LG Electronics Signs On for DivX TV

DivX TV is embedded through a firmware update to the Broadcom processor in the case of an LG Blu-ray player, Grab said. It will appear in LG’s NetCast service, which also includes Netflix and Vudu, company officials said. LG, which is among DivX’s top customers, also will install the platform in TVs and home-theater systems, Grab said. The products are expected to ship this year but the prices aren’t set, he said.

DivX TV represents a major step for a company that struggled to gain acceptance of its first-generation “Connected” products: a Hauppauge Digital device and D-Link DSM-330 media player as well as the Stage6 video service that was scrapped in 2008. D-Link is discontinuing DSM-330 two years after shipping the first Connected product, a DivX spokeswoman said. At the launch, DivX executives predicted Connected devices would emerge from several OEMs (WID Nov 7/07 p10). The new platform stems from DivX’s August acquisition of AnySource, which developed software to deliver Web-based video to TVs. DivX TV is the third leg in the company’s platform strategy, joining DivX Home Theater and DivX Plus, Grab said. The earlier two will remain available separately, but DivX TV provides access to all of them, he said.

“The idea is to give consumers access in front of the screen instead of having them go to different boxes and go to the computer to download files,” Grab said. “This is an evolution of Connected, because that was PC-mediated and that model worked, but it just wasn’t necessarily seen as consumer-ready. With this, there is no PC needed -- just plug in the Internet."

The DivX TV is designed to connect to content providers web sites and fully display them, including banner ads, on half a TV screen, company officials said. The other half is a dedicated DivX space that displays free channels including the Associated Press, CBS, Break.com, CNET, DailyMotion, Pandora, Picasa, Revision3, Rhapsody and others. The channels are listed by topic, including news and info, entertainment, science and technology, sports. Revision3 was among the content providers for the original Connected platform which also had agreements with Flickr, Google Maps and Dilbert Cartoons. The streaming is done using Adobe’s Flash Player, which DivX licensed in 2008 to make it compatible with H.264 compression technology. DivX gained a foothold in H.264 by buying MainConcepts.

“The right half of the screen is owned by the content supplier which provides their content, text and ads,” Grab said. “On the left side is where we can start making money on our own ads, featured placements, pay-per-view video” foreign-language subscription channels.

Premium film download services from CinemaNow, which rents and sells movies, and FilmFresh.com also will be available, company officials said. CinemaNow was running in a demo at CES, but FilmFresh, which has library of about 1,000 titles, hasn’t been implemented yet, company officials said. Users will be able to rent CinemaNow movies, typically for $3.99 daily, or link to their CinemaNow account, company officials said. The movies can be bought directly from DivX TV, company officials said. DivX will get a share of the ad revenue and movie sales, company officials said. It also gets royalties on sales of CE products. The deal with CinemaNow will likely provide access to DivX-based movies including those expected to be available under multi-year agreements with Lionsgate, Paramount, Sony Pictures and Warner Brothers, company officials said. Warner Brothers in France launched a download service for DivX movies in April and has been packaging titles with Blu-ray movies. Paramount Direct in the U.K. also is selling a USB drive loaded with a DivX-based Star Trek movie that can be plugged into a TV for playback, Grab said.

“This is a streaming platform and it really expands the possibility for subscriptions and opens up the model that we can offer” CinemaNow and others, DivX spokesman Tom Huntington said.

DivX is trying to make the new platform “smart” so it can “sense” bandwidth available and deliver content accordingly, Grab said. HD video typically requires 4-10 Mbps, whereas SD needs 1-2 Mbps, he said. “We want to make the platform smart, so if you don’t have a good Internet connection it’s not going to offer you something that can’t be played,” Grab said.

DivX has no immediate plans to take DivX TV to Europe, but “it makes a lot of sense,” Grab said. DivX has download agreements with ERG (Belgium and the Netherlands), FilmOn.com (U.K.) and Play4Film (Italy), in addition to Warner Bros. Among DivX’s long-time licensees is Philips, which has a major presence in Europe and offers a DivX Plus-certified Blu-ray player. Other licensees include Iomega, Samsung, Sony, Toshiba and Viewsonic. Samsung and Iomega have a DivX Plus Blu-ray player and network area storage device. Samsung and Philips are near the end of two-year licensing deals with DivX.

“For us, royalties for consumer electronics is really core, but the exciting opportunity is growing our business around transactional content and advertising,” Grab said. “Advertising money is going to be shifting more and more to the Internet and that’s why we're in there.”