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page updated: 9/3/98

Divx DVD News -
Digital Video Express

The following is an article on Divx's latest financial woes, that appeared in the 9/2 issue of The Hollywood Reporter:

Search for Divx backer keeps Circuit City busy

(Wed., Sept. 2, 1998)

By Scott Hettrick

Circuit City faces a $45 million drain on second-half earnings if it cannot arrange outside financing to defray the cost of Divx, a fledgling, pay-per-play DVD format.

During a conference call with analysts this week, Circuit City chairman and CEO Rick Sharp said the company will re-evaluate prospects for the platform and determine its viability after the holiday season.

Sharp said Circuit City continues to hold discussions with potential investors in Digital Video Express, the year-old partnership between Circuit City Stores Inc. and L.A. entertainment law firm Ziffren, Brittenham, Branca & Fischer that produces Divx. The partnership had hoped to announce financing partners this week.

With $8 billion in overall annual revenue, Circuit City has spent more than $100 million on Divx. Sharp expects to spend $60 million on marketing, salaries and continued development of the platform.

Talks to bring in a financing partner do not look promising at this stage, Sharp said, noting that he expects to face a 45-cent per-share reduction on earnings for the third and fourth quarters of 1998 as a result of Divx-related expenses, as opposed to a 12-cent per-share reduction with financial partners lined up. Circuit City has about 1 million shares outstanding.

Sharp said Circuit City continues to be encouraged about prospects for Divx and its "extraordinary, attractive returns for shareholders" and hopes to roll out systems nationally "toward the end of September."

About 200 titles have been authored in the format, with about 150 expected to be ready at launch. Manufacturing delays have stalled Divx's introduction since June.

Circuit City initially projected first-year sales of 200,000-250,000 Divx units. Zenith is the only hardware manufacturer lined up so far, with initial devices expected to be priced at $499.

Sharp said most technical hurdles have been overcome and that replication and production should move much more quickly now.

Divx utilizes the same fundamental technology as DVD but forces viewers to pay a fee each time they play the movie encoded on a disc. A signal delivered through telephone lines bills a credit card and unlocks the movie. Each disc will cost about $4.50 and allow one play during a 48-hour period.


Here's a story from Daily Variety on yet another delay for Divx:

Divx Delayed Again

Daily Variety - 5/27/98


The launch of Divx, the alternate digital videodisc rental format backed by the Circuit City electronic retail chain, has been delayed approximately a week, until June 8, due to quality-control problems with several of the movie titles, according to sources within the format's maker, Digital Video Express.

"We're not going to have the level of software that we had hoped, and for that reason we made the decision to wait an extra week," said the Divx spokesman. "We did not anticipate that our quality-control requirements would ... delay the launch, but they have."

Problems involved the playback of the discs and other unspecified quality-control issues, said Divx sources.

Manufacture of the Divx-enabled DVD players - which would also play ordinary DVDs - has not been delayed, according to Divx.

The rescheduled June 8 release will still be restricted to the test markets of Richmond, Va., and San Francisco, as originally planned. Divx hopes to field approximately 25 movie titles in its digital disc format by the start date, with the number increasing to at least 50 by the end of June and with steady growth thereafter.

The Divx players, and the discs, will be available in Circuit City and Good Guys stores.

National release of the Divx players and titles is planned for late summer or early fall, said a Divx spokesman. Under the Divx scheme, consumers would purchase a film title for $4.49. Once they start playing the disc, they'd have 48 hours to play the title. After the initial two-day period, consumers would have to pay an additional fee to play the disc again. The standard DVD format has no playback restrictions, but the discs are more expensive.

The Divx format is also backed by the Century City law firm of Ziffren, Brittenham, Branca & Fischer. Six Hollywood studios - Disney, Fox, Dreamworks, Paramount, Universal and MGM - have announced their intention to release Divx titles.


Here's a great propaganda piece on Divx that Circuit City published in a recent issue of their employee newsletter, the Circuit City Ink. Kinda reminds me of the Capra Why We Fight films from WWII, which were used to boost morale among the troops, and to sell the war to the folks at home. Divx ought to be sold by a guy like Ron Popiel on late night TV, right along side his bald-spot removing spray paint (just a thought). Anyway, here it is:

Divx is Coming Soon... To a Display Area Near You!

Divx - The Best Way to Watch Movies At Home

It may be happening as you read this-construction Associates making room for Divx displays on your sales floor; training Associates providing demos of the Divx system; and Circuit City customers asking, "are the Divx Player here yet?" To be sure, the Divx players are coming. And Divx discs too. It starts in San Francisco and Richmond in May and around Labor Day, the Divx wave will start cresting around the country.


Try to imagine the kind of home video system you would design for yourself if you could. It would offer:

* The quality of DVD digital picture and sound
* The freedom of no returns and no late fees
* The availability of hot feature titles, all the time
* The flexibility of starting the viewing period when you want
* The convenience of an affordable home video collection.

And it would do it all for about the price of a videotape rental. That's Divx! Quality and convenience. Freedom and flexibility. Affordability and title availability. The frustrations with the old video rental system are now a thing of the past-something to tell your grandkids about some day.

How does Divx Work?

Buying Your Player:

Divx begins with the purchase of a Divx-enhanced DVD player. Zenith-Inteq models will be available this summer, and the national roll will begin with RCA and Panasonic player later in the year. The players will carry a suggested retail price of $499. Divx is not starting a format battle. Divx is a feature. All Divx-enhanced DVD players start as fully-functioning DVD players and are capable of playing all basic DVD discs.

Setting Up Your Player:

The player plugs easily into the back of your television and connects to a convenient phone jack. After your player is plugged in, you make a toll-free call to the Divx Customer Satisfaction Center to register it. Part of registration includes providing a major credit card or debit card number. Any future charges you incur will be charged to that card. The call takes about five minutes, and then you are ready to start watching your favorite home movies!

Buying Divx Discs:

Divx movie discs look like music CDs and come in durable, jewel case-sized packages. For a suggested retail price of about $4.50, not much more than the cost of a VHS tape rental, you can buy one of your favorite movies on a Divx disc-including the most recent releases-from Disney, Paramount, Universal, Twentieth Century Fox, MGM and DreamWorks. Divx discs are yours to keep, so they never have to be returned. That means no late fees and no late-night return trips to the video store. And because Divx will make enough discs available to satisfy demand, you will no longer find the store out of the hot movie title you most wanted to see. By national roll out, approximately 150 Divx titles will be available. That number will grow to 400 by the end of the year.

Playing Discs- The First Time:

The purchase price of a Divx disc includes a two-day viewing period. But unlike traditional videotape rentals, the viewing period begins not when you leave the store, but only when you insert the Divx disc into your player for the first time and press play. Your rental period may start on the day you bought your discs. It may start the next week, or even months later. With Divx, you have all of the features and flexibility you have always enjoyed with videotape-rewind, fast-forward, pause. Unlike pay-per-view, you can start the movie, fall asleep and start it again the next day, and you can watch it as many times as you like within that 48-hour window. And because Divx is a feature of DVD, you will also enjoy the highest-quality digital picture and sound as well as other DVD benefits, like no rewinding and jumping to different parts of the program (as you can with CDs).

Playing Discs- The Second Time:

If you wish, Divx discs can be played again and again. Additional two- day viewing period can be purchased by following the on-screen prompts. The charge for a subsequent viewing period is about $3.25. This price will be charged to your card and will show up on your statement during the next billing cycle. You can review your account through your Divx player. If you don't think you'll want to watch a particular disc again, you might consider giving it to a friend or trading it for another title. The viewing charge for anyone else will also be $3.25, almost one-third less than the retail cost.

Converting Discs to Unlimited Play:

You and your family (particularly your kids) undoubtedly will enjoy some movies so much that you'll want to watch them many times. It would make sense to convert these discs to the unlimited play format. Converting these discs to DivxSilver, as they are called costs about $10 to $15, depending on the movie and how long it has been available on video. To convert a disc to DivxSilver, you simply follow the on-screen instructions. DivxSilver discs can be viewed as unlimited number of times without charge to any Divx player registered to your account. So, if you have Divx players in your family room, bedroom, and at your vacation home, you can play your DivxSilver discs on those players for free. For some titles, you may also purchase DivxGold discs (for about $20), which allow for unlimited free play on any Divx player.


The phone line That's connected to your Divx player is used to transmit transaction information to the Divx billing center. The player calls the center, toll-free, once or twice a month during off-peak hours (usually after midnight) to send a record of charges that you may have incurred, such as the purchase of additional viewing periods or the conversion of a disc to DivxSilver. Should you need to use the phone during one of these transaction calls, the player immediately hangs up and calls again later. The player never interferes with outgoing or incoming calls. While the player's phone line never has to be plugged in to play a disc, the preference is for players to be connected to the phone line at all times to facilitate the necessary exchange of information. The entire call takes about 30 seconds.

Mail and Specials:

In addition to sending billing information every month, Divx players also receive information from the Divx billing center. Using the player's built-in menu, you can navigate to your own mailbox where you'll find the latest Divx news and information about Divx specials, such as discounts on DivxSilver conversions or extended viewing periods. You will also be kept up to date on title availability and any new Divx retailer in your area. And if you prefer to do your shopping on-line, you can also order Divx discs through the Divx website at

Building A Video Library:

Divx is the most convenient system ever invented for watching feature movies at home. In addition to unprecedented convenience, Divx enable you to simply and economically build an at-home movie library that has all the quality and resonance of DVD. Divx players can play not only your favorite feature films on affordable Divx discs, but all basic DVD titles as well.

Let the Revolution Begin...

What the microwave oven did for the kitchen-no less than a revolution in time savings-Divx promises to do for the family room. It will liberate us from the shackles of round-trip rentals and free us forever from late fees. It will enhance our home theater experience, delivering the awesome power of digital picture and sound. And it will give us the flexibility to watch what we want, when we want. This is an exciting time for Circuit city and our Associates, as we are poised to change forever the way people watch movies at home.


I've got another interesting piece of Divx information for you. The following is an exert from Circuit City's financial report for FY98. It reveals a bit of fact about just how much Circuit City has committed to Divx, and how much they have pledged to pay the studios for their Divx support:


Under Section 13:

Commitments and Contingent Liabilities

(A) Investment in Divx: In May 1995, the Company agreed to invest $30.0 million in Divx, a partnership that has developed and will market a new home digital video system. That commitment was increased to $130 million in September 1997. The Company holds approximately 66 percent of the partnership and allocates investment in Divx to the Circuit City Group. As of February 28, 1998, the Company has funded approximately $86.8 million of its commitment, of which $51.9 million has been expensed ($31.8 million was expensed in fiscal year 1998, $11.4 million in fiscal 1997, and $8.7 million in fiscal 1996 and prior).

(B) Licensing Agreements: Divx has entered in to licensing agreements with motion picture distributors for use of their full length films for the Divx system. The Company guarantees Divx's performance under these commitments. The licensing fees are based on varying percentages of consumer viewing and wholesale receipts and require minimum distributor compensation commencing from the operational date of each agreement through the following three to five years. This compensation is contingent upon shipment of the first Divx disc, currently expected to occur in May 1998. At that time the minimum compensation from Divx to the studios is $112.0 million ($11.00 million in fiscal 1999, $26 million in fiscal 2000, $32.0 million in fiscal 2001, $20.5 million in fiscal 2002, $14.5 million in fiscal 2003, and $8.0 million is fiscal 2004).


Fascinating no?


Here's the text of the announcement that the Divx test run will be delayed, from the Dow Jones news site. Unfortunately, the media doesn't seem to have picked the story up. In any case, here it is:

Debut Of Circuit City's DIVX Pdt Put Off 'A Few Weeks'

DOW JONES NEWS 05-06-98 02:22 PM

Co Says Dates Have Been 'Flexible'

Dow Jones News Service via Dow Jones

By Mark Yost

RICHMOND, Va. (Dow Jones)--Circuit City Stores Inc. (CC) Wednesday said the test launch of its DIVX video disk system will be delayed "a few weeks."

Circuit City spokeswoman Anne Collier told Dow Jones that the test launch in San Francisco and Richmond probably will take place in late May. She also said the test launch delay will not affect the national rollout of the product, which is scheduled for "late summer."

"These dates have always been flexible,"Collier said. "They always are, especially when you're dealing with the development of a new product. But yes, they are a few weeks later than we'd planned."

Analysts who follow Circuit City and sources close to the company both told Dow Jones that the delay was the result of licensing problems with Hollywood studios, though they declined to provide further details.

"Circuit City wants to step off with their best foot forward and they figure that if they wait a few weeks, and have a fuller library of titles, the initial launch will go better," said a source close to the company.

There are expected to be 500 titles available on DIVX by year end, up from 68 as of early February. Six Hollywood studios have agreed to license their films for release on DIVX.

Movies from Disney Co. (DIS), Seagram Co.'s (VO) Universal Studios unit and Viacom Inc.'s (VIA) Paramount Studios unit are available in both DIVX and DVD.

Dreamworks SKG and News Corp.'s (NWS) Twentieth Century Fox Studio have authorized just the DIVX format.

Metro-Goldwyn-Mayer Inc. (MGM) agreed in March to use the format.

Circuit City announced in March that San Francisco would be one of two test markets for DIVX. About a month later it named Richmond as the second test site.

DIVX CDs can store one or more feature films. DIVX machines can play both DIVX and DVD disks.

(END) DOW JONES NEWS 05-06-98 03:13 PM Copyright (c) 1998 Dow Jones and Company, Inc. Received by NewsEDGE/Web: 05/06/98 15:18:22


It seems that another DVD player manufacturer has announced support of Divx. Here's the full press release issued today:


High-End and Basic DVD Players To Be Part of Signature Series Line

WOODBURY, NY, April 7, 1998 -- The Harman Consumer Group, manufacturer and distributor of the Harman Kardon line of premium audio and video consumer electronics, announced plans to produce and sell DVD players that include the new Divx feature.

"Harman Kardon believes that Divx offers customers real value. We intend to offer the Divx feature, along with a variety of other high-value benefits and features, in our forthcoming DVD players," commented Gina Harman, executive vice president of the Harman Consumer Group. "In keeping with Harman Kardon tradition, our mission and overriding concern is to deliver the finest audio possible. Harman Kardon has, for almost 50 years now, been renowned for its superior audio capabilities, and we fully intend to bring these capabilities to bear in the DVD medium as well."

Scheduled to be introduced in two markets this spring and rolled out nationally in late summer, the Divx system enables consumers to purchase a special, encrypted movie disc for a suggested retail price of about $4.50. The price includes a two-day viewing period that begins when the disc is inserted into the Divx player, either on the day of purchase, the following week, or months later. Divx discs never have to be returned, eliminating late fees and providing home theater enthusiasts with an economical way to build an at-home DVD library. Additional viewing periods -- including an option to convert a disc to unlimited viewing on Divx players registered to a consumer's account -- can be purchased through the Divx player. Divx players will play all basic DVD discs, but players without the Divx feature will not play the more modestly priced Divx discs.

Harman Kardon expects to offer the Divx feature in its second generation DVD product line, which will be available to consumers in 1999.

Six major motion picture studios -- Disney, Paramount, Universal, Twentieth Century Fox, Metro-Goldwyn-Mayer and DreamWorks -- have multi-year agreements to make titles available on Divx discs.

The Divx capability is being licensed to Harman Kardon by Digital Video Express, LP, a partnership between Richmond-based Circuit City Stores, Inc. (NYSE : CC, KMX), the nation's largest retailer of brand-name consumer electronics, and a prominent Los Angeles entertainment law firm.

The Harman Consumer Group [HCG] includes the worldwide operations of Harman Kardon, Citation, JBL, Infinity, Concord and Audioaccess. HCG is a part of Harman International Industries, Inc., worldwide manufacturers and marketers of professional, OEM and consumer audio/video products [NYSE: HAR].


Divx recently provided me with a packet of press materials, including an interesting full-color promotional flyer. I've included pictures of it for all of you to see - I think you'll find it interesting! The full text follows the pictures:

Front (above left) and Back (above right) covers.

Inside (2 pages - across fold) of promotional flyer (above).

FULL TEXT--------------------------------


You'll never look at movies the same way again.


Sit. Watch. Whatever you want. Whenever you want.

[PIX OF CHAIR - CAPTION: Comfy chair for movie watching. Not included in price.]

Watching movies at home has never been this convenient. This easy. This much fun. Introducing Divx. It's the perfect way to complement all the DVD movies you own. Because it offers you all the benefits of DVD. And then some. The future of home entertainment is here. Divx. You've reached the point of no return.

[PIX OF DISC - CAPTION: Divx disc. That hot new movie you want to see goes here.]

How does it work. It's simple. It's convenient. You buy your Divx digital movie for about $4.50. You take it home and play it whenever your little heart desires. You keep it forever. Or you give it to a friend. (Hey, we'll even recycle it for you.)

The price includes a two-day viewing period. But the clock doesn't start ticking when you leave the store. It starts when you insert the disc into a Divx player and push the play button. On the day you buy the movie. The next week. Or even months later. We did say "convenient," didn't we? Discs can be paused, stopped, and played multiple times during the viewing period.

And if you want to watch the movie again, after the first viewing period, you can simply purchase additional viewings for just $3.00 through the on-screen menu of your Divx player. You don't have to go anywhere. Is that convenient or what? Of course, there are those movies you absolutely fall in love with after you watch them once. Movies you just know you'll want to watch over and over. Well, many Divx discs can also be converted to "unlimited viewing" by paying a one-time fee. Easily. Through your Divx player. (We wouldn't want to inconvenience you!)

[PIX OF PLAYER - CAPTION: Divx player. Watching a movie at home will never be the same.]

It gets better. Divx will bring you plenty of copies of all the new releases from studios like Disney, Paramount, Universal, and Dreamworks. So you'll actually get to see the movie you want - before all your friends tell you the surprise ending.

And because Divx is DVD technology, you get all the benefits of great picture and sound that is unbelievable. The first time you play it. And the gazillionth time you play it.

The end. Divx is about being in control. It's about sitting back. Putting your feet up. And watching the movie you want to watch at the precise moment you're in the mood to watch it. At 3:00 A.M. Or at 3:06 A.M. Today. Or five months from now. It's the ultimate in convenience. Divx. Enjoy.

[Divx logo - CAPTION: You've reached the point of no return.]


You've reached the Point of no return.

[Divx logo - CAPTION:]

END OF TEXT----------------------------------


A few days ago, Circuit City (Divx's new retail partner) let it slip in a press release that San Francisco would be one of the two markets chosen by Divx for their April test run. Now we have something of a confirmation from Consumer Electronics magazine. We also finally know the other market - Richmond, VA. Here's the full article:

Richmond and San Francisco are Divx Introductory Markets

(Consumer Electronics - March 23, 1998)

Monday Circuit City's home base of Richmond, Va., will serve as 2nd of 2 Divx introductory markets where Zenith hardware and slate of 65-70 software titles rolls out starting in May, we have learned. Richmond thus would join San Francisco, home turf of Good Guys, which last week said its 19 Bay Area stores will carry Zenith-Inteq Divx DVD players this spring, followed by RCA decks in summer, Panasonic and ProScan models by fall. Good Guys will join similar number of Circuit City stores in San Francisco that also will carry Zenith players and Divx software.

Divx spokesman wouldn't confirm or deny Richmond report, saying only that 2nd introductory market has been finalized, regardless of whether Divx retail chains other than Circuit City ultimately are signed on there. Spokesman said Divx is aggressively pursuing additional Divx retail partnerships. He said 2nd introductory market won't be announced until soon before actual launch in May. Circuit City has 4 stores in its home Richmond base area.

Circuit City has been actively pitching for Sears support on Divx, presumably to build hardware ubiquity, but also as possible foot in door at Musicland, which cross-promotes DVD with Sears and where Circuit City would crave Divxsoftware placement. However, Sears executives say they're undecided on Divx, and Musicland Chmn. Jack Eugster told last week's San Francisco NARM convention that his company remains opposed to it. Eugster said Musicland "has an open view" on supporting demands of consumers, "but the product also has to fit the needs of our company." He said he has urged Divx officials to "pay attention to the fact that retailers are not particularly excited about the idea of a product being sold, and then... added on to and becoming a full lifetime sellthrough product without us participating in that."

Similarly, Good Guys affords Circuit City credible west coast Divx endorser, presumably with future bridge to formidable Tower Records chain. Good Guys and Tower have corporate and commercial partnerships, but Tower Chmn. Russ Solomon has been among Divx's most outspoken critics. At NARM, Solomon told us there's no change in his opposition. Mindful that Divx hardware and software will be merchandised in collaborative "Wow" stores shared by Good Guys and Tower, Solomon agreed that was sticky issue that hadn't been addressed yet. Good Guys Pres.-CEO Robert Gunst has been among few Circuit City rivals to refrain from openly disparaging Divx concept on ground that if consumers ultimately clamor for it, he feels responsibility to carry it. Statement last week quoted him as echoing Divx party line, that Good Guys views Divx as "breakthrough feature enhancement to DVD. " Zenith tentatively priced first Divx deck -- based on first-generation DVD hardware technology -- at $599, but we're told Circuit City would prefer $499. Final pricing decision was expected soon.

Gunst told us Good Guys will merchandise Divx software in same section ofstores as hardware. About 67 titles are expected by early May, 100 by late May, 150 by fall, 500 after first year. We're told Divx software will be distributed through rackjobbers. Divx is quoting $4.50 selling price on most movies, based on final wholesale cost to dealer of $3, including 50 cents in promotional and introductory allowances. We're told Divx has landed long-term replication deal with Nimbus to deliver software in modified jewelboxes at 90 cents per disc, well below average $1.60 quoted by other replicators as going rate for bare-bones DVD movie. Of $3 per disc in wholesale revenue, about half is expected to go to studio, which also stands to make additional $1.25 per title when consumer renews for additional 48-hour viewing period. Crux of resentment toward Divx by traditional video rental outlets is that those stores won't figure in Divx revenues after customer buys initial disc and takes movie home. Titles listed for Divx launch won't include any films that won't already have been released on VHS at that point. Most also will have been released on regular DVD before Divx launch -- major exceptions being those from Paramount, which has 15 catalog titles listed for launch, and DreamWorks, 2. Other titles are from Disney (31) and Universal (21) and all will have been available on VHS before they're released on Divx, and most of which already have been been announced for or released on regular DVD. As expected, Fox, which didn't announce Divx endorsement until mid-Feb., won't participate in introductory 2-market launch this spring.

Zenith won't post operating profit this year, said wire service reports, quoting senior officials at majority shareholder LG Electronics. LG said Zenith's management is developing business plan to turn company around, and LG, which owns 55% of Zenith shares, is in talks with company board concerning plan.


Well folks, after all these months of listing to the hype, I have seen a Divx player up-close. You can read my full report in my latest feature article, Divx: Beyond the Hype - A First Look at a Divx Player. Complete with pix of the player, discs and menu screens, I think you'll find it an interesting read!


Well, folks... this weekend, I will be getting an up-close look at an actual Divx player. After all these months of reading the Divx news, I must say I'm curious to finally see it firsthand. I'll definitely be giving you a full report of the demonstration (along with my comments), so be sure to stay tuned.

In the meantime, Divx has released a tentative list of the titles they will have available for their April test run. Keep in mind that all will be pan & scan only, with no additional features. The titles are as follows:

12 Monkeys
Animal House
Bullets Over Broadway
The Chamber
Clear and Present Danger
Con Air
Cop Land
Crimson Tide
The Crow
Dante's Peak
Day of the Jackal
Death Becomes Her
Ed Wood
Escape From L.A.
Face Off
Father of the Bride
Fierce Creatures
The First Wives Club
For Richer or Poorer
G.I. Jane
George of the Jungle
The Getaway
The Ghost and the Darkness
Gone Fishin'
Good Morning Vietnam
Grosse Pointe Blank
The Hand That Rocks the Cradle
The Hunt for Red October
In & Out
The Jackal
Judge Dredd
Kindergarten Cop
Liar Liar
Mighty Aphrodite
Mission: Impossible
Mouse Hunt
Night Falls on Manhattan
Nothing to Lose
The Nutty Professor
The Peacemaker
Play Misty for Me
Pretty Woman
Primal Fear
Private Parts
The River Wild
The Rock
Romy & Michele's High School Reunion
The Saint
Sea of Love
She's So Lovely
Sling Blade
Star Trek: First Contact
Star Trek Generations
Terminal Velocity
While You Were Sleeping


[Editor's Note: I made a quick call to Fox Home Video's VP of Media Relations Steve Feldstein, to try to get a better sense of the announcement from Fox's perspective. He was quite decent, but unfortunately, could not comment beyond the press release you see below. Rest assured however, that the phones over at Fox were ringing off the hook...]

Twentieth Century Fox to Release Product on Divx
Fox Joins Four Other Studios in Support of Divx

(General Press Release - February 19, 1998)

BEVERLY HILLS, CA/HERNDON, VA., February 19, 1998 -- Twentieth Century Fox Home Entertainment (TCFHE) and Digital Video Express, LP (Divx) have reached a multiyear agreement that will allow for TCFHE feature film video products to be released on Divx discs. Plans call for new video titles to be made available on Divx concurrent with their VHS rental and major promotion sell-through release. A selection of catalog products also will be made available on Divx.

Twentieth Century Fox joins four other motion picture studios in supporting the Divx system, an enhanced DVD (Digital Versatile Disc) model that provides greater consumer convenience and flexibility, digital-quality picture and sound, and increased anti-piracy protections.

"We believe that Divx is a great proposition for the growing number of consumers entering the digital video marketplace," noted Pat Wyatt, Acting Head of Twentieth Century Fox Home Entertainment. "Given the significant anti-copy safeguards that Divx offers, we feel our film assets will be sufficiently protected to allow for their day and date release with VHS."

"Fox's support of Divx is terrific news for at-home video audiences as it expands the number of titles available on a digital disc," said Richard L. Sharp, Chairman and Chief Executive Officer, Divx. "Beginning later this year, the remarkable dramas, comedies and action films that movie lovers have come to expect from Twentieth Century Fox -- such as ALIEN RESURRECTION, THE EDGE and THE FULL MONTY -- will be available in a high-quality, convenient digital format."

The Divx system enables consumers to purchase a special, encrypted movie disc that contains a two-day viewing period. The 48-hour viewing window begins, not when the consumer leaves the store, but only after he or she inserts the disc into the Divx player and presses play, either on the day of purchase, the following week or months away. Because the disc never has to be returned, there are never any late fees, and additional viewing periods can easily be purchased through the player. Divx-equipped players will play all basic DVD discs, but the lower-cost Divx discs cannot be played on basic DVD players.

Other studios with long-term agreements with Divx include Disney, Paramount, Universal and DreamWorks.

Twentieth Century Fox Home Entertainment is a subsidiary of Twentieth Century Fox Film Corporation, a News Corporation company. Recognized as an innovative global industry leader, Twentieth Century Fox Home Entertainment is the marketing, sales and distribution company for all FoxVideo and Fox Interactive products. Visit Twentieth Century Fox Home Entertainment on the internet at Digital Video Express, LP is a partnership of Richmond-based Circuit City Stores, Inc. (NYSE: CC, KMX), the nation's leading consumer electronics retailer, and a prominent Los Angeles entertainment law firm. More information can be obtained about Divx on the internet at

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