient. You buy your
Divx digital movie for about $4.50. You take it home and
play it whenever your little heart desires. You keep it forever. Or
you give it to a friend. (Hey, we'll even recycle it for you.)
The price includes a two-day viewing period. But the clock doesn't
start ticking when you leave the store. It starts when you insert
the disc into a Divx player and push the play button. On the
day you buy the movie. The next week. Or even months later. We did
say "convenient," didn't we? Discs can be paused, stopped,
and played multiple times during the viewing period.
And if you want to watch the movie again, after the first viewing
period, you can simply purchase additional viewings for just $3.00
through the on-screen menu of your Divx player. You don't
have to go anywhere. Is that convenient or what? Of course, there
are those movies you absolutely fall in love with after you watch
them once. Movies you just know you'll want to watch over and over.
Well, many Divx discs can also be converted to "unlimited
viewing" by paying a one-time fee. Easily. Through your Divx
player. (We wouldn't want to inconvenience you!)
[PIX OF PLAYER - CAPTION: Divx player. Watching a movie at
home will never be the same.]
It gets better. Divx will bring you plenty of copies
of all the new releases from studios like Disney, Paramount,
Universal, and Dreamworks. So you'll actually get to see the movie
you want - before all your friends tell you the surprise ending.
And because Divx is DVD technology, you get all the
benefits of great picture and sound that is unbelievable. The first
time you play it. And the gazillionth time you play it.
The end. Divx is about being in control. It's about
sitting back. Putting your feet up. And watching the movie you want
to watch at the precise moment you're in the mood to watch it. At
3:00 A.M. Or at 3:06 A.M. Today. Or five months from now. It's the
ultimate in convenience. Divx. Enjoy.
[Divx logo - CAPTION: You've reached the point of no return.]
You've reached the Point of no return.
[Divx logo - CAPTION: www.divx.com.]
A few days ago, Circuit City (Divx's new retail partner) let it
slip in a press release that San Francisco would be one of the two
markets chosen by Divx for their April test run. Now we have
something of a confirmation from Consumer
Electronics magazine. We also finally know the other market -
Richmond, VA. Here's the full article:
Richmond and San Francisco are Divx
(Consumer Electronics - March 23, 1998)
Monday Circuit City's home base of Richmond, Va., will serve as 2nd
of 2 Divx introductory markets where Zenith hardware and slate of
65-70 software titles rolls out starting in May, we have learned.
Richmond thus would join San Francisco, home turf of Good Guys,
which last week said its 19 Bay Area stores will carry Zenith-Inteq
Divx DVD players this spring, followed by RCA decks in summer,
Panasonic and ProScan models by fall. Good Guys will join similar
number of Circuit City stores in San Francisco that also will carry
Zenith players and Divx software.
Divx spokesman wouldn't confirm or deny Richmond report, saying
only that 2nd introductory market has been finalized, regardless of
whether Divx retail chains other than Circuit City ultimately are
signed on there. Spokesman said Divx is aggressively pursuing
additional Divx retail partnerships. He said 2nd introductory market
won't be announced until soon before actual launch in May. Circuit
City has 4 stores in its home Richmond base area.
Circuit City has been actively pitching for Sears support on Divx,
presumably to build hardware ubiquity, but also as possible foot in
door at Musicland, which cross-promotes DVD with Sears and where
Circuit City would crave Divxsoftware placement. However, Sears
executives say they're undecided on Divx, and Musicland Chmn. Jack
Eugster told last week's San Francisco NARM convention that his
company remains opposed to it. Eugster said Musicland "has an
open view" on supporting demands of consumers, "but the
product also has to fit the needs of our company." He said he
has urged Divx officials to "pay attention to the fact that
retailers are not particularly excited about the idea of a product
being sold, and then... added on to and becoming a full lifetime
sellthrough product without us participating in that."
Similarly, Good Guys affords Circuit City credible west coast Divx
endorser, presumably with future bridge to formidable Tower Records
chain. Good Guys and Tower have corporate and commercial
partnerships, but Tower Chmn. Russ Solomon has been among Divx's
most outspoken critics. At NARM, Solomon told us there's no change
in his opposition. Mindful that Divx hardware and software will be
merchandised in collaborative "Wow" stores shared by Good
Guys and Tower, Solomon agreed that was sticky issue that hadn't
been addressed yet. Good Guys Pres.-CEO Robert Gunst has been among
few Circuit City rivals to refrain from openly disparaging Divx
concept on ground that if consumers ultimately clamor for it, he
feels responsibility to carry it. Statement last week quoted him as
echoing Divx party line, that Good Guys views Divx as "breakthrough
feature enhancement to DVD. " Zenith tentatively priced first
Divx deck -- based on first-generation DVD hardware technology -- at
$599, but we're told Circuit City would prefer $499. Final pricing
decision was expected soon.
Gunst told us Good Guys will merchandise Divx software in same
section ofstores as hardware. About 67 titles are expected by early
May, 100 by late May, 150 by fall, 500 after first year. We're told
Divx software will be distributed through rackjobbers. Divx is
quoting $4.50 selling price on most movies, based on final wholesale
cost to dealer of $3, including 50 cents in promotional and
introductory allowances. We're told Divx has landed long-term
replication deal with Nimbus to deliver software in modified
jewelboxes at 90 cents per disc, well below average $1.60 quoted by
other replicators as going rate for bare-bones DVD movie. Of $3 per
disc in wholesale revenue, about half is expected to go to studio,
which also stands to make additional $1.25 per title when consumer
renews for additional 48-hour viewing period. Crux of resentment
toward Divx by traditional video rental outlets is that those stores
won't figure in Divx revenues after customer buys initial disc and
takes movie home. Titles listed for Divx launch won't include any
films that won't already have been released on VHS at that point.
Most also will have been released on regular DVD before Divx launch
-- major exceptions being those from Paramount, which has 15 catalog
titles listed for launch, and DreamWorks, 2. Other titles are from
Disney (31) and Universal (21) and all will have been available on
VHS before they're released on Divx, and most of which already have
been been announced for or released on regular DVD. As expected,
Fox, which didn't announce Divx endorsement until mid-Feb., won't
participate in introductory 2-market launch this spring.
Zenith won't post operating profit this year, said wire service
reports, quoting senior officials at majority shareholder LG
Electronics. LG said Zenith's management is developing business plan
to turn company around, and LG, which owns 55% of Zenith shares, is
in talks with company board concerning plan.
Well folks, after all these months of listing to the hype, I have
seen a Divx player up-close. You can read my full report in my
latest feature article, Divx:
Beyond the Hype - A First Look at a Divx Player. Complete
with pix of the player, discs and menu screens, I think you'll find
it an interesting read!
Well, folks... this weekend, I will be getting an up-close look at
an actual Divx player. After all these months of reading the Divx
news, I must say I'm curious to finally see it firsthand. I'll
definitely be giving you a full report of the demonstration (along
with my comments), so be sure to stay tuned.
In the meantime, Divx has released a tentative list of the titles
they will have available for their April test run. Keep in mind that
all will be pan & scan only, with no additional features. The
titles are as follows:
Bullets Over Broadway
Clear and Present Danger
Day of the Jackal
Death Becomes Her
Escape From L.A.
Father of the Bride
The First Wives Club
For Richer or Poorer
George of the Jungle
The Ghost and the Darkness
Good Morning Vietnam
Grosse Pointe Blank
The Hand That Rocks the Cradle
The Hunt for Red October
In & Out
Night Falls on Manhattan
Nothing to Lose
The Nutty Professor
Play Misty for Me
The River Wild
Romy & Michele's High School Reunion
Sea of Love
She's So Lovely
Star Trek: First Contact
Star Trek Generations
While You Were Sleeping
[Editor's Note: I made a quick call to Fox Home Video's VP of Media
Relations Steve Feldstein, to try to get a better sense of the
announcement from Fox's perspective. He was quite decent, but
unfortunately, could not comment beyond the press release you see
below. Rest assured however, that the phones over at Fox were
ringing off the hook...]
Century Fox to Release Product on Divx
Fox Joins Four Other Studios in Support of Divx
(General Press Release - February 19, 1998)
BEVERLY HILLS, CA/HERNDON, VA., February 19, 1998 -- Twentieth
Century Fox Home Entertainment (TCFHE) and Digital Video Express, LP
(Divx) have reached a multiyear agreement that will allow for TCFHE
feature film video products to be released on Divx discs. Plans call
for new video titles to be made available on Divx concurrent with
their VHS rental and major promotion sell-through release. A
selection of catalog products also will be made available on Divx.
Twentieth Century Fox joins four other motion picture studios in
supporting the Divx system, an enhanced DVD (Digital Versatile Disc)
model that provides greater consumer convenience and flexibility,
digital-quality picture and sound, and increased anti-piracy
"We believe that Divx is a great proposition for the growing
number of consumers entering the digital video marketplace,"
noted Pat Wyatt, Acting Head of Twentieth Century Fox Home
Entertainment. "Given the significant anti-copy safeguards that
Divx offers, we feel our film assets will be sufficiently protected
to allow for their day and date release with VHS."
"Fox's support of Divx is terrific news for at-home video
audiences as it expands the number of titles available on a digital
disc," said Richard L. Sharp, Chairman and Chief Executive
Officer, Divx. "Beginning later this year, the remarkable
dramas, comedies and action films that movie lovers have come to
expect from Twentieth Century Fox -- such as ALIEN
RESURRECTION, THE EDGE
and THE FULL MONTY -- will be
available in a high-quality, convenient digital format."
The Divx system enables consumers to purchase a special, encrypted
movie disc that contains a two-day viewing period. The 48-hour
viewing window begins, not when the consumer leaves the store, but
only after he or she inserts the disc into the Divx player and
presses play, either on the day of purchase, the following week or
months away. Because the disc never has to be returned, there are
never any late fees, and additional viewing periods can easily be
purchased through the player. Divx-equipped players will play all
basic DVD discs, but the lower-cost Divx discs cannot be played on
basic DVD players.
Other studios with long-term agreements with Divx include Disney,
Paramount, Universal and DreamWorks.
Twentieth Century Fox Home Entertainment is a subsidiary of
Twentieth Century Fox Film Corporation, a News Corporation company.
Recognized as an innovative global industry leader, Twentieth
Century Fox Home Entertainment is the marketing, sales and
distribution company for all FoxVideo and Fox Interactive products.
Visit Twentieth Century Fox Home Entertainment on the internet at
Digital Video Express, LP is a partnership of Richmond-based Circuit
City Stores, Inc. (NYSE: CC, KMX), the nation's leading consumer
electronics retailer, and a prominent Los Angeles entertainment law
firm. More information can be obtained about Divx on the internet at