One person's hack, and the company that grew on top of it

The people and foundations behind the formats · Medium

A modified Microsoft encoder and a curiosity about file size launched both a format and a business.

The man and the modification

In 1999, a French programmer named Jérôme Rota — working under the handle Gej — took Microsoft's MPEG-4 Video codec, the one bundled quietly inside Windows Media Player, and modified it. The modification was focused and practical: he stripped out the network-streaming constraints Microsoft had baked in and repackaged the encoder so it could write video at arbitrary bitrates to an ordinary file. The result circulated under the name DivX ;-) 3.11 Alpha, the semicolon and hyphen a deliberate wink at anyone who understood what they were looking at.

What Rota had exposed was that MPEG-4 Part 2 compression was efficient enough to fit a recognisable feature film onto a standard 700-megabyte CD-R — something MPEG-2, the DVD format's codec, could not do without a disc of its own. The moment that fact circulated, the build spread quickly through technical communities. Its quality was not pristine; the encoder had no two-pass mode, its handling of keyframes and GOP structure was inherited from Microsoft's constrained original, and the container it used was AVI, an ageing Microsoft format from 1992 that had never been designed to hold anything so compressed. None of that dimmed the enthusiasm. The file fit on a disc. That was the point.

From hack to company

The attention that followed Rota's release was not purely technical. It was commercial. In 2000, DivXNetworks was founded — based in San Diego, California — with the explicit aim of turning the hacked codec's momentum into a legitimate product. Rota was involved in the company's early work, and the name DivX became its registered property rather than a floating scene handle.

DivXNetworks' first task was to replace the underlying encoder entirely. They could not ship a product built on modified Microsoft code without legal exposure they had no interest in carrying. The company built a new MPEG-4 Part 2 encoder from scratch, and DivX 4.0 arrived in 2001 as a properly licensed commercial release — same name, completely different codebase, carrying none of the original hack's borrowed components. The winking semicolon was dropped. The codec was now something the company actually owned.

The broader ecosystem responded in kind. Open-source developers who wanted no part of a proprietary codec had already begun work on an alternative, which would become XviD — built to the same MPEG-4 Part 2 standard, royalty-free, and developed entirely outside DivXNetworks' control. The two codecs competed on the same container, encoding the same kind of content, through the early 2000s, a competition that ultimately forced both to keep improving.

DivXNetworks continued to develop the codec through further versions, adding two-pass encoding — which let the encoder analyse the full clip before committing bitrate — and improving motion estimation, chroma subsampling decisions, and psychovisual tuning. The company eventually rebranded as DivX, Inc., licensed hardware decode support into consumer DVD players, and for a period in the mid-2000s, the DivX logo on a standalone player was a selling point on the box. The format had travelled from a modified library on a niche forum to a certification mark on retail shelf hardware.

What the arc from Rota's modification to DivXNetworks illustrates is a pattern the codec era repeated: a technical demonstration, made by one person working at the edge of what the tools allowed, defined user expectations before any company could. The company that followed had to honour those expectations, or lose to the open-source project that would. By the time the Moving Picture Experts Group standardised H.264 in 2003 and hardware began to catch up with its decode demands, DivX and XviD together had already established that good-enough compressed video belonged on a disc in someone's hand, not behind a proprietary streaming protocol or a dedicated hardware box. The hack made the argument. The company spent years defending it.