The story of Divx began in 1998 from an initiative called Digital Video Express and was invented by Circuit City and a Los Angeles based entertainment law firm. The original idea at that time was that you could rent special disposable DVD / Divx disks which could only be played in a player connected to a phone line. When this Divx movie was played, it was monitored by an online database so if you paid for a one day rental, the movie wouldn’t play on the second day.

That was the original concept but the Divx codec we know today was actually derived from some Windows Media Player code that existed in beta version. In 1999 a French hacker named Jerome Rota found a codec embedded in the Microsoft product that was actually an MPEG -4 compatible process, so he extracted it from the code and it soon started circulating around the internet as DivX.

Almost immediately, it became fairly obvious to everyone that this was the perfect way to transfer movie material throughout the internet easily and most importantly, without any considerable loss in quality Jerome Rota himself formed a company called DivxNetworks and everything started spreading like wildfire, with different developers offering different codec's and versions and the compression quality getting better and better every day.

In contrast with the problems the MP3 format was facing from the Recording Industry Association of America (RIAA), the Motion Picture Association of America, has been working with and not against the Divx format. This "peaceful" co-existence is the reason that lately we see more and more consumer DVD players capable of playing Divx movies on the market .

Until now, it was necessary to use a PC that allowed playback in conjuction with a software codec (DivX3x, 4x, 5x, Xvid, 3ivx etc).

Since the vast majority of users still prefer to view their movies on a conventional TV set rather than sitting in front of a monitor, the introduction to the consumer market of DVD players that can play DivX material was inevitable.