Divx Rollout Starts Early

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September 20, 1998 (5:25 AM EDT)

By Andy Patrizio,

Competing digital-video formats Divx and DVD both made strides this week, as Divx moved beyond its test markets and DVD gained an important new supporter.

Divx, the pay-per-view version of DVD developed by retailer Circuit City, has been for sale in San Francisco and Richmond, Va., in a test program since July. The national rollout was supposed to happen this month, but was pushed back until players are available from more than one retailer.

But only one Divx player is available, from struggling Zenith Electronics, which recently declared bankruptcy. Divx's backers are now waiting for Thomson Consumer Electronics to release its RCA Divx player before the national rollout, according to Josh Dare, a Divx spokesman.

The Good Guys, a regional retailer with stories in four western states, is the only ally Circuit City has been able to secure. The Good Guys said it decided not to wait until the national rollout, which will begin in the first week of October, according to Dare, and began selling the Divx player in its California stores last week.

One analyst who follows home-theater technology thinks The Good Guys decision will help boost Divx, which hasn't been an easy sell.

"When you have a product like this, you need to spend a certain amount of time training people," said Gary Schultz of Multimedia Research Group in Sunnyvale, Calif.

In the meantime, DVD is busy racking up supporters. The last major holdout, director Steven Spielberg and his Amblin Entertainment studio, has decided to end its DVD ban by letting Columbia Pictures release The Mask of Zorro. Columbia distributed the movie and is a huge supporter of DVD.

Amblin angered DVD fans when it prevented Columbia from releasing Men in Black on DVD last November. Although Spielberg isn't going to release all of its titles, it is willing to test the market.

"If we are going to dip our foot in the DVD water, this is a good title to do it with," said Marvin Levy, a spokesman for Amblin. Future DVD releases will be on a case-by-case basis, said Levy.