Subject: Forbes Article on Divxnetworks part 2
From Beer_Man
PostID 303391 On Thursday, January 01, 2004 (EST) at 9:00:15 PM
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But by then Greenhall was on to the next phase of his plan. To become the next MPEG2 Greenhall knew he had to get the codec out of PCs and into other consumer gadgets. Chipmakers, attracted by his Internet following, signed on. Today Philips and Samsung are building DivX-compatible DVD players, and 59 other companies are also building DivX-branded gear, including a video camera. Enter ''autocatalytic cycle'' number two: People burn DivX-encoded movies onto DVDs on their PCs and pop the disc into their DVD player in the living room. DivX DVDs can have at least four times the run-time--or the same length of film can have four times the resolution--of regular DVDs. (Windows Media isn't yet in a DVD player, but Microsoft scored a win this summer when The Terminator 2 DVD came out on two discs: one regular and one a high-definition version that can play on PCs using the Windows Media codec.)
In the battle to build a better codec, Microsoft would seem to have insuperable advantages. Its army of programmers has been developing codecs from scratch for almost a decade. The company spent $500 million researching and developing Windows Media 9. DivXnetworks, by contrast, has six codec writers and relies on licensing groups of patents. That can work, Greenhall insists. MPEG2 was a standard built on such a patent pool. The MPEG4 standard has been around since 1999, but by ensuring compatibility and adding antipiracy tools, DivX has become the leading MPEG4-based codec.
Today DivXnetworks makes about $2 for each DivX-branded DVD player that is sold. (Nineteen million DVD players were sold in the U.S. alone this year, and the company hopes to have its technology in a majority of the players within just a few years.) Greenhall also hopes to get a piece of every copy-protected DVD that Hollywood sells. Jack Valenti, the chief of the Motion Picture Association of America, has spoken well of the product, though no studio offers DivX-encoded DVDs just yet. The latest round of venture capital, closing soon, will likely value the company at just over $100 million.
As the battle with Microsoft rages, the two have pulled ahead of competitors, according to Yankee Group analyst Ryan Jones. He gives Microsoft the edge in terms of maximum compression. But DivXnetworks is ahead in keeping its chips simple, power-efficient and cheap. As for consumer support and the all-important ''momentum,'' Jones rates it a dead heat.
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AI
