DivX lands two more Hollywood studios

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Continuing its slow march to acceptance in Hollywood, DivX Inc. has persuaded two more studios -- Paramount and Lionsgate -- to use its compression and antipiracy technologies on the movies they make available for downloading. The deals announced this morning aren’t exclusive, so the studios will continue to support other companies’ codecs and DRMs as well. DivX has two other nonexclusive deals with major Hollywood studios -- it revealed alliances with Sony Pictures in January 2008 and Warner Bros. in October. At its current pace, it should have another deal or two to announce in June 2010.

I’m not criticizing DivX. The studios are the ones moving at a snail’s pace. They should have embraced DivX’s technology years ago, as some independent film outlets did.

The company’s domain-based DRM has long been more user-friendly than most antipiracy systems, making it easy for people to move downloaded content to DVD players, set-top boxes, TV sets and mobile phones. The only requirements are that the devices be equipped with DivX software and registered electronically to a DivX account. Nevertheless, the studios have clung to demand-dissipating systems that made people buy special set-top boxes or new DVD burners in order to watch downloaded movies on a screen not connected to their computer. Some studio executives argued that DivX’s DRM wasn’t secure enough (the company responded by capping the number of authorized devices per account at six), but DivX was also hurt by its association with online piracy -- its file format was the codec of choice for illegal downloaders. Another drawback has been the limited installed base of devices equipped with the software needed to unlock DivX’s DRM -- for example, PlayStation 3s have it, but iPods don’t. And because it doesn’t inter-operate with anyone else’s electronic locks, the DivX system represents another source of compatibility problems for consumers who own a hodgepodge of electronic gadgetry. The roster of DivX-compatible devices is expanding rapidly, however; the company estimates that 200 million such gadgets are already in homes around the world, about twice as many as there were when it announced its deal with Sony Pictures.

The company’s deals with Hollywood haven’t enabled U.S. consumers to download films in the DivX format yet, but that should change soon. Three European movie sites -- ERG, FilmOn.com and Play4Film -- have agreed to sell the studios’ movies in the DivX format, and Warner Bros. does so already on its site in France. And DivX CEO Kevin Hell said in an interview Monday that a similar deal would be announced with a U.S. movie download site within weeks. These sites will initially offer movies only on a download-to-own basis, but Hell said the company’s deals with the four studios don’t preclude eventually offering downloadable rentals. Buyers (and later, renters) will be able to transfer their movies onto DVDs, USB drives and microSD cards and play them in any compatible device. That may not be as slick as Apple’s automatic hand-offs from iTunes to iPods and Apple TVs, but DivX’s system is supported by more manufacturers and more devices.

Embracing DivX is just an incremental step toward Hollywood giving online distribution parity with DVDs. Most studios still don’t make movies available for rent online until well after the DVD version is released, and relatively few titles are available to buy or rent in high definition. The easier it becomes for people to watch online content on their living-room TV, however, the harder it will be for the studios to continue treating the Web like a second-class outlet. In addition to its DVD-burning and USB drive technology, DivX has been working to bridge the PC-to-TV gap through streaming. Its initial attempt -- the DivX Connected set-top box -- hasn’t caught on, so Hell said the company has gone back to the drawing board. It is developing a software platform for Internet-connected consumer electronics that will enable people to stream movies from the Net to their TV sets. DivX has strong relationships with the largest manufacturers, but it’s hardly the only company in the field -- Widevine and Rovi (formerly Macrovision) are rolling out competing software platforms, and Yahoo, Vudu, Sezmi and ZillionTV all have ambitions to bring online video-on-demand into the living room. The number of players reflects how eager the technology and consumer-electronics industries are to bring online content to screens around the home. The public is keen on the idea too. In the second quarter of this year alone, U.S. consumers spent more than $1 billion on Internet-enabled TV sets, buying almost twice as many as they did in the first three months of 2009, Quixel Research reported today. In other words, the pipeline from the Net to the TV set is rapidly being built, with or without Hollywood’s support.

-- Jon Healey

Healey writes editorials for The Times’ Opinion Manufacturing Division.