thumb|right|270px|DivX headquarters in San Diego in 2008.

DivX, LLC (; also formerly known as DivXNetworks, Inc. and DiVX, Inc.) is a privately held American video technology company based in San Diego, California. DivX, LLC is best known for creating the DivX family of digital video codecs. The company's software has been downloaded over 1 billion times since January 2003.

The DivX codecs include the namesake MPEG-4 Part 2-based codec, the H.264/MPEG-4 AVC DivX Plus codec and the High Efficiency Video Coding DivX HEVC Ultra HD codec. DivX, LLC's offerings have expanded beyond the codec to include software for viewing and authoring DivX-encoded video. DivX, LLC also licenses its technologies to manufacturers of consumer electronics devices and components used in these devices, of which over 1 billion DivX-enabled devices have shipped worldwide. DivX certifies that these licensed products are able to properly play DivX-encoded video.

History

The origin of DivX, Inc. began with video engineer Jérôme Rota (aka Gej), who made the original "DivX ;-)" codec available on his personal website after he had reverse-engineered the Microsoft MPEG-4 V3 codec. Gej was looking for a way to compress his portfolio so he could transmit it using the Audio Video Interleave file format (AVI). The codec became popular because it enabled reasonable quality video transmission over the internet (see DivX). Co-founder Jordan Greenhall, a former Mp3.com executive, learned of the codec from friends, and used it to download a copy of "The Matrix".

In 2005, the company was renamed DivX, Inc. The company incurred net losses from its creation through the second quarter of 2005. The company was profitable for fiscal years 2005–07.

In November 2007, DivX bought MainConcept AG, a specialist provider of video and audio codec solutions.

In October 2010, Sonic Solutions completed their acquisition of DivX.

In February 2011, Rovi Corporation acquired Sonic Solutions (including the DivX business).

In April 2014, Rovi Corporation sold the DivX and MainConcept business to Parallax Capital Partners and StepStone Group.

In February 2015, NeuLion, Inc. acquired DivX, LLC.

In February 2018, a deal was finalized to sell certain DivX assets, intellectual property and subsidiaries from NeuLion, Inc. to Fortress Investment Group.

Revenue streams

DivX, LLC licenses its technologies to manufacturers of consumer electronic devices. DivX, LLC also licenses its technologies to manufacturers of integrated circuits designed to be used in consumer electronic devices. For example, on September 12, 2007, DivX, Inc. announced a licensing agreement with Qualcomm that allows the chip manufacturer to include DivX, Inc.'s technology in its video-enabled chipsets.

In addition to licensing, DivX, Inc. also certifies devices that can encode and/or play-back videos using the company's codec according to DivX, Inc.'s standards. The company has certified DVD players, digital televisions, digital cameras, portable video players, and portable video recorders. DivX, Inc.'s partners have shipped over 1 billion certified consumer electronic devices, representing over 2500 product models.

Prior to November 2007, DivX, Inc. also received revenue from Google by providing the option to download the Google Toolbar when downloading the DivX Player from the company's website. In November 2007, DivX, Inc.'s contract with Google expired, and the company started distributing a co-branded version of the Yahoo! Toolbar and a version of Internet Explorer 7 that was pre-configured with Yahoo! tools.

DivX Inc.'s financial reporting for the third quarter of 2008 indicated that the Yahoo! deal was proving to be more lucrative than the previous Google deal.

Soon after the company reported third quarter results, however, Yahoo! advised DivX, Inc. that it would cease making payments under the contract.

DivX, Inc. responded by suing Yahoo! in California Superior Court seeking damages and specific performance of the contract.

The company acknowledged, though, that its breach of the prior contract would materially affect its financial performance for 2008 and 2009. (In the first nine months of 2008, the Yahoo! deal accounted for 21% of DivX, Inc.'s revenue.)

Under the settlement, Yahoo! paid $9.5 million to DivX, Inc. Stage6 received a "Very Good" rating from PC World Magazine.

On September 6, 2007, DivX, Inc. filed a declaratory judgment action in federal district court in San Diego against Universal Music Group, Inc. In the lawsuit, DivX, Inc. sought a declaration from the court that DivX Inc.'s operation of Stage6 fell within the safe harbor protection provided by the Digital Millennium Copyright Act for hosting websites against claims of copyright infringement.

On October 16, 2007, UMG filed an action against DivX, Inc. in federal district court in Los Angeles for copyright infringement. UMG then moved to have the San Diego action dismissed in favor of the Los Angeles action. On February 5, 2008, the judge in the San Diego action granted UMG's motion to dismiss.

On February 25, 2008, DivX, Inc. announced its plan to permanently shut down Stage6 on February 28, 2008, instead of selling it or spinning it off.

Prior to the decision to close the site, disagreements within DivX, Inc. on what to do with site appears to have led to the resignations of senior personnel, including co-founders Jordan Greenhall and Darrius Thompson.

Acquisitions and investments

In August 2007, DivX, Inc. announced that it had acquired the assets of Veatros, LLC, a Lawrence, Kansas-based company. Veatros developed video processing technology at the University of Kansas' Information and Telecommunication Technology Center. The technology can be used for video search and discovery. The deal was for $2 million in cash plus an additional $2.5 million upon completion of certain technology-related milestones.

In November 2007, DivX, Inc. purchased Aachen, Germany based MainConcept AG. DivX, Inc. paid $22 million for the company, and will pay up to additional $6 million upon the completion of certain milestones in 2008. MainConcept developed and distributes one of the most popular codecs using the H.264 standard.

Awards

  • DivX, Inc. was selected as a Top 100 Private Company Award Winner 2006 by OnHollywood.
  • DivX, Inc. was ranked No. 1 in Entrepreneur Magazine's Hot 500 list for 2007.
  • DivX, Inc. was awarded Deloitte's elite Technology Fast 500 award 2007–2009.

References

  • DivX, Inc. web site
  • DivX, Inc. SEC filings
  • Background on DivX, Inc. IPO from Seeking Alpha
  • Venture Capitalist's Take on DivX, Inc.'s IPO