DivX, LLC
| File:Divx-black-blue.svg | |
| Company type | Public (Nasdaq: DIVX) |
|---|---|
| Industry | Video Technology |
| Founded | 1999 |
| Headquarters | San Diego, California, USA |
Key people | Kevin Hell Jordan Greenhall Jerome "Gej" Vashisht-Rota |
| Revenue | $59.3 million USD (2006 calendar year)[1] |
Number of employees | 309 (July 31, 2007)[2] |
| Website | www.divx.com |
DivX, Inc. (formerly DivXNetworks, Inc.), based in San Diego, California, is the corporation behind the popular MPEG-4 codec, DivX. The company's codec has been downloaded over 240 million times since January 2003. DivX, Inc.'s offerings have expanded beyond the codec to include software for viewing and authoring DivX-encoded video. DivX, Inc. also certifies consumer electronics devices that are able to play and record DivX-compatible video. The company also operates a website known as Stage6 where the digital-video community can upload and view digital videos encoded using DivX. DivX, Inc. became publicly traded on the NASDAQ stock exchange after an initial public offering in September 2006.
History
The origin of DivX, Inc. begins with video engineer Jerome Rota (aka Gej), who made the original "DivX ;-)" codec available on his personal website after he had reverse-engineered the Microsoft MPEG-4 V3 codec. Gej was looking for a way to compress his portfolio so he could transmit it using the Audio Video Interlaced file format (AVI).[3] The codec became popular because it enabled reasonable quality video transmission over the internet (see DivX). Co-founder Jordan Greenhall, a former Mp3.com executive, learned of the codec from friends, and used it to download a copy of "The Matrix."[3] Greehall eventually got in touch with Gej through an underground Dutch hacker group after a multi-month search.[3] In early 2000, Greenhall put forward the idea of using the "DivX ;-)" codec to found a company. With co-founders Joe Bezdek, Darrius Thompson and Tay Nguyen, Greenhall and Gej created DivXNetworks, Inc. After coming under scrutiny for the original "DivX ;-)" codec, which was not a clean room design codec, DivXNetworks created a new codec.
Early on, DivXNetworks started Project Mayo, an open-source initiative. They developed the OpenDivX codec. Eventually, several Project Mayo collaborators left the DivX team when they became frustrated with the commitment of DivXNetworks to open-source projects. These members went on to help create the XviD codec.
DivX, Inc. incurred net losses from its creation through the second quarter of 2005.[2] The company was profitable for fiscal years 2005 and 2006.Cite error: A <ref> tag is missing the closing </ref> (see the help page).
Funding
In September 2000, Zone Ventures of Los Angeles, California, as well as Tim Draper and several other investors from the Draper Fisher Jurvetson family of funds provided the initial round of investment.
On June 4 2002, DivXNetworks received an additional $6 million. Zone Ventures was again one of the largest investors, deriving funds from the WI Harper group. Draper Atlantic and the Wasatach Venture Fund also invested, and Tim Draper made another personal investment. At the time, this put DivX's total equity financing at over $11.5 million.
In May 2004, DivX raised an additional round of $7 million, investors included Draper-affiliate Zone Ventures, WI Harper Group, Draper Atlantic, Wasatch Venture Fund, Springboard-Harper, Tim Draper, Cardinal Venture Capital, ALi Corporation, and Cyberlink International Technology Corp. In October 2005, the company announced closing a $17 million round from Insight Venture Partners.
DivX, Inc. raised over $108 million in its Sep. 27, 2006 IPO.[1]
Revenue Streams
DivX, Inc. licenses its technologies to manufacturers of consumer electronic devices. DivX, Inc. also licenses its technologies to to manufacturers of integrated circuits designed to be used in consumer electronic devices. For example, on September 12, 2007, DivX, Inc. announced a licensing agreement with Qualcomm that allows the chip manufacturer to include DivX, Inc.'s technology in its video-enabled chipsets.[4]
In addition to licensing, DivX, Inc. also certifies devices that can encode and/or play-back videos using the company's codec according to DivX, Inc.'s standards. The company has certified DVD players, digital televisions, digital cameras, portable video players, and portable video recorders. DivX,Inc.'s partners have shipped over 100 million certified consumer electric devices, representing over 2500 product models.[5]
Partners include LG Electronics, Philips Electronics, Samsung Electronics, Sony Electronics, Thomson, and Pentax.[5]
The licensing and certification agreements that DivX, Inc. strikes with its partners usually entitle DivX, Inc. to receive a per-unit royalty for every device shipped that incorporates DivX, Inc.'s technology and/or is certified by DivX, Inc. Approximately 75% of all royalties DivX, Inc. received are for products sold in countries outside of the United States,[2] as DivX-encoded video is more popular in certain regions outside of the United States than it is in the United States. Royalties resulting from licensing are approximately $1 to $2 per unit shipped.[6]
DivX, Inc. also receives revenue from Google whenever someone installs the Google Toolbar when downloading the DivX Player from the company's website.
Stage6
Stage 6 is a user-generated content site run by DivX, Inc. that is similar to YouTube but that allows for uploading and viewing of high-definition video. Anyone can upload a video to Stage6 and can make it available for viewing for free. All videos on Stage6 are playable on all consumer electronics devices that DivX has certified as being capable of playing DivX encoded video. Stage6 has contributed to divx.com recently becoming one of the top 200 most-visited websites according to the site Alexa.com.[7] Stage6 has received a "Very Good" rating from PC World Magazine.[8]
On July 24, 2007, DivX, Inc. announced that it intended to separate Stage6 into its own separate private company because Stage6's success has resulted in significant expenses that have impacted DivX, Inc.'s bottom line.[7]
On September 6, 2007, DivX, Inc. filed a declaratory judgment action in federal district court in San Diego against Universal Music Group, Inc.[9] In the lawsuit, DivX, Inc. seeks a declaration from the court that DivX Inc.'s operation of Stage6 falls within the safe harbor protection provided by the Digital Millenium Copyright Act for hosting websites against claims of copyright infringement.[9]
Awards
DivX, Inc. was ranked No. 1 in Entrepreneur Magazine's Hot 500 list for 2007.[10] DivXNetworks received awards in the AlwaysOn "100 Top Innovators" and the "Red Herring 100 Top Private Companies" in 2004. Jordan Greenhall was also featured in the BridgeGate "20 Awards 2002" list.
References
- ^ a b DivX, Inc. (March 29, 2007). "Form 10-K Annual Report". SEC. Retrieved September 9, 2007.
- ^ a b c DivX, Inc. (August 14, 2007). "Form 10-Q for Quarter Ending June 30, 2007". SEC. Retrieved September 9, 2007.
- ^ a b c Lisa M. Bowman (March 6, 2002). "DivX Creator Goes to Hollywood". CNET. Retrieved September 27, 2007.
- ^ "DivX Mobile Ecosystem Continues to Expand" (Press release). DivX, Inc. September 12, 2007. Retrieved September 22, 2007.
- ^ a b "DivX Reaches Major Milestone: Over 100 Million Certified Consumer Electronics Devices Shipped by Partners Worldwide" (Press release). DivX, Inc. August 13, 2007. Retrieved September 9, 2007.
- ^ Michael Kanellos (December 15, 2006). "DivX Watches HDTV as its Compression Technology Expands". ZDNet News. Retrieved September 27, 2007.
- ^ a b . "DivX Announces Plans to Maximize Value and Growth Potential of Core Businesses and Stage6.com" (Press release). DivX, Inc. July 24, 2007. Retrieved September 9, 2007.
- ^ . "DivX Stage6 Beta Review". PC World. August 21, 2007. Retrieved September 9, 2007.
- ^ a b . "DivX Requests Federal Court Affirmation of DMCA Protection for Stage6" (Press release). DivX, Inc. September 6, 2007. Retrieved September 9, 2007.
- ^ "Entrepreneur Magazine's Hot 500: the Fastest Growing Businesses in America". Entrepreneur Magazine. 2007. Retrieved September 27, 2007.