Video Group Snubs Divx, Supports DVD

Welcome Guest. | Log In| Register | Membership Benefits

December 01, 1998 (9:35 AM EST)

By Andy Patrizio,

With visions of digital toys dancing in the heads of both children and adults, the Video Software Dealer's Association (VSDA) has come out with a stinging rebuke of Divx and called for better studio support for DVD.

In an open letter aimed at the video-rental market, VSDA chairman Mark Vrieling and president Jeffrey P. Eves list a number of competitors to the video-rental market, including direct broadcast satellite (DBS), expanded digital cable, video-on-demand, and even the Internet.

But Divx, the pay-per-view video format championed by retailer Circuit City, is singled out for particularly harsh criticism.

"Many believe that Divx, with its poor retailer margins, intrusive technology, and inferior viewing options is doomed to failure," Vrieling and Eves wrote. "Maybe so. But it would be foolish to ignore any threat to our business."

The VSDA's position left Digital Video Express, the company Circuit City founded to develop the Divx format, confused. "We don't understand why they view Divx as a threat more than they view pay-per-view or video-on-demand as a threat," said Josh Dare, a Digital Video Express spokesman.

To combat Divx, the VSDA recommended that rental outlets commit to DVD rental, and pressure movie studios to release their movies on DVD simultaneously with the VHS release. The latter has become a major sore spot with DVD owners, since a growing number of Divx titles are getting concurrent release with VHS, while DVD title availability lags by as much as three months .

But the real issue, Dare said, is returns, not availability. VSDA research shows that 38 percent of video watchers feel returning the tape is the greatest hassle in renting movies.

"If the rental market was going to compete with pay-per-view and video-on-demand, they needed a better way to deal with the return issue," said Dare. "And what better way to handle that than with a product you never have to return?"