Scott Berry

DivX Breaks Ground in Supporting Flash Video

Yes, this is correct. The Connected box is functionally not much more than a DivX codec paired with a WiFi card.

The server software on the PC converts everything (including photos and music, plus your stored video) into a DivX encoded stream which is sent to the client box. Because the PC does the heavy lifting, it's infinitely flexible and evolvable.

Brilliant idea, really, especially if they're successful in getting Connected embedded directly into TVs and DVRs.

Is DivX Just a Troubled Kid?

@Tom B: Good point, but "adapter" in this case is a $200-300 set top box, and it only works for a few. What about other countries? Other formats?

@rach: I'm a bull on the stock, even after the post-earnings runup. Only a $200M EV, with $100M top line and 95% gross margins? What's not to get?

Is DivX Just a Troubled Kid?

Yep. Saying H.264 is a standard is sort of like saying a three-pronged power plug is a standard. All well and good until you try to plug your American device into a (3-pronged) European outlet.

Not a perfect analogy, but I think it gets the point across.

Is DivX Just a Troubled Kid?

Tom B: no time to explain DivX bus model to you, but a few points:

1. H.264 will be in DivX soon, their H.264 implementation is already in Flash.
2. Betamax was better than VHS, so what. More DivX users worldwide than Mac users. How many non-Apple CE devices play back quicktime files? DivX aiming to be the .mp3 of video.
3. To understand their bus model go look at Dolby Labs (DLB).

Is DivX Just a Troubled Kid?

I just commented on Vreel this morning: scottjberry.com/2008/0.../

Is DivX Just a Troubled Kid?

I'm on record as suggesting Dolby is a perfect match as a buyer. But Microsoft is a definite possibility. As to the stock, if they don't disappoint over the next few quarters it should do quite nicely. I doubt they'd accept a bid anywhere near the current price.

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

Couple of points:

Greenhall isn't leaving, he's still Chairman of DivX (and owns tons of stock). Plenty of skin left in the game.

DivX is a cash cow, Stage 6 is a venture-stage internet outfit. Completely different cost structures and business models. Aside from the synergy with driving DivX adoption, why *should* they be in the same company? There's no guarantee S6 will succeed, so they owe it to shareholders not to burden them with the dice throw.

Suspect "spinout" means they get VC money, run Stage6 separately, but DivX shareholders still maintain some (though maybe not majority) ownership. This way they avoid the hassle of tryng to fairly value it to existing shareholders for a full spinout.

Nothing to stop DivX from tucking it back in once business model proves itself.