Buy a CD-like disc for around $4.50, and you have 48 hours to watch it once it's put into your Divx player. When your time's up, you can buy more time, or toss the disc in the trash.
On Wednesday, though, it was Divx (short for Digital Video Express; the acronym's pronounced "div-ex") that got thrown away, falling into the technological waste bin with Beta and CD-i.
Pushing the disc's eject button was Divx's two investors, the unlikely pairing of Richmond, Virginia-based electronics retailer Circuit City and Los Angeles entertainment law firm Ziffren, Brittenham, Branca & Fischer.
Simply put, the investors learned what electronics manufacturing giants like Sony and Philips already found out the hard way--you can't establish a technology unless you get some help.
Support didn't come from the movie studios, despite Circuit City paying them tens of millions to release movies in the Divx format--which is an almost identical technology to Digital Video Disc (DVD), only there's no limit on how long you can view DVDs. (In fact, Divx players play regular DVD's just fine.)
Some studios were apathetic. Others, like Warner Bros. and Sony, openly opposed Divx, feeling the format confused consumers and hampered the growth of DVD.
Support didn't come from video rental giants like Blockbuster or Hollywood Video, either. They feared that people would rent fewer videos if they didn't have a reason to return to the store to check in their movies--a concern shared by the studios.
And the love didn't come from other electronics retailers, who didn't want to hawk Divx-capable DVD machines because a huge competitor, Circuit City, had a big piece of the future rental revenues.
That left Circuit City on its own to supply the hardware and a limited amount of software (i.e. movies) to consumers. Sony, of course, faced a similar situation in the '80s with its Betamax video tape players--a superior technology to VHS, but a failure since it didn't get the software support.
"Divx was a good product, no question about that. But because the movie studios didn't totally buy into it and because of the lack of retail distribution beyond Circuit City stores, this product simply didn't have the potential for long-term growth," said analyst Kenneth Gassmand.
Added analyst Ursula Morgan: "What happened was the Hollywood contingent saw that the better thing to do to protect their own interests was to make sure the video rental model remained in place. Buying Divx meant consumers didn't have to rent videos anymore."
As for Divx customers, they're hardly out in the cold. Circuit City will continue to sell existing titles to them for another two years. The electronics chain will also reimburse them $100--roughly the price difference between a Divx player and a standard DVD player.
Not so lucky: Circuit City, which will reportedly experience an after-tax loss of $337 million once all the Divx dust settles.