DivX, Inc.
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| DivX, Inc. | |
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| Type | Public (NASDAQ: DIVX) |
| Founded | 1999 |
| Headquarters | San Diego, California, USA |
| Key people | Kevin Hell Jordan Greenhall Jerome "Gej" Vashisht-Rota |
| Industry | Video Technology |
| Revenue | $59.3 million USD (2006 calendar year)[1] |
| 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. DivX, Inc. became publicly traded on the NASDAQ stock exchange after an initial public offering in September 2006.
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[edit] 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.[2]
[edit] Revenue streams
DivX, Inc. licenses its technologies to manufacturers of consumer electronic devices. DivX, Inc. also licenses its technologies 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]
Prior to November 2007, DivX, Inc. also received revenue from Google by providing the option to download the Google Toolbar when downloading the DivX Player from the company's website. In November 2007, DivX, Inc.'s contract with Google expired, and the company started distributing a co-branded version of the Yahoo! Toolbar and a version of Internet Explorer 7 that is pre-configured with Yahoo tools.[7] It remains to be seen whether DivX Inc.'s contract with Yahoo! will be as lucrative as its former arrangement with Google.
[edit] 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.[8] Stage6 has received a "Very Good" rating from PC World Magazine.[9]
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.[8]
On September 6, 2007, DivX, Inc. filed a declaratory judgment action in federal district court in San Diego against Universal Music Group, Inc.[10] 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 Millennium Copyright Act for hosting websites against claims of copyright infringement.[10]
On February 25, 2008, an official press release by DivX stated the Stage6 service would cease operation on February 28 2008 [11].
[edit] Acquisitions and investments
In August 2007, DivX, Inc. announced that it had acquired the assets of Veatros, LLC, a Lawrence, Kansas-based company.[12] Veatros developed video processing technology at the University of Kansas' Information and Telecommunication Technology Center.[13] The technology can be used for video search and discovery. The deal was for $2 million in cash plus an additional $2.5 million upon completion of certain technology-related milestones.[14]
In November 2007, DivX, Inc. purchased Aachen, Germany based MainConcept AG.[15] DivX, Inc. paid $22 million for the company, and will pay up to additional $6 million upon the completion of certain milestones in 2008.[16] MainConcept developed and distributes one of the most popular codecs using the H.264 standard.
[edit] Awards
In October 2007, DivX, Inc. was ranked the fifth fastest growing technology company in the San Diego region according to Deloitte & Touche USA LLP.[17]
DivX, Inc. was ranked No. 1 in Entrepreneur Magazine's Hot 500 list for 2007.[18]
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.
[edit] Initial 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]
[edit] References
- ^ a b DivX, Inc. (March 29, 2007). Form 10-K Annual Report. SEC. Retrieved on 2007-09-09.
- ^ a b c d DivX, Inc. (August 14, 2007). Form 10-Q for Quarter Ending June 30, 2007. SEC. Retrieved on 2007-09-09.
- ^ a b c Lisa M. Bowman (March 6, 2002). DivX Creator Goes to Hollywood. CNET. Retrieved on 2007-09-27.
- ^ DivX, Inc. (September 12, 2007). "DivX Mobile Ecosystem Continues to Expand". Press release. Retrieved on 2007-09-22.
- ^ a b DivX, Inc. (August 13, 2007). "DivX Reaches Major Milestone: Over 100 Million Certified Consumer Electronics Devices Shipped by Partners Worldwide". Press release. Retrieved on 2007-09-09.
- ^ Michael Kanellos (December 15, 2006). DivX Watches HDTV as its Compression Technology Expands. ZDNet News. Retrieved on 2007-09-27.
- ^ Michael Garrett (September 28, 2007). Google Replaces Google Partnership With . . . Yahoo?. Profy.com. Retrieved on 2007-11-10.
- ^ a b . DivX, Inc. (July 24, 2007). "DivX Announces Plans to Maximize Value and Growth Potential of Core Businesses and Stage6.com". Press release. Retrieved on 2007-09-09.
- ^ . DivX Stage6 Beta Review. PC World (August 21, 2007). Retrieved on 2007-09-09.
- ^ a b . DivX, Inc. (September 6, 2007). "DivX Requests Federal Court Affirmation of DMCA Protection for Stage6". Press release. Retrieved on 2007-09-09.
- ^ DivX.com: DivX Video Player & DivX Video Codec
- ^ DivX, Inc. (August 22, 2007). "DivX Acquires Technology for Enhanced Video Search and Discovery Services". Press release. Retrieved on 2007-11-18.
- ^ Technology Developed at KU Acquired by Digital Media Company. digitalmediawire (August 23, 2007). Retrieved on 2007-11-18.
- ^ Mark Hefflinger (October 9, 2007). DivX Acquires Video Digital Processing Firm Veatros. University of Kansas. Retrieved on 2007-11-18.
- ^ Om Malik (November 16, 2007). DivX Bets Big on H.264, Buys MainConcept. NewTeeVee.com. Retrieved on 2008-01-04.
- ^ DivX Acquires MainConcept AG, Leading Provider of H.264 Technology. DivX, Inc. (November 14, 2007). Retrieved on 2008-01-04.
- ^ DivX, Inc. (October 31, 2007). "DivX Named One of the Fastest Growing Technology Companies in the San Diego Region". Press release. Retrieved on 2007-11-10.
- ^ Entrepreneur Magazine's Hot 500: the Fastest Growing Businesses in America. Entrepreneur Magazine (2007). Retrieved on 2007-09-27.
