The makers of Divx, a rentable DVD
system, have announced that they will discontinue operations.
Digital Video Express LP, which is
partially owned by Circuit City stores Inc. said that while sales
of the systems were going well, "we have been unable to
obtain adequate support from studios and other retailers."
Circuit City will take a $114
million charge related to closing out the business. The company
posted a first quarter loss of $88.8 million, Wednesday.
A concept before its time?
Circuit City Group, the publicly traded electronics division,
topped analysts' forecasts of 25 cents a share with profits of
$39.3 million or 41 cents a share on a 15 percent increase in
sales to $2.2 billion. The Richmond, Va.-based company reported a
loss of $88.8 million or 87 cents a diluted share.
Officials said consumers who
purchased Divx-enhanced players before June 16 will be eligible
for a $100 rebate and said that all Divx discs can be viewed
between now and June 30, 2001.
Digital video players, which the
company began selling in September, allowed users to view movies
on encrypted discs for up to two days. Users were allowed to keep
the discs and purchase additional viewings or convert the discs to
unlimited play through the Divx-enhanced player.
Circuit City said today that in
addition to the rebates, it would cut prices on Divx-enhanced
players, and extend the return policy for players purchased before