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DivX Stage6 Traffic Explodes: Every Dream Has A Price

...and yet the stock is down 17%

Why DivX is Still a Great Long Term Growth Story

OK so DivX is on set-top boxes. Is this to decode streaming on-demand video or to play DivX-encoded DVDs/CDs?

I think people misunderstand DivX and its applications. I don't think it is a big an industry-changing technology. It has been around for many years now and the market hasn't expanded significantly. The biggest use is people taking DVDs and TV shows and putting them online using BitTorrent. DivX makes hardly anything from this because the people doing the encoding are often using hacked copies of the codec or even use the open-source alternative, XviD (oh look, it's DivX backwards). This is where DivX started and is STILL the biggest application: distributing pirated content.

We need to ask some fundamental questions. Why was DivX invented? When the internet started and bandwidth was a big issue, we needed a way to get high quality video. When DVD burners (and DVDs) were expensive we needed a way to get DVD rips on CDs. Guess what? A lot has changed. We can now burn dual-layer DVDs, eliminating the need for DivX compression in those cases. Internet speeds have increased dramatically and will continue to do so - you can now download DVDs instead of DivX-encoded video on download sites, which speaks to people's increasing desire to download the original high-quality (and format) copy.

Finally, all those flash videos on websites... people think DivX has a piece of that... it's small and likely to stay that way. Adobe has the biggest piece through their compression technology that is integrated with Flash.