DIVX (Digital Video Express) was an unsuccessful attempt by Circuit City and the entertainment law firm Ziffren, Brittenham, Branca and Fischer to create an alternative to video rental in the United States.

DIVX was a rental format variation on the DVD player in which a customer would buy a DIVX disc (similar to a DVD) for approximately US$4.50, which was watchable for up to 48 hours from its initial viewing. After this period, the disc could be viewed by paying a continuation fee to play it for two more days. Viewers who wanted to watch a disc an unlimited number of times could convert the disc to a "DIVX silver" disc for an additional fee. ^[34]"DIVX gold" discs that could be played an unlimited number of times on any DIVX player were announced at the time of DIVX's introduction, but no DIVX gold titles were ever released.

Each DIVX disc was marked with a unique barcode in the burst cutting area that could be read by the player, and used to track the discs. The status of the discs was monitored through an account over a phone line. DIVX player owners had to set up an account with DIVX to which additional viewing fees could be charged. The player would call an account server over the phone line to charge for viewing fees similar to the way DirecTV and Dish Network satellite systems handle pay-per-view.

In addition to the normal Content Scramble System (CSS) encryption, DIVX discs used Triple DES encryption and an alternative channel modulation coding scheme, which prevented them from being read in standard DVD players.

DIVX players manufactured by Zenith Electronics, Thomson Consumer Electronics (RCA and ProScan), and Matsushita Electric (Panasonic) started to become available in mid-1998. Because of widespread studio support, manufacturers anticipated that demand for the units would be high. Initially, the players were approximately twice as expensive as standard DVD players, but price reductions occurred within months of release, due to economies of scale.

The initial trial of the DIVX format was run in the San Francisco and Richmond, California, areas starting on June 8, 1998. Initially only a single Zenith player was available, along with 19 titles. A nationwide rollout began three months later, on September 25, with players and 150 titles available in 190 stores. In total 87,000 players were sold during 1998, with 535,000 discs across 300 titles being sold.

DIVX was sold primarily through the Circuit City, Good Guys, Ultimate Electronics, and Future Shop retailers. The format was promoted to consumers as an alternative to traditional video rental schemes with the promise of "No returns, no late fees." Though consumers could just discard a DIVX disc after the initial viewing period, several DIVX retailers maintained DIVX recycling bins on their premises.

By March 1999, around 419 titles were available in the DIVX format.

A movement on the Internet was initiated against DIVX, particularly in home theater forums.

The DIVX catalog of titles was released primarily in pan and scan format with limited special features, usually only a trailer. This caused many home theater enthusiasts to become concerned that the success of DIVX would significantly diminish the release of films on the DVD format in the films' original aspect ratios and with supplementary material. Many people in various technology and entertainment communities were afraid that there would be DIVX exclusive releases, and that the then-fledgling DVD format would suffer as a result. DreamWorks, 20th Century Fox, and Paramount Pictures, for instance, initially released their films exclusively on the DIVX format. ^[40] DIVX featured stronger encryption technology than DVD (Triple DES), which many studios stated was a contributing factor in the decision to support DIVX first. ^[44]

In addition to the hostile Internet response, competitors such as Hollywood Video ran advertisements touting the benefits of "Open DVD" over DIVX, with one ad in the Los Angeles Times depicting a hand holding a telephone line with the caption, "Don't let anyone feed you the line." The terminology "Open DVD" had been used by DVD supporters in response to DIVX's labeling of DVD as "Basic DVD" and DIVX/DVD players as "DIVX-enhanced."

Informational freedom advocates were concerned that the players' "dial-home" ability could be used to spy on people's watching habits.

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Allegations of anti-competitive vaporware, as well as concerns within the software industry prompted David Dranove of Northwestern University and Neil Gandal of Tel Aviv University and University of California, Berkeley, to conduct an empirical study designed to measure the effect of the DIVX announcement on the DVD market. This study suggests that the DIVX announcement slowed the adoption of DVD technology. According to Dranove and Gandal, the study suggests that the "general antitrust concern about vaporware seems justified." ^[46]

The format was discontinued on June 16, 1999, because of the costs of introducing the format, as well as its very limited acceptance by the general public.

It was shot down by Blockbuster Video stores not wanting to carry it. Also Circuit City announced a $114 million after-tax loss, ^[48] and Variety estimated the total loss on the scheme was around $337 million. Over the next two years the DIVX system was phased out. Customers could still view all their DIVX discs and were given a $100 refund for every player that was purchased before June 16, 1999. All discs that were unsold at the end of the summer of 1999 were destroyed. The program officially cut off access to accounts on July 7, 2001. The player's Security Module, which had an internal Real-Time Clock, ceased to allow DIVX functions after 30 days without a connection to the central system. Unsold players were liquidated in online auctions, but not before being modified to remove the DIVX Security Module. As a result, certain player models demonstrated lockups when DIVX menus were accessed.

On the company website to announce discontinuation of the product on June 16, 1999, it stated: "All DIVX-featured DVD players are fully functional DVD players and will continue to operate as such.

All DIVX discs, including those previously purchased by consumers and those remaining in retailer inventories, can be viewed on registered players anytime between now and June 30, 2001.

Subsequent viewings also will be available during that period.

Discs can no longer be upgraded to unlimited viewing, known as DIVX Silver.

Customers who have converted discs to DIVX Silver can continue viewing the discs until June 30, 2001, or can receive a full refund of the conversion price at their request".

This meant no DIVX discs could play any content after June 30, 2001, rendering the medium worthless.

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DIVX appeared as a "dishonorable mention" alongside *PC World *'s list of "25 Worst Tech Products of All Time" in 2006. ^[48]