What was the Divx system and how did it work?
The Divx system, which failed in the marketplace, allowed consumers to buy special encrypted movie
discs for about the price of a VHS rental. The purchase included a
two-day viewing period that began, not when consumers left the
store, but only when they inserted the disc into a Divx player and pressed
play. That could be on the day the disc was purchased or weeks or
months later. Discs could be paused, stopped and played multiple
times during the viewing period. Divx-enhanced DVD players play
all basic DVD discs, but the lower-cost Divx discs cannot be played
on DVD players without the Divx feature.
The consumer owned the discs and never needed to return them, eliminating
all late fees. Additional viewing periods -- including an option to
purchase unlimited play (on virtually all titles) -- could be purchased
through the Divx player. Divx allowed consumers to build a convenient,
economical home video library, but Divx discs could be traded with
or given away to friends or relatives.
Soon after hooking up their players, Divx customers establishrd an
account with Divx. Through this account, consumers were billed for the
purchase of any subsequent viewing periods or for converting a disc to
unlimited play. The player plugged into a standard phone jack and
made a 30-second, toll-free call about once a month, usually in the
middle of the night, to send billing information. The phone line was not
used during the playing of the movie, and a separate phone line was not
required. The player never interfered with a consumer's use of the
phone.
What were the different types of Divx discs?
There were three types of Divx discs: 1) the "rental" discs, sold at retail
for a suggested price of about $4.50 (the disc included a two-day
viewing period); 2) DivxSilver discs, which started as "rental" discs but
were later converted for a one-time-fee by the disc owner to
unlimited play on players registered to his or her account; and 3)
DivxGold discs, which were purchased much like a basic DVD at retail.
DivxGold discs could be played an unlimited number of times without
charge on any Divx player.
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