Circuit City SeeksMore Divx Backers
ere, which plans a national rollout of its new Divx technology in the fourth quarter, is seeking to find additional investors for the format, according to press reports.
One story quoted Rick Sharp, Circuit City's chairman and chief executive officer, as telling analysts that the company would re-evaluate the viability of the platform after the holidays.
Divx is short for Digital Video Express.
It is a limited-play variant of DVD technology.
Consumers buy movies on Divx discs for $4.49 and have 48 hours to view them after they have been put in a special player that costs about $100 more than a standard DVD machine, but which also will play standard DVDs.
Additional viewing time may be purchased for about $3, or a higher amount for decoding capability that will give the purchaser permanent ownership of the software.
Divx is now being tested in the San Francisco and Richmond, Va., markets.
Thus far, The Good Guys!, Hayward, Calif., is the only other retailer that has been involved in the test.
Ultimate Electronics, Denver, recently agreed to participate as well.
Most retailers involved in the traditional video trade see Divx as a threat to the development of DVD. The DVD format is regarded as a viable replacement technology for VHS, according to industry observers.
However, studios have said that they like the enhanced copy protection offered by Divx, and some in the industry see Divx as an incremental sales opportunity for supermarkets because of the low price point.
"The question is, how long does Circuit City persist with its strategy of trying to develop these other businesses and accepting a situation where the turnaround in consumer electronics isn't being recognized?" asked Peter Caruso, who is an analyst with Merrill Lynch & Co., New York, and was quoted in an article in the New York Times.
So far Circuit City has invested more than $100 million in Divx, according to reports.
Divx is a partnership between Circuit City and Los Angeles law firm Ziffren, Brittenham, Branca & Fischer.
Blockbuster Suits Selections to Stores
DALLAS -- Blockbuster Entertainment here is almost finished with a six-month program aimed at strengthening the core library of video titles in its stores, according to the company.
Called "Blockbuster Favorites," the program's goal is to tailor selection to individual stores according to demographics and past customer behavior.
Stores in the program get about 800 videos, 90% in new titles and 10% in replacement copies.
"The one-size-fits-all approach to stocking a video store simply doesn't work when you operate neighborhood-oriented businesses," said Joyce Woodward, vice president of retail merchandising.
"Each of our stores has a unique blend of customers with their own entertainment tastes. It's our job to anticipate those tastes and stock the movies that appeal to customers in a particular neighborhood," she said.
Of the 10,000 rental units in a typical Blockbuster store, about 7,000 are Blockbuster Favorites, said Allen Klose, vice president of market research.