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DivX, DVD Battle Brings A Definite Winner

ddbbThe good news about DVD is that, like the atomic what-sit that Ralph Meeker can’t contain in the 1955 Robert Aldrich film of Mickey Spillane’s Kiss Me Deadly, DVD’s future range of applications won’t be contained. NO, not by the digital straitjacket in which the Hollywood studios and consumer electronics manufacturers have been trying to bind it. Or maybe not. As a business, DVD may indeed remain lashed to its movie-centric control model, and even more so in the Divx model, with its movie-as-rental object strategy. Is Divx ready to pile DVD with the roadside detritus that is heaped atop the other failed formats of yore: Betamax, quadraphonic stereo, and eight-track cassettes? Divx may indeed drive DVD to its Hollywood-scripted epitaph, if the Divx-supporting movie studios realize their wish to maintain real ownership of the movie on the disc through a disc/online connection that is both transparent to the user and subtly oppressive.

Divx (Digital Video Express)–the pay-per-view movie distribution system proposed by a partnership that includes principals from Circuit City stores and the Los Angeles law firm of Ziffren, Brittenham, Branca, & Fischer–promotes a triple DES-encrypted DVD disc as a replacement for VHS video rentals. The disc allows a 48-hour viewing period and then requires a modem-assisted credit transaction to enable further viewings. Additional time can be purchased until a ceiling price is reached, at which point the movie will belong to the purchaser.

Or rather the purchaser’s player. Paying the purchase price means only that the title can be viewed ad nauseam on the purchaser’s registered player. Divx is decrypted to a user’s account which must be periodically verified for repeated viewings. But even at full price, from what is known of the Divx system to date, playing the disc is always dependent on a continuous account with Digital Video Express.

It’s revealing that Divx is foregoing the Web for its initial rollout of modem-connected players for encrypted DVD movies. The existence of Web-connected CD-ROM has become an accepted and expected enhancement of both Net bandwidth and stored libraries of software and documentation. A good example of this is Microsoft’s Internet Explorer 4.0 Preview disc, which is a MarketScape-powered WebCD that contains the browser installation files along with its component accessory programs, documentation, Internet Information Server 4.0, Windows NT 4.0 Service Pack 3, a complete tutorial, and Microsoft’s Internet SDK. This disc is a valuable archive for users–one that serves Microsoft by delivering interested parties to their Web site for sales, updated information, and software. Other HTML or PDF-formatted CD-ROM titles have also brought users to the Web and form the basis of a healthy library.

DIVX’S GREAT DARK EARS

In Divx, we see an unhealthy coupling of disc and modem that gets its initial real-world boost from the Disney movie companies. That’s the same Disney that brought us Mickey Mouse, the senior rodent minstrel of the Depression, who was always an affable and noncontroversial Everymouse, and whose wide-eyed smile greeted movie and television audiences for over 60 years. But Mickey has always been a blank slate–ripe for inference. His ears are more architecture and calligraphy than character: the architecture of Mickey’s ears is what the artist Claes Oldenburg extruded into his Maus Haus.

Divx, with its pay-as-you-go movie distribution that makes it seem like DVD for the masses, wears great dark ears of its own, trained on every potential viewer of encrypted Disney fare. Divx, apart from being a distribution technology for movies, is a marketing coup. If successful, Digital Video Express will be a premier port-of-call for marketers and demographers in determining both macro and micro trends in entertainment.

Any Divx-served household will have a library of films tracked in its account that will be associated with the account holder no matter who actually watches any given title. Of course the number of viewings will be tabulated along with the tally for repeated viewing of specific scenes, which is exactly what Hollywood most wants to know: how to craft future content to get the most bang for the buck, with every Divx renter a passive focus group participant. A few too many NC-17 titles show up in the rental records of a presidential Cabinet hopeful and it’s a good bet that the Senate confirmation hearings may become even more horrifyingly entertaining. In fact, looking at these records, almost any inference could be made by dueling spouses in a child custody battle. Ready to re-think that Divx player purchase now?

IT’S A SMALL WORLD: AFTER ALL?

While the business sections of the leading news dailies are reporting the running battles between the “traditional” DVD-Video-for-sale forces (such as Warner Home Video) and Divx’s perpetual leasing arrangement, the Christmas 1997 sales outlook might not be the most significant issue.

Might solid support for DVD-ROM, combined with meager sales of DVD-Video, inspire Digital Video Express to explore Divx-ROM in the near future? This could open up content other than movies to Divx’s pay-per-access. The basic Divx model bears even closer scrutiny under these circumstances.

Divx, as a plan, is optimized for the moment with little regard to the future. While Divx may allow a five-dollar title to be viewed for 48 hours now, there is no guarantee that they will continue their planned access options next year. When multiplied across an entire library of discs, this plan requires a great deal of faith on the part of the purchaser. The Divx plan begs potential customers to believe that Digital Video Express will always be in business, supporting and decrypting their purchased discs. With no manifest track record, Divx is a risky horse on which to bet. These titles are leased not from, say Disney itself, but a paper company that might be ripe for sale, acquisition, or merger. What guarantee comes with any Divx title beyond a possible future class action suit?

And Divx, while disc-based now, may have no special allegiance to optical disc when a better vehicle comes along like satellite, cable, or fiber-optic connections and the account license can be put on a smart card or a chip. In this arena, Divx will face stiff competition from companies such as IBM and Wave Systems, Inc. of Lee, Massachusetts. These other options just might prove less invasive to users’ privacy, with anonymous keys that open the doors to content without tracking who goes where and when, and with content that can be unlocked one time without regard to the billing status between one customer and one company.

Both DVD and Divx could learn a thing or two from traditional publishing. Most published media, be it a book or audio CD, are accessible to anyone around the world–no matter who originally bought or sold it. The Internet and digital revolution don’t really change this other than reducing the cost of publishing enormously. People who would be satisfied with worn tomes that have reduced aftermarket value will shop in used book stores. In the digital age, replace “worn” with “unreliable.” The big advantage of CD or DVD is that it is a reliable, indelible archive one that, when obtained from the original source or channel, should be both valuable and trusted. By trying to transform a sale into a lease, Divx jeopardizes both the sale and the stability of the object.

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