Editing DIVX (section)

===Demise===
Right after the launch of the format, Circuit City announced that despite a gain of 4.1% in net profit, huge expenses of launching that format (among other issues) massively undercut that profit.<ref>{{cite web|url=http://www.twice.com/domains/cahners/twice/archives/webpage_2692.htm|title=Divx Expenses, CarMax Loss Cut Net At Circuit City|date=June 29, 1998|website=TWICE|archive-url=https://web.archive.org/web/19990129072302/http://www.twice.com/domains/cahners/twice/archives/webpage_2692.htm|archive-date=January 29, 1999|url-status=dead|access-date=September 18, 2019}}</ref> As early as September 1998, Circuit City was looking for partners to share their losses from the format's launch.<ref>{{cite web|url=http://www.twice.com/domains/cahners/twice/archives/webpage_3008.htm |title=Divx Trims Circuit City's Qtr., Half Net|date=September 7, 1998|website=TWICE|archive-url=https://web.archive.org/web/19981206073330/http://www.twice.com/domains/cahners/twice/archives/webpage_3008.htm|archive-date=December 6, 1998|url-status=dead|access-date=September 18, 2019}}</ref> Retailers such as [[Blockbuster (retailer)|Blockbuster Video]] did not carry the format at all.<ref>{{cite web|url=http://www.hollywood.com/news/topstories/09-17-98/html/2-5.html|title=Doubts Arise as Divx Readies for National Debut |first=Marla |last=Matzer|date=September 17, 1998|website=Los Angeles Times|archive-url=https://web.archive.org/web/20000609034303/http://www.hollywood.com/news/topstories/09-17-98/html/2-5.html|archive-date=June 9, 2000|url-status=dead|access-date=September 18, 2019}}</ref> 

The format's credibility suffered another blow when suspicions were raised about the nature of apparently independent pro-DIVX websites. Circuit City denied any involvement in creating these sites, one of which closed shortly after tech journalists tried to contact its webmaster.<ref>{{cite web|url=http://www.techweb.com/wire/story/TWB19981220S0001|title=Divx 'Fan Sites' Raise Suspicion|first=Andy|last=Patrizio |date=December 20, 1998|website=TechWire|archive-url=https://web.archive.org/web/20001015061432/http://www.techweb.com/wire/story/TWB19981220S0001|archive-date=October 15, 2000|url-status=dead|access-date=September 18, 2019}}</ref>

DIVX and Thomson Consumer Electronics teamed up in January 1999 to create another format made for high-definition video using existing DVD technology, predating the development of both [[Blu-ray]] and [[HD DVD]] by many years.<ref>{{cite web|url=http://www.eet.com/story/OEG19990107S0022 |title=Thomson and Divx team up on high-definition DVD|first=Junko|last=Yoshida|date=January 7, 1999|website=EE Times|archive-url=https://web.archive.org/web/19990427063018/http://www.eet.com/story/OEG19990107S0022|archive-date=April 27, 1999|url-status=dead|access-date=September 18, 2019}}</ref> The market share for DIVX players was 23% in January 1999,<ref>{{cite web|url=http://www.techweb.com/wire/story/TWB19990326S0014|title=Divx Players Are On The Rise|first=Aaron|last=Ricadela|date=March 26, 1999|website=TechWeb |archive-url=https://web.archive.org/web/19991009135359/http://www.techweb.com/wire/story/TWB19990326S0014|archive-date=October 9, 1999|url-status=dead|access-date=September 18, 2019}}</ref> and by that March, around 419 titles were available in the DIVX format. However, sales for the format quickly fell off after the 1998 holiday season, with all three third-party retailers pulling out of DIVX sales by that point.<ref>{{cite web |url=http://www.unik.no/~robert/hifi/dvd/news06.html|title=Divx is losing momentum, Circuit City to cut spendings|first=Robert|last=Aas|date=March 12, 1999|website=DVD News |archive-url=https://web.archive.org/web/19990507234514/http://www.unik.no/~robert/hifi/dvd/news06.html|archive-date=May 7, 1999|url-status=dead|access-date=September 18, 2019}}</ref> In May, studio support for DIVX would start to be phased out with Paramount refusing to convert their titles to "Silver" discs (and then later stopping DIVX releases entirely), and Disney increasing their DVD activity.<ref>{{cite web|url=http://www.unik.no/~robert/hifi/dvd/news08.html|title=Divx activity reduced|first=Robert|last=Aas|date=May 2, 1999|website=DVD News|archive-url=https://web.archive.org/web/19991114011256/http://www.unik.no/~robert/hifi/dvd/news08.html|archive-date=November 14, 1999|url-status=dead|access-date=September 18, 2019}}</ref> By the format's first anniversary, the future of the format was very grim - with only five DIVX-compatible players (and no DIVX-compatible computer drives), 478 titles, and only Circuit City selling DIVX discs.<ref>{{cite web|url=http://www.unik.no/~robert/hifi/dvd/news09.html|title=Divx anniversary on life support|first=Robert|last=Aas|date=June 8, 1999|website=DVD News|archive-url=https://web.archive.org/web/20000917054206/http://www.unik.no/~robert/hifi/dvd/news09.html|archive-date=September 17, 2000|url-status=dead |access-date=September 18, 2019}}</ref>

The format was discontinued on June 16, 1999,<ref name=DiscontinuationDate1/><ref>{{cite web |url=http://www.techweb.com/wire/story/TWB19990616S0011|title=Divx Is Dead|date=June 16, 1999|website=TechWeb|archive-url=https://web.archive.org/web/20000917054448/http://www.techweb.com/wire/story/TWB19990616S0011|archive-date=September 17, 2000|url-status=dead|access-date=September 18, 2019}}</ref><ref>{{cite web|title=Divx Turns to Dust |url=https://www.eonline.com/news/38320/divx-turns-to-digital-dust|last=Frankel|first=Daniel |date=June 16, 1999|website=E! Online|access-date=September 18, 2019}}</ref> because of the costs of introducing the format, as well as its very limited acceptance by the general public and retailers. At the end of the format's life, Circuit City announced a $114 million after-tax loss,<ref name="DanTynan2006"/> and [[Variety (magazine)|Variety]] estimated the total loss on the scheme was around $337 million.<ref name="DVDDM"/> Over the next two years, the DIVX system was phased out. Customers could still view all their DIVX discs and were given a $100 refund for every player that was purchased before June 16, 1999. All discs that were unsold at the end of the summer of 1999 were destroyed. The program officially cut off access to accounts on July 7, 2001. The player's Security Module, which had an internal Real-Time Clock, ceased to allow DIVX functions after 30 days without a connection to the central system. Unsold players were liquidated in online auctions, but not before being modified to remove the DIVX Security Module. As a result, certain player models demonstrated lockups when DIVX menus were accessed.

On the company website to announce discontinuation of the product on June 16, 1999, it stated: "All DIVX-featured DVD players are fully functional DVD players and will continue to operate as such. All DIVX discs, including those previously purchased by consumers and those remaining in retailer inventories, can be viewed on registered players anytime between now and June 30, 2001. Subsequent viewings also will be available during that period. Discs can no longer be upgraded to unlimited viewing, known as DIVX Silver. Customers who have converted discs to DIVX Silver can continue viewing the discs until June 30, 2001, or can receive a full refund of the conversion price at their request".<ref name=DiscontinuationDate1/> This meant no DIVX discs could play any content after June 30, 2001, rendering the medium worthless.

DIVX appeared as a "dishonorable mention" alongside ''[[PC World]]''<nowiki>'</nowiki>s list of "25 Worst Tech Products of All Time" in 2006.<ref name=DanTynan2006>{{cite web|url=http://www.pcworld.com/article/125772/worst_products_ever.html|title=The 25 Worst Tech Products of All Time|first=Dan|last=Tynan |date=May 26, 2006|website=PC World|archive-url=https://web.archive.org/web/20140730090626/http://www.pcworld.com/article/125772/worst_products_ever.html|archive-date=July 30, 2014|url-status=live|access-date=July 30, 2014}}</ref>