Davis Freeberg

DivX Considers A Profitable Break-Up, But Are There Any Long Term Benefits?

Good question Richard and perhaps I was clear enough in how I think they should implement their ad strategy. I don't think that Stage6 should be selling ads to viewers (well they should, but that's the smaller opportunity) They should instead be approaching sites like Forbes, BetaNews, DivX fan forums, Etc. and offering to pay them higher CPM to carry high quality video ads. Either way Take Two (or whoever) would have to pay to get the eyeball, but right now they are paying to run the ad on the flash platform instead of DivX. There still aren't a lot of video ads out there, but as this part of the market grows, I think it will present a great opportunity to innovative companies.