How Stage6 Changed the Video Sharing Game

In 2006, DivX® was a thriving technology company with a popular video codec used by millions of people around the world. DivX technology was integrated into tens of millions of DVD players and consumer electronics devices from major manufacturers, enabling consumers to playback DivX videos on their televisions.

Though DivX and other technologies were enabling high-quality Internet video in a way that had never been seen before, “video sharing” as we know it now was still in its infancy in 2006. YouTube had just launched the previous year and was growing quickly, while the increasing popularity of smart phones and digital still cameras that shot video was giving rise to a new category of videos called “user generated content.”

Early user-generated-content generally consisted of relatively low-quality, short “snackable” clips that people passed around online—dogs on skateboards, pratfalls and pranks, etc. Vlogs and longer-form content were less prevalent, but more and more creators were starting to become interested in the Internet as a platform for substantial, high-quality content.
Skateboarding Dog on YouTube

The DivX team saw an opportunity to create a video-sharing site that offered some key features that other sites at the time lacked, namely:

  • HD-quality video. YouTube and other similar sites at the time used Flash to deliver video, resulting in low-quality video that was fine for a quick clip of cat playing keyboard but was far from cinematic. DivX technology enabled real HD-quality playback on the Internet, comparable to Blu-ray DVDs, something other services couldn’t offer. YouTube content was also streaming-only, so users couldn’t download files and play them back later.
  • Big screen playback. Flash and other competing technologies were not integrated into consumer electronics devices, making it difficult if not impossible to play user-generated content beyond the PC. The huge installed base of DivX Certified® devices would allow users to download files from the site and enjoy them in their living rooms, or even stream video directly to their televisions using connected devices.
  • Higherquality content. YouTube catered to casual users and video creators who wanted light, short-form content. The DivX team saw an opportunity to offer a platform for talented, creative directors and creators who were creating high-quality, engaging content.

The DivX team spent months developing the bones of what would become Stage6 (initially codenamed “Zen Garden”) focusing not only on technical innovation and product usability but also looking to create a true community where users could explore, share and engage with creators.

As DivX co-founder Darrius Thompson said at the time, “We’ve tried to create a site that lets content creators give their viewers a true ‘lean-back’ video experience, with the highest possible visual quality, the greatest amount of options to bring content beyond the PC and the ability to create a real, engaged community around their content brands.”

Stage6 Video Highlight

The site was built around the notion of “channels”, enabling creators to build their own branded mini sites to feature their content and interact with users. The DivX community team reached out to filmmakers, video bloggers and multimedia artists from across the globe, amassing a diverse and engaging collection of content that would be available at launch.

Stage6 launched the first Alpha version of the site in August 2006 with little fanfare or marketing. The site proved an immediate hit with users thanks to the high-quality of the video and the wide range of compelling content. As Stage6 continued to grow in popularity, more and more creators were drawn to the service and the community of users flourished worldwide. In April 2007, DivX launched a Beta version of the site, with a new look and feel and better tools for creators to interact with their fans. The Beta version of the site was powered by DivX’s innovative HTTP-based web player, which for the first time offered a high quality home theater-like experience for web video.

Stage6 Beta Web Homepage

Later in 2007, DivX launched a new product called “DivX Connected,” a media streaming device that let users play DivX content on their televisions directly from the Internet. Stage6 was integrated into the device, offering content creators the ability to distribute their videos directly to the living room, a feature not possible on other video sharing sites.
Stage6 on DivX Connected

By early 2008, Stage6 had over 17 million monthly unique visitors and over 360 million page views. The site was hailed by technology journalists and beloved by millions of users all over the world. Leading  industry publication TechCrunch hailed the “stunning video quality” that Stage6 offered, and many others agreed. “One reason it was so great was the fact that the content was compatible with over 70 million electronic devices from major manufacturers,” wrote Cybernet News. “This meant playing back videos gathered from Stage6 was easier than ever.”

Like all good things, alas, Stage6 was destined to end. The enormous popularity of the site led to huge hosting costs (bandwidth was a lot more expensive back in those days), and the DivX board of directors found it difficult to justify continuing to operate the site from a financial perspective. Efforts were made to separate Stage6 into a separate company or sell the asset to a third-party, but no deal could ultimately be reached, and the site was unfortunately shut down for good on February 26, 2008.

The legacy of Stage6 lives on, though. Over time, YouTube and other video sharing sites would come to adopt many of the innovations that Stage6 pioneered (and which we now take for granted)—HD quality video, TV playback, longer-form content, community tools. The notion of full-length, cinematic quality video delivered over the Internet has become ubiquitous, and the cost of operating a video-sharing site dropped significantly over time. Stage6 is remembered fondly by the DivX team that built it, the content creators that found new audiences through the site, and millions of viewers who got their first taste of truly high-quality video on the Internet.

Stage6 website

The DivX Open Video System: A Forerunner of the Streaming Revolution

Video streaming services have never been more popular than they are now. With dozens of different streaming providers, it feels like virtually every movie or television show ever created is available for anyone to watch, anytime on any device. But the streaming video nirvana that we now take for granted seemed like a distant dream back in 2001 when a brash San Diego start-up company created one of the first Internet-based video-on-demand platforms. 

streaming platforms
Some of the many, many streaming options we enjoy today.

The DivX® Open Video System — first introduced nearly twenty years ago — pioneered many of the technology innovations and product features that would become key components of the services we now use every day, helping lay the foundation for a massive change in media distribution and consumption.

It all started with a codec. In 1999, Jerome “Gej” Rota, a young French animator, created a version of an MPEG-4 video codec  (a portmanteau of “coder/decoder” that encodes a data stream for transmission and then decodes it for playback) that enabled DVD-quality video at small file sizes.  Jerome started a company with a few other budding technology entrepreneurs, and in August 2001 DivX 4.0, the first official DivX codec, was released to the public. The Internet video community responded with great enthusiasm, and DivX soon became the standard for full-length, high-quality video transferred over peer-to-peer networks. 

DivXNetworks, the company behind DivX, had been working in parallel to create an Internet-based video-on-demand system that built upon the quality and performance of the DivX codec. The goal was to create an end-to-end system for the secure sale and rental of feature films over the Internet. Due to the inferior quality of incumbent technologies, industry concerns about the effectiveness of existing digital rights management solutions, and the lack of universal broadband access, Hollywood studios and content creators had been slow to embrace an Internet based video-on-demand strategy.

The DivX Open Video System sought to address these concerns by implementing a few key innovations: 

  • A flexible, key-based digital rights management system that tied purchased content to a user rather than a device, making the videos more secure while improving the viewer experience.
  • A core codec that offered industry-best compression and performance enabling full-screen, DVD-like quality that was vastly superior to the pixelated, postage-stamp size viewing experience associated with Internet video at the time.
  •  A “progressive download” feature that allowed the viewer to begin watching a purchased or rented video after only a few minutes while the file continued to download in the background. Downloading a full-length feature film over early broadband connections could take 45 minutes or more, and at the time users were accustomed to waiting until the download was complete to begin viewing.

The development of the DivX Open Video System (OVS) was led by Director of Engineering Eric Grab and a team of dedicated programmers, codec engineers and video technologists. Eric and DivX co-founders consulted with the MPAA and Hollywood studios before beginning development to better understand the needs and concerns of the film industry and created a digital rights management system tailored to address those needs. “We worked hard to understand the very real concerns that Hollywood had about security, and we took those concerns seriously. The digital rights management solution we created tried to balance the concerns of rights holders with the needs of the viewer, and I think we got that balance right,” said Grab.

A small start-up where each employee wore many hats, the entire company participated in the development and testing of the OVS. Employees volunteered to stay after hours conducting QA, testing playback quality and logging bugs. “It was a true team effort,” recalls Tom Huntington, an early DivX marketing employee. “Everyone did their part to help the product get over the finish line, and we all believed deeply in what we were doing.”

Meanwhile, the small DivX sales team met with every film studio and content distributor they could find. The big studios were intrigued by the technology but still hesitant to dip their toes in the waters of online distribution, in part out of fear of cannibalizing the then booming DVD business that was bringing in record revenues. Smaller production companies and distributors proved more open to the idea, and several signed up as launch partners.

On September 6, 2001, the DivX OVS officially launched with partner Strand Releasing, an independent film distribution company. The first feature film available on the platform was called “World and Time Enough,” offered as a five-day rental for $4.95 on the Strand Releasing web site. Several more companies followed suit, and over the next few years thousands of independent titles were sold and rented by DivX OVS partners. 


With the launch of the DivX Certification program for consumer electronics devices in 2003, support for DivX DRM was built into every DivX Certified device, ensuring customers could play back DivX OVS titles on their televisions. Hundreds of millions of devices spanning virtually every major CE manufacturer were released supporting DivX OVS playback over the following decade and beyond. Today, there are over 1.5 billion DivX Certified® devices shipped worldwide. 

The DivX OVS was one of the first commercially available Internet-based video-on-demand platforms, enabling viewers to experience high-quality feature films in an entirely new way. Far ahead of its time, the DivX OVS launched a time where broadband Internet access was not yet ubiquitous, in a business environment where Hollywood studios were not yet ready to embrace digital distribution for a variety of reasons.

In 2007, a full six years after the launch of the DivX OVS, Netflix introduced streaming to their platform, eventually proving successful in breaking the loggerhead that kept Hollywood from embracing digital distribution. Many of the features that we take for granted in our everyday video consumption were pioneered by the DivX OVS, from DVD-quality picture over IP networks to flexible, transparent DRM and the ability to watch a purchased or rented title on multiple devices. “When I look back on it now, it’s clear that we were ahead of our time in a number of ways,” Grab said. “I’m proud of the work our team accomplished, and it’s gratifying to see the vision we had for the future of video come to fruition.”

The moment before everyone argues about which streaming service to watch.

The Birth of the DivX Revolution

Jerome and his alter ego, "Gej"

Jerome Rota didn’t set out to create a digital video revolution—he just wanted to show off his work and maybe attract a few clients along the way. In 1999, Jerome (nicknamed “Gej”) was a young compositing animator and video engineer living in Montpellier, France. Fresh out of school, Jerome was looking to create an online portfolio that would showcase the video and animation work he was doing for various clients.

The state of the Internet in 1999, needless to say, was quite different than it is today. Dial-up was still the primary connection method for most users (broadband was a luxury that wouldn’t roll out to the mainstream for a few years yet) and the idea of high-quality video over the Internet was a novelty, at best. Streaming video, to the extent that it existed, meant grainy, postage-stamp size blips in the corner of the screen. 

But things were starting to change. A group of leading technology companies had collaborated to create a new video compression standard called MPEG-4 that promised to deliver high-visual quality at file sizes small enough to distribute online. Microsoft released an early version of an MPEG-4 compatible video codec (a portmanteau of “coder/decoder” that encodes a data stream or signal for transmission and then decodes it for playback) that looked encouraging, and for the first time high-quality Internet video seemed like a realistic proposition.

Circuit City DIVX
Circuit City’s failed DIVX product

That’s where Jerome came in. He played around with an early MPEG-4 codec while putting together his video portfolio but was dissatisfied with some of the settings and format options. After a few hours of tinkering, he created a version that produced the kind of quality and compression performance he was after. Jerome called the codec “DivX ;-)”, a tongue-in-cheek reference to an early competitor to the DVD format from Circuit City called DIVX that was widely reviled by the online video community for its cumbersome digital rights management restrictions. Not thinking too much about it, he shared his creation with a few fellow video technology buffs online and went about his business.

It wasn’t long before “DivX ;-)” found its way into the wilds of the Internet and was widely adopted in video technology circles for its ability to create highly compressed video files that maintained visual quality at small file sizes. In true viral Internet fashion, millions of people were using the codec to encode and share DVD-quality videos over newly created peer-to-peer networks, and a true cultural phenomenon was born. “This is hard to believe,” Jerome is quoted as saying at the time. “It grew all by itself.” (CNET, 2002).

Young American entrepreneur Jordan Greenhall watched the DivX ;-) phenomenon grow with great interest from across the sea in San Diego, California. An early executive at streaming music pioneer MP3.com, Jordan had turned his interests toward video and thought DivX ;-) might be just the thing to ignite a still nascent industry. After much searching through the untamed IRC channels that made up the online digital video community at the time, Jordan attempted to track down Jerome.  “Nobody knew whether he was real,” Greenhall is quoted as saying (CNET, 2002). Eventually, Jordan managed to get in contact with Jerome and suggested they form a company, create a new codec from the ground up that would build on Jerome’s version, and see where it all went. 

Despite some early reservations, Jerome soon agreed to give it a shot. Before he knew it, he was boarding a plane bound for San Diego, with nothing but a couple of bags and a pack of cigarettes in his pocket. Jordan recruited Project Mayo logothree other budding technology entrepreneurs, and together the five co-founders launched a stealth start-up known as “Project Mayo,” the company that would one day become DivX®, Inc.

It was agreed from the beginning that the team would create a new codec from the ground-up that built on the work Jerome had created. Toward that end, the team went about the work of tracking down and recruiting the best video codec engineers they could find from all around the world. Soon, Jerome and company had assembled an international team of video technologists from multiple countries, including Italy, France, England and Russia, and brought them to San Diego to collaborate on the new project.

Without an office space to call their own, the team rented a house in the Mission Beach area of San Diego. Fueled by burritos and local craft beer, the global crew worked around the clock to create a codec that built on the MPEG-4 standard with innovative, proprietary features that improved compression and performance. The first iteration of a new codec was released as an open-source project by the Project Mayo team in January 2001. Called “OpenDivX”, the codec was a kind of “alpha” version designed for community feedback and testing. After a few beta releases, DivX 4.0, the company’s first official product, was released on August 22, 2001

The new codec was MPEG-4 compliant but featured significant performance and quality improvements. This included new features such as 4x improvement in encoding speed, multi-pass encoding and two different variable bit rate modes, improved visual quality and de-interlacing. DivX 4.0 was an immediate hit with the digital video community thanks to its groundbreaking ability to enable near DVD-quality video over the Internet, which was virtually unheard of at the time. “Our remarkably talented team of codec engineers and video technologists has worked tirelessly to optimize the performance, speed and quality of the codec, and we’re amazed by the result of those efforts,” Greenhall said at the time. (DivX 4 Press Release)

In the first five months it was available online, DivX 4.0 was downloaded over 5 million times, and subsequent versions of the codec would go on to reach over 1 billion downloads (and counting). The codec was licensed to numerous software companies, including CyberLink and Magix, for use in video editing and playback products, used by leading video game companies such as Blizzard for in-game cinematics, and was the foundational technology that enabled the DivX Open Video System, the company’s video-on-demand platform. Future versions of DivX technology were integrated into over 1.5 billion consumer electronics devices, enabling Jerome, Jordan and team to build a massively successful company that would go public on the NASDAQ stock exchange six years after the team first got together. 

Twenty years after the first DivX codec was released, the name DivX is still synonymous with high-quality video. DivX continues to innovate in order to deliver groundbreaking experiences to consumers around the world. 

Old DivX logo      Old DivX logo      DivX Logo

“It was just a good codec,” Jerome said at the beginning of the DivX era in 2001. “I made it for me, for my infographiques.” (Salon, 2001). The rest, as they say, is history.

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