Most people think of DivX as MPEG-4, but there was a movie rental system called Divx that failed.

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Customers bought Divx DVD-V discs, each with individual serial numbers. Playback required a special multi-format Divx/DVD/CD-audio player that was registered to an account on a central billing system. The registration only had to be done if the customer wanted to use Divx discs in the player; DVD and CD-audio playback was unaffected by the Divx subsystem.

Unlike pay-per-view satellite, a Divx disc could be viewed as often as one wished for no additional charge during the viewing period on any player registered to the same account as the player on which the viewing period had been started. The user also had the freedom to choose from the Divx catalog, was not restricted to whatever was running that night. All DVD features were also available on the player.

A Divx disc did not have to be returned after it was used. It could be discarded, kept for future use, traded, given away, or converted to DivxSilver (if available for that title).

A special player hardware in a small daughtercard called the SP Module enabled Divx playback. The SP Module mounted a small, secure computer implemented via a custom VLSI chip, and used a large lithium battery for NVRAM backup. All account information and billing transactions were stored in the module. The chip itself used a patented security coating; it would shut down when power was removed, and opening its package would render it useless.

If the user had an unregistered Divx player and wished to use it with Divx discs, he or she contacted Divx to have the player (which had a unique ID number) associated with a billing account. Once this was done, the user connected the player to a phone line, and then used the player's setup screen to instruct it to download the account settings from the central Divx billing system into its internal memory. These settings included the decryption keys for decoding the discs and a list of discs that were approved for playback.

Viewing periods were usually 48 hours, and extra periods were typically $3.25, although both duration and charge were at the discretion of the film studio that owned the title. In addition, except for Paramount titles (Paramount expected customers to buy the DVD versions if they wanted unlimited play), most Divx titles could be converted to unlimited play, for an additional fee, on machines registered to a single account.

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