Zoom TV is here!!!...........
It's called Divx, and it is supported by Disney and Universal, among others. Circuit City is a partner.
Circuit City Stores, Inc. Announces Divx Partnership
RICHMOND, Va., Sept. 8 /PRNewswire/ -- Circuit City Stores, Inc.
(NYSE: CC, KMX) announced today that it will increase its investment in
Digital Video Express,LP, a partnership that has developed a new system for
DVD players which provides significant copyright protection for movies
released on Divx digital discs and sets a new standard for home video
convenience.
A commitment to invest an additional $100 million positions Circuit City
as Divx's majority partner, with approximately two-thirds of the equity. The
remaining equity is held by the prominent Los Angeles entertainment law firm
Ziffren, Brittenham, Branca & Fischer.
The new Divx system has won support from major movie studios, including
Disney's Buena Vista Home Entertainment, Paramount Home Video, Inc., Universal
Home Video, Inc. and DreamWorks SKG, and from leading consumer electronics
manufacturers, including Zenith Electronics Corporation, Thomson Consumer
Electronics and Matsushita Electric. Divx allows consumers to purchase
physical ownership of a special, encrypted movie disc for a suggested price of
less than $5. The purchase price includes a two-day viewing period that
begins when the consumer inserts the disc into a DVD player equipped with the
Divx capability and pushes play for the first time. Divx players will play
all standard DVD discs, but the lower-priced Divx rental discs cannot be
played on standard DVD players.
The Divx disc is never returned, and so the consumer never has to pay late
fees. The disc becomes part of the consumer's home video library, with
additional viewing periods easily purchased through the Divx player.
Consumers also will be able, through the player, to convert many titles to
unlimited viewing for a one-time fee, and certain titles will be available for
purchase in the store as unlimited viewing discs.
Because the discs are purchased by the consumer, Divx expects to make
ample supply available to meet the high demand that occurs when new titles are
released to the rental market. The movie studios have signed multi-year
agreements to provide all new titles and almost a thousand catalog titles for
release on Divx discs. Divx's new titles will be released to the public on
the same date as VHS tapes. More than 100 titles are expected to be available
at product launch, with a total of approximately 500 available within the
first year.
Zenith expects to introduce Divx players as part of the high-end
Zenith-Inteq series in a limited launch next spring. Thomson, under the RCA
and Proscan brand names, and Matsushita, under the Panasonic brand name,
expect to offer players nationwide next summer.
Divx will license and distribute studio productions in its proprietary,
digital format and authorize access to those productions via its host computer
system. Divx also will license the proprietary hardware architecture to the
consumer electronics manufacturers.
Additional information is contained in a separate announcement released by
Divx and by accessing the Divx website at divx.com.
"The Divx system offers unparalleled convenience for consumer home video,
strong copyright protection and economics for studios and incremental sales
possibilities for manufacturers," said Richard L. Sharp, chairman and chief
executive officer of Circuit City Stores, Inc. "We believe the tremendous
market potential Divx represents creates an opportunity for outstanding
shareholder returns."
The investment announced today will be made throughout the period between
now and launch of the first Divx movie titles and Divx players next spring.
The company expects its investment to reduce Circuit City Group net earnings
for the fiscal quarter ended August 31, 1997, by 3 cents per share. Despite
that reduction, the company expects to report for the Circuit City Group
second quarter net earnings per share of approximately 28 cents, meeting or
exceeding analysts' earnings expectations.
The company expects that its investment will reduce Circuit City Group net
earnings for the full fiscal year by approximately 27 cents, including 3 cents
recorded in the first quarter, the 3-cent second quarter impact, 7 cents for
the third quarter and another 14 cents in the fourth quarter. The remainder
of the investment is expected to reduce net earnings in next fiscal year's
first quarter by approximately 14 cents.
Circuit City Stores, Inc. is the nation's largest retailer of brand-name
consumer electronics and major appliances and a leading retailer of personal
computers and music software. With headquarters in Richmond, Va., Circuit
City operates 460 Superstores, four consumer electronics-only stores, 52
mall-based Circuit City Express stores and 11 CarMax Superstores. For more
information, access the Circuit City web site at circuitcity.com
and the CarMax web site at carmax.com.
This release contains forward-looking statements, which are subject to
risks and uncertainties, including, but not limited to risks associated with
the development of a new concept. Additional discussion of factors that could
cause actual results to differ materially from management's projections,
forecasts, estimates and expectations is contained in the company's SEC
filings.
Circuit City Stores, Inc. news releases are available through Company News
On-Call, by fax, 800-758-5804, extension 166181, or at
prnewswire.com.
SOURCE Circuit City Stores, Inc.
CONTACT: Ann M. Collier of Circuit City Stores, 804-527-4058 |
