DVD Takes Spotlight As Divx Hides
By Andy Patrizio
The lack of fanfare surrounding Digital Video Express, or Divx, at the Consumer Electronics Show in Las Vegas was surprising, considering the product hype that characterizes the show every year.
Divx is the creation of retail giant Circuit City and a Los Angeles entertainment law firm, and has caused one of the loudest and nastiest wars among home videophiles. Nowhere was that ill feeling more obvious than at CES.
Circuit City CEO Richard Sharp has become a lightning rod for anti-Divx sentiment, in part because of his callous attitude toward early adopters of the digital versatile disc, or DVD, Divx's main rival. Divx would render DVD players obsolete.
Divx is essentially pay-per-view DVD, a video format that fits an entire movie onto a standard-sized compact disc. Divx players are expected to sell for around $1-- more than DVD players, which start at around $4--.
Consumers must now buy DVD movies, since few stores rent them out. That's where Circuit City hopes Divx will come in. For $5 to $7, a customer can buy a Divx movie and watch it an unlimited number of times for 48 hours after the first viewing. After that, the disc can be thrown away.
"I don't see how Divx can survive," said Jim Cardwell, executive vice president at Warner Home Video. Warner has been one of the earliest and most enthusiastic supporters of DVD, and has no plans to issue Divx discs.
On the floor, Divx was all but invisible. Circuit City's Sharp gave private demonstrations of Divx players, but neither Zenith nor Panasonic, which are making the players, had a Divx prototype on the floor.
Only RCA was showing off a Divx prototype, which sat unplugged while a DVD demo ran. RCA's position is "to let consumers make the choice," said a company representative. "We're not taking a position for or against Divx. We're just going to support both formats."
Other consumer electronics vendors at the show had even less to say about Divx. Pioneer, Sharp, Sherwood, and JVC all said they were "evaluating" Divx's potential, but nothing more. When pressed, company representatives admitted they were unwilling to take a position on Divx because anti-Divx sentiment was so strong.
The anti-Divx crowd aside, Divx just doesn't have the support it needs. Warner and Sony Pictures won't make Divx discs. Suncoast Motion Picture Stores and Tower Records will not carry the discs; Blockbuster has yet to make a decision. Best Buy, Circuit City's major competitor, is the biggest supporter of DVD and has no plans to carry Divx.
"Divx has got a pretty tough road ahead," said Mike Grice, DVD product manager for Image Entertainment in Chatsworth, Calif. "Retailers don't want it, distributors don't want it, some studios won't support it. I haven't spoken to anyone who is pro-Divx."
Only Paramount Pictures has signed on to make Divx discs and to not support DVD. The Walt Disney Company has released live action DVD movies, but reportedly is saving its library of animated movies for Divx.
One of the areas of contention between Divx and DVD concerns the DVD player, which won't play Divx discs, although the reverse is true. DVD vendors and owners feared it would confuse the marketplace and slow DVD's market penetration.
The privacy issue seems to be the thorniest. "Divx is a mistake," said Simon Bender, vice president of Diplomat Merchandise, a consumer electronics distributor in Brooklyn, N.Y. "People don't want to give a manufacturer a record of the movies they purchased."
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