Divx, a company best known as the format of choice for dodgy pirated movies on the internet, has made a string of major announcements at this week's Consumer Electronics Show, and is poised to compete with the major players in digital entertainment -- namely, Apple and Microsoft.
At CES, the company announced it has partnered with D-Link to build a living-room media hub that will stream movies, TV shows and other internet content directly off the Net. The D-Link DSM-330 DivX Connected HD Media Player, which has been available in Europe since November, will launch here in the U.S. sometime in the first half of 2008, Divx says.
The company also inked a major deal with Sony Pictures that will let online retailers offer the studio's entire library for download and playback on Divx certified devices. Divx recently made a deal with Sony to integrate Divx payback into the PlayStation3.
The D-Link media player is based on the company's Divx Connected platform -- a branded streaming technology that Divx is licensing to a wide range of hardware manufacturers, including Sony, Samsung and LG.
"We're really a rallying flag for these companies to have an answer (for what Apple does)" said Divx CEO Kevin Hell. "So when Apple does an iPhone or Apple does the Apple TV, Samsung or LG can do something similar."
Until recently, Divx was probably best know as for its popular video-compression format, which has become the go-to platform for distributing pirated content. Thanks to the format's popularity on the internet, the company has well over 300 million software downloads in the bag and more than 100 million Divx-certified devices are now on the market.
"Obviously, there's a huge explosion of digital video on the internet…" Hell said. "But if you want to take that content and do anything with it, including moving it around, you really have to be an expert."
Hell said his company's new hardware partnerships are part of a larger plan to solve what he describes as one of the biggest problems in the tech: a digital media ecosystem dominated by propriety devices and services.
In his estimation, Apple exemplifies this notion with hardware that is closely tied to Apple's software and online services, to the exclusion of everyone else.
During a pre-CES briefing, Hell described wanting change this by offering an entire ecosystem of Divx-certified devices, from DVD players to phones, media hubs, cameras, and televisions.
He said it would be akin to what Apple's attempting to do, but more open.
"We like what Apple does because it drives folks to us when they want to compete (with the Cupertino company)," Hell said.
Instead of offering a "vertically closed ecosystem like Apple," Divx is now trying to work with anyone and everyone in the industry to release devices that can playback Divx-encoded content, including movies, MP3s, pictures, traffic information, weather -- basically anything that can be wrapped up in a Divx format.
Currently, the company says it has deals with almost every major electronics manufacturer, but the push to expand into new devices will continue well into 2008.
Unlike the Apple TV, the new D-Link hub announced at this week's CES does not include a hard drive. Instead the Divx Connected platform delegates storage to the internet or your PC, according to Hell. This will not only makes Divx Connected devices far cheaper than something like the Apple TV (in some cases, under $100, Hell says), but also make the process of moving content around to various devices much easier. The D-Link hub also has an HDMI output and can do 1080p video, according to Divx.
Apple TV has HDMI, but does not offer HD content.
James Goss, an analyst at Barrington Research, said the hardware deals are important but the big news is undoubtedly the distribution deal with Sony Pictures.
"It doesn't necessarily point to dollars flowing in the door (for Divx), but it does open the door for more deals with major players to take place," Goss said. "To me, its creates a sense that Divx can work with studios."
As any industry observer knows, those deals have been notoriously hard to come by. The lack of movies -- including HD content and rentals -- on iTunes is thought to be one of the major reasons the Apple TV sales have remained stagnant. The same can be said for Microsoft and its Media Center extenders.
As Goss notes, a lot of what Divx is trying to do with this new open approach to digital content is simply not going to work unless the company can get professional content.
Sony itself says the deal with Divx was part of its ongoing attempts to find legitimate ways of distributing its content online. Indeed, if more and more studios consider Divx legitimate, then 2008 could be a very big year for the company.
Hell says the company plans to embed Divx Connected technology into a whole slew of new devices, including DTVs, set-top boxes and "connected" DVD players in the near future.
Photo courtesy of Divx
