DivX: Shut Down of Stage6 Portal Is for the Best

| About: DivX, Inc. (DIVX)

Yesterday DivX (DIVX) announced that it would be shutting down the Stage6 video portal effective this Thursday. DivX originally planned to spin off Stage6 as a separate company late last year, but then announced in December that it was looking for strategic alternatives instead.

I'm never pleased to see any service or video portal have to close but this is the best thing DivX could be doing. Operating a portal was not their core business and the last thing we need right now as an industry, or as consumers, is more video portals. Stage6 never got any real traction in the industry, was not a service I heard others discussing and had very little in the way of usage by content owners.

From the get go the service was destined to fail as DivX was using the site to showcase their own technology. The problem being that if the only way you can try to showcase adoption of your technology by content owners is by running your own website, it won't work.

The shut down notice on the Stage6 website says the service was started "with the mission of empowering content creators and viewers to discover a new kind of video experience." I'm not sure what that "new kind of video experience" was they are referencing but I think too many companies in the industry think that just because they encode video at high bit rates or large window sizes, they will be successful. You have to do more today than just deliver video that looks good, you have to have a business model behind it and there needs to be a demand for the service.

A high-quality, high-bit rate, large window sized video content offering does not equal success by itself.