The format's poor reception from consumers resulted in major financial losses for Circuit City and is credited with being part of the company's downfall.

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.

[citation needed] DIVX was introduced on September 8, 1997 (after previously being made under the code name Zoom TV),[11] with the format under development since 1995.

[17] After multiple delays,[18] the initial trial of the DIVX format was run in the San Francisco, California and Richmond, Virginia areas starting on June 8, 1998.

[20] A nationwide rollout began three months later, on September 21, again with only one Zenith player and 150 titles available in 190 stores in the western U.S.[21] At the format's launch, DIVX was sold primarily through the Circuit City, Good Guys, and Ultimate Electronics retailers.

The format was promoted to consumers as an alternative to traditional video rental schemes with the promise of "No returns, no late fees."

On September 22, 1998, a fourth retailer, Canadian Future Shop, signed a contract with DIVX to stock the format, although only in 23 stores in the U.S.

[citation needed] A marketing push began that November for the 1998 holiday season, with more than $1 million going into the campaign.

[10] 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.

[34] Others cited the higher price of DIVX-compatible DVD players and rental costs as their reason for opposing the format,[35] with one declaring DIVX as "holding my VCR hostage".

[39] 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."

[41] Pay-per-view companies were also concerned with the format intruding on their business sector, namely with their objective of single-use rentals of a film being offered to the consumer.

[47] The format's credibility suffered another blow when suspicions were raised about the nature of apparently independent pro-DIVX websites.

Circuit City denied any involvement in creating these sites, one of which closed shortly after tech journalists tried to contact its webmaster.

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.

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.

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