DIVX was introduced on September 8, 1997 (after previously being made under the code name Zoom TV), with the format under development since 1995. The format was a partnership between Circuit City and entertainment law firm Ziffren, Brittenham, Branca & Fischer, with the former company investing $100 million into the latter firm. One advertiser attempted to sign with the company, but was unable to do so, which spurred a lawsuit between the two.
Almost immediately after the format's reveal, a movement on the Internet was initiated against DIVX, particularly in home theater forums by existing owners of the then-still nascent DVD format. Broader groups of consumers had environmental concerns with the format, since under the advertised "no returns" model a disc would be discarded as waste once the initial user was done with it, rather than being reused as they were under the traditional rental model. Both companies that created the DVD format (Sony and Toshiba) also denounced DIVX, as did major studio distributor Warner Home Video (who was the first major American studio to distribute DVD) and the DVD Forum (a consortium of developers on the format who standardized DVDs). Titles in the DIVX catalog were released primarily in pan and scan format with limited special features, usually only a trailer (although a few widescreen titles did arrive on the format in early December 1998). This caused many home theater enthusiasts to become concerned that the success of DIVX would significantly diminish the release of films on the DVD format in the films' original aspect ratios and with supplementary material. Some early demos were also noted to have unique instances of artifacting on the discs that were not present on standard DVDs. Many people in various technology and entertainment communities were afraid that there would be DIVX exclusive releases, and that the then-fledgling DVD format would suffer as a result. DreamWorks, 20th Century Fox, and Paramount Pictures, for instance, initially released their films exclusively on the DIVX format (something that DIVX did not originally intend to happen). DIVX featured stronger encryption technology than DVD (Triple DES instead of CSS) which many studios stated was a contributing factor in the decision to support DIVX. Others cited the higher price of DIVX-compatible DVD players and rental costs as their reason for opposing the format, with one declaring DIVX as "holding my VCR hostage". One online poll surveyed 786 people on the format, of which nearly 97% disapproved of the format's concept, and another poll in December 1998 reflected 86% disapproval even if the format were free – a testament to the fierce online backlash the format received. As early as December 1997, news outlets were already calling the format a failure for Circuit City.
However, early concerns of alleged or feared constant usage of the phone line proved to be somewhat exaggerated, as all players needed to do was verify its usage twice a month. Despite this, informational-freedom advocates were concerned that the players' "dial-home" ability could be used to spy on people's watching habits, as well as copyright and privacy concerns about its licensing of the media, with some alleging it violated fair-use laws entirely.
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. As early as September 1998, Circuit City was looking for partners to share their losses from the format's launch. Retailers such as Blockbuster Video did not carry the format at all.
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.
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. The market share for DIVX players was 23% in January 1999, 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. 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. 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.
The format was discontinued on June 16, 1999, 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, and Variety estimated the total loss on the scheme was around $337 million. 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". This meant no DIVX discs could play any content after June 30, 2001, rendering the medium worthless.
Several DIVX players from other manufacturers were announced for the year 1999, but cancelled. This includes Harman Kardon, JVC, Pioneer and Kenwood, with the latter cancelling a late 1999 to early 2000 release.
Fost, Dan (June 18, 1999). "Divx's Death Pleases Opponents". The San Francisco Chronicle. Archived from the original on April 25, 2012. Retrieved March 29, 2019. http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/06/18/BU89741.DTL
Misek, Marla (December 1, 1997). "Divx: Studio Push or Consumer Pull?". EMedia Professional. Archived from the original on February 11, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19980211233851/http://www.onlineinc.com/emedia/DecEM/news12.html#a
Jim H. Taylor; Mark R. Johnson; Charles G. Crawford (November 21, 2005). DVD Demystified. ISBN 0-07-142396-6. 0-07-142396-6
Miles, Stephanie (April 30, 1998). "Divx dust-up looms". CNET News. Archived from the original on August 31, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000831173539/http://news.cnet.com/news/0-1003-200-328908.html
Elrich, David J. (May 22, 1998). "Zenith Death Watch is Over". E/Town News. Archived from the original on May 5, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990505023123/http://www.e-town.com/news/articles/zenith052298dea.html
Davis, Jim (September 9, 1997). "Zenith trumpets Divx for DVD". CNET News. Archived from the original on January 16, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990116222206/http://www.news.com/News/Item/0,4,14073,00.html
Yoshida, Junko (January 5, 1998). "VLSI's data-security IC finds spot in DVD player". TechWeb. Archived from the original on September 13, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990913002235/http://www.techweb.com/se/directlink.cgi?EET19980105S0068
Hunt, Bill (March 17, 1998). "Divx: Beyond the Hype". The Digital Bits. Archived from the original on April 28, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990428145918/http://www.thedigitalbits.com/articles/divx0317.html
Elrich, David J. (September 9, 1997). "Say Hello to DIVX". E/Town News. Archived from the original on January 17, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990117080757/http://www.e-town.com/news/articles/divx090997dea.html
Goldberg, Ron (October 1, 1998). "A Kinder, Gentler DIVX". E/Town News. Archived from the original on April 21, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990421174046/http://e-town.com/news/articles/divx100198rga.html
"CIRCUIT CITY STORES, INC. ANNOUNCES DIVX PARTNERSHIP". Circuit City Online. September 8, 1997. Archived from the original on January 29, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19980129142552/http://circuitcity.pic.net/help/pr90897div.html
Petrecca, Laura. "Divx nixes adviser's naming of ad agency". Advertising Age. Archived from the original on December 5, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19981205160100/http://adage.com/news_and_features/features/19971027/article5.html
Patrizio, Andy (January 12, 1998). "DVD Takes Spotlight As Divx Hides". TechWeb. Archived from the original on February 21, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990221114117/http://www.techweb.com/wire/story/TWB19980112S0013
"A Tale of Convergence". Electronic Gaming Monthly. No. 104. Ziff Davis. March 1998. p. 32. /wiki/Electronic_Gaming_Monthly
Bartoo, Jim (February 20, 1998). "Fox Home Video Enters Controversial Divx Deal". Los Angeles Times. Archived from the original on September 17, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000917054113/http://www.hollywood.com/news/topstories/02-19-98/html/2-4.html
Olenick, Doug (June 1, 1998). "Rival Retailers Shore Up Defenses As Divx Player Is Once Again Delayed". TechWeb. Archived from the original on October 6, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20001006211425/http://www.techweb.com/se/directlink.cgi?CRW19980601S0012
Jim H. Taylor; Mark R. Johnson; Charles G. Crawford (November 21, 2005). DVD Demystified. ISBN 0-07-142396-6. 0-07-142396-6
Miles, Stephanie (June 8, 1998). "Divx debut in limited rollout". CNET News. Archived from the original on September 15, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000915105519/http://news.cnet.com/news/0-1003-200-330046.html
"Divx at the Good Guys". The Digital Bits. September 15, 1998. Archived from the original on August 15, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000815194656/http://www.thedigitalbits.com/articles/divxgoodguys.html
"Divx Rolling Out; Western States Lead In Launch". TWICE. September 7, 1998. Archived from the original on December 2, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19981202195144/http://www.twice.com/domains/cahners/twice/archives/webpage_3091.htm
Miles, Stephanie (September 22, 1998). "Canadian firm extends Divx reach". CNET News. Archived from the original on February 22, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990222153451/http://www.news.com/News/Item/0,4,26682,00.html
Miles, Stephanie (October 2, 1998). "Thomson unveils Divx player". CNET News. Archived from the original on October 21, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20001021134623/http://news.cnet.com/news/0-1003-200-333809.html
Miles, Stephanie (December 10, 1998). "Curtain rising on new Divx player". CNET News. Archived from the original on October 26, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20001026170055/http://news.cnet.com/news/0-1006-200-336297.html
Patrizio, Andy (November 6, 1998). "DVD, Divx Promotions Kick In For Christmas". TechWire. Archived from the original on November 1, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20001101094745/http://www.techweb.com/wire/story/TWB19981106S0023
"Divx Battle Intensifies!". New Tekniques. January 4, 1999. Archived from the original on February 10, 2001. Retrieved September 18, 2019. https://web.archive.org/web/20010210210829/http://www.newtekniques.com/TekTicker/Archives/tektick030.html
Elrich, David J. (December 17, 1998). "Are DVD Players Dwindling?". E/Town News. Retrieved September 18, 2019.[dead link] http://community.etown.com/news/articles/dvdshortage121798dea.html
Aas, Robert (January 4, 1999). "Less than 17,000 Divx accounts registered". DVD News. Archived from the original on February 29, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000229073048/http://www.unik.no/~robert/hifi/dvd/news05.html
Davis, Jim (September 10, 1997). "DVD owners dis Divx". CNET News. Archived from the original on January 16, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990116224259/http://www.news.com/News/Item/0,4,14125,00.html
"A Tale of Convergence". Electronic Gaming Monthly. No. 104. Ziff Davis. March 1998. p. 32. /wiki/Electronic_Gaming_Monthly
Elrich, David J. (September 10, 1997). "DIVX No, Say Sony and Toshiba". E/Town News. Archived from the original on January 17, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990117090503/http://www.e-town.com/news/articles/divxtoshiba091097dea.html
Williams, Martyn (September 19, 1997). "DVD Forum Says DIVX Will Confuse Consumers". Newsbytes Pacifica. Archived from the original on January 30, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19980130171517/http://www.nb-pacifica.com/headline/dvdforumsaysdivxwill_1084.shtml
Tarr, Greg (November 19, 1998). "Divx Prepares To Ship First Widescreen Titles". TWICE. Archived from the original on February 24, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990224041132/http://www.twice.com/domains/cahners/twice/archives/webpage_3401.htm
Hunt, Bill (March 17, 1998). "Divx: Beyond the Hype". The Digital Bits. Archived from the original on April 28, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990428145918/http://www.thedigitalbits.com/articles/divx0317.html
Goldberg, Ron (October 1, 1998). "A Kinder, Gentler DIVX". E/Town News. Archived from the original on April 21, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990421174046/http://e-town.com/news/articles/divx100198rga.html
[1] The Digital Bits: Paramount jumps on DVD wagon; Fox, DreamWorks still out https://web.archive.org/web/20071007094046/http://www.digitalbits.com/articles/oldstudionews/paramount.html
Studio & DVD News - Paramount Archived October 7, 2007, at the Wayback Machine http://www.digitalbits.com/articles/oldstudionews/paramount.html
Mann, Warren (October 13, 1997). "Supporting new technology @ retail -- Should everyone pay the price for Divx?". TechWeb. Archived from the original on March 5, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000305082622/http://www.techweb.com/se/directlink.cgi?CRW19971013S0019
Lewis, Peter H. (January 28, 1999). "Life After the VCR: Choosing DVD or Divx". The New York Times. Archived from the original on February 26, 2002. Retrieved September 18, 2019. https://web.archive.org/web/20020226014736/http://www.nytimes.com/library/tech/99/01/circuits/articles/28pete.html
"Poll: DIVX Horribilis". E/Town News. September 25, 1997. Archived from the original on January 17, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990117010303/http://www.e-town.com/news/articles/polldivx092597swb.html
"Poll: If Divx were a free option, would you prefer a player with it built-in?". Stereophile Guide to Home Theater. December 13, 1998. Archived from the original on January 31, 2002. Retrieved September 18, 2019. https://web.archive.org/web/20020131031739/http://www.guidetohometheater.com/showvote.cgi?61
"Divx expensive loser for Circuit City in 1998". TechWeb. December 19, 1997. Retrieved September 18, 2019. [permanent dead link] http://techweb.cmp.com/crw/news/divx1219.html
Elrich, David J. (February 26, 1998). "Sony Disses DIVX". E/Town News. Archived from the original on April 23, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990423213637/http://e-town.com/news/articles/sony022698dea.html
Elrich, David J. (September 15, 1997). "Retailers Wary of DIVX". E/Town News. Archived from the original on January 17, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990117001138/http://www.e-town.com/news/articles/divxretail091597xxt.html
Mitchell, Kim; Barthold, Jim (September 15, 1997). "Home Video, PPV: Nix on Divx Format". Media Central. Archived from the original on December 5, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19981205032703/http://www.mediacentral.com/Magazines/CableWorld/News97/1997091502.htm
Goldberg, Ron (October 1, 1998). "A Kinder, Gentler DIVX". E/Town News. Archived from the original on April 21, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990421174046/http://e-town.com/news/articles/divx100198rga.html
Fost, Dan (June 18, 1999). "Divx's Death Pleases Opponents". The San Francisco Chronicle. Archived from the original on April 25, 2012. Retrieved March 29, 2019. http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/06/18/BU89741.DTL
Stutz, Michael (September 17, 1997). "Divx Protects Content, But Not Your Liberties". Wired. Archived from the original on December 5, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19981205194250/http://www.wired.com/news/news/technology/story/6947.html
Dranove, David; Neil Gandal (November 1, 2000). "The DVD vs. DIVX Standard War: Empirical Evidence of Vaporware". Competition Policy Center. Paper CPC01-016. Archived from the original on October 16, 2009. Retrieved April 16, 2010. http://repositories.cdlib.org/iber/cpc/CPC01-016/
"Divx Expenses, CarMax Loss Cut Net At Circuit City". TWICE. June 29, 1998. Archived from the original on January 29, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990129072302/http://www.twice.com/domains/cahners/twice/archives/webpage_2692.htm
"Divx Trims Circuit City's Qtr., Half Net". TWICE. September 7, 1998. Archived from the original on December 6, 1998. Retrieved September 18, 2019. https://web.archive.org/web/19981206073330/http://www.twice.com/domains/cahners/twice/archives/webpage_3008.htm
Matzer, Marla (September 17, 1998). "Doubts Arise as Divx Readies for National Debut". Los Angeles Times. Archived from the original on June 9, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000609034303/http://www.hollywood.com/news/topstories/09-17-98/html/2-5.html
Patrizio, Andy (December 20, 1998). "Divx 'Fan Sites' Raise Suspicion". TechWire. Archived from the original on October 15, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20001015061432/http://www.techweb.com/wire/story/TWB19981220S0001
Yoshida, Junko (January 7, 1999). "Thomson and Divx team up on high-definition DVD". EE Times. Archived from the original on April 27, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990427063018/http://www.eet.com/story/OEG19990107S0022
Ricadela, Aaron (March 26, 1999). "Divx Players Are On The Rise". TechWeb. Archived from the original on October 9, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19991009135359/http://www.techweb.com/wire/story/TWB19990326S0014
Aas, Robert (March 12, 1999). "Divx is losing momentum, Circuit City to cut spendings". DVD News. Archived from the original on May 7, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19990507234514/http://www.unik.no/~robert/hifi/dvd/news06.html
Aas, Robert (May 2, 1999). "Divx activity reduced". DVD News. Archived from the original on November 14, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19991114011256/http://www.unik.no/~robert/hifi/dvd/news08.html
Aas, Robert (June 8, 1999). "Divx anniversary on life support". DVD News. Archived from the original on September 17, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000917054206/http://www.unik.no/~robert/hifi/dvd/news09.html
"DIGITAL VIDEO EXPRESS, LP TO DISCONTINUE OPERATIONS". Archived from the original on October 13, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19991013054000/http://divx.com/
"Divx Is Dead". TechWeb. June 16, 1999. Archived from the original on September 17, 2000. Retrieved September 18, 2019. https://web.archive.org/web/20000917054448/http://www.techweb.com/wire/story/TWB19990616S0011
Frankel, Daniel (June 16, 1999). "Divx Turns to Dust". E! Online. Retrieved September 18, 2019. https://www.eonline.com/news/38320/divx-turns-to-digital-dust
Tynan, Dan (May 26, 2006). "The 25 Worst Tech Products of All Time". PC World. Archived from the original on July 30, 2014. Retrieved July 30, 2014. http://www.pcworld.com/article/125772/worst_products_ever.html
Jim H. Taylor; Mark R. Johnson; Charles G. Crawford (November 21, 2005). DVD Demystified. ISBN 0-07-142396-6. 0-07-142396-6
"DIGITAL VIDEO EXPRESS, LP TO DISCONTINUE OPERATIONS". Archived from the original on October 13, 1999. Retrieved September 18, 2019. https://web.archive.org/web/19991013054000/http://divx.com/
Tynan, Dan (May 26, 2006). "The 25 Worst Tech Products of All Time". PC World. Archived from the original on July 30, 2014. Retrieved July 30, 2014. http://www.pcworld.com/article/125772/worst_products_ever.html
"DIVX Players". DIVX. December 10, 1998. Archived from the original on February 25, 1999. Retrieved October 12, 2023. https://web.archive.org/web/19990225131137/http://www.divx.com/no_frills/dplayers_description.htm
"NEW AT-HOME MOVIE SYSTEM LAUNCHES IN SAN FRANCISCO AND RICHMOND". Circuit City. June 8, 1998. Archived from the original on February 18, 1999. Retrieved October 12, 2023. https://web.archive.org/web/19990218145903/http://www.circuitcity.com/help/pr060898.html
"Proscan DVD player with Divx feature en route to retail markets as Thomson expands product rollout". DIVX. November 24, 1998. Archived from the original on February 8, 1999. Retrieved October 14, 2023. https://web.archive.org/web/19990208232622/http://www.divx.com/no_frills/pr024.htm
"DIVX Players". DIVX. December 10, 1998. Archived from the original on February 25, 1999. Retrieved October 12, 2023. https://web.archive.org/web/19990225131137/http://www.divx.com/no_frills/dplayers_description.htm