The Divx system, which failed in the marketplace, allowed consumers to buy special encrypted movie discs for about the price of a VHS rental. The purchase included a two-day viewing period that began, not when consumers left the store, but only when they inserted the disc into a Divx player and pressed play. That could be on the day the disc was purchased or weeks or months later. Discs could be paused, stopped and played multiple times during the viewing period. Divx-enhanced DVD players play all basic DVD discs, but the lower-cost Divx discs cannot be played on DVD players without the Divx feature.
The consumer owned the discs and never needed to return them, eliminating all late fees. Additional viewing periods -- including an option to purchase unlimited play (on virtually all titles) -- could be purchased through the Divx player. Divx allowed consumers to build a convenient, economical home video library, but Divx discs could be traded with or given away to friends or relatives.
Soon after hooking up their players, Divx customers establishrd an account with Divx. Through this account, consumers were billed for the purchase of any subsequent viewing periods or for converting a disc to unlimited play. The player plugged into a standard phone jack and made a 30-second, toll-free call about once a month, usually in the middle of the night, to send billing information. The phone line was not used during the playing of the movie, and a separate phone line was not required. The player never interfered with a consumer's use of the phone.
There were three types of Divx discs: 1) the "rental" discs, sold at retail for a suggested price of about $4.50 (the disc included a two-day viewing period); 2) DivxSilver discs, which started as "rental" discs but were later converted for a one-time-fee by the disc owner to unlimited play on players registered to his or her account; and 3) DivxGold discs, which were purchased much like a basic DVD at retail. DivxGold discs could be played an unlimited number of times without charge on any Divx player.