Almost a decade ago Circuit City tried to promote DIVX – an ill though-out technological disaster that started the company spirally downwards. Circuit City never recovered and is now being liquidated.
After DIVX, scores of customers stopped visiting Circuit City, including yours truly. And they never went back, after discovering Best Buy and then cheap electronics deals on the Internet.
DIVX was a proprietary rental format like a DVD that required a special DIVX/DVD player to view. After paying for the movie, once you started watching it you only had a day or two before it locked and was unplayable. Another fee had to be paid to watch it again.
Even worse, the DIVX player had to be connected to your phone line so Circuit City could keep track of what movies you had, when they had been played, if your time was up, and if you had paid the proper fees.
Needless to say, no one signed up.
DIVX was not something investment money had gone into to create by a technological company, or anyone that knew what they were doing (Sony, Panasonic, or think of a hundred electronics brands). Instead, DIVX was bankrolled and created by Circuit City – so Circuit City had huge financial losses as a result. Not a smart move for a retailer to try and create a technology that competes with the wholesalers supplying the goods the retailer sells.
Sure, going back a decade is long-time to pin the company’s downfall. But if you track the success of Circuit City and when it started to lose market share, before fighting to stay relevant, until it finally declared bankruptcy, you will see that DIVX was the breaking point. And of course a moronic management team.