Divx was a DVD-V-based home video rental system that combined features of pay-per-view satellite/cable and traditional video rental. It was sold only in the United States, although players could also be used in Canada. Customers would buy special Divx DVD-V discs, each with individual serial numbers, for $4.49 apiece. Playback of these discs required a special multi-format Divx/DVD/CD-Audio player that was "registered" to an account on a central billing system, in a manner similar to pay-per-view satellite. The registration only had to be done if the customer wanted to use Divx discs in the player; DVD and CD-Audio playback was unaffected by the Divx subsystem.

Divx playback capability was implemented via special player hardware in a small daughtercard called the SP Module. The SP Module mounted a small secure computer implemented via a custom VLSI chip, and used a large lithium battery for NVRAM backup. All account information and billing transactions were stored in the secure computer, which was specially designed to be very difficult to hack into. The chip itself used a patented security coating; it would shut it down when power was removed, and its package could not be opened without causing enough damage it to render it useless.

If the user had an unregistered Divx player and wished to use it with Divx discs, he or she contacted Divx to have the player (which had a unique ID number) associated with a billing account. Once this was done, the user connected the player to a phone line, and then used the player's Setup screen to instruct it to download the account settings from the central Divx billing system into its internal memory. These settings included the decryption keys for decoding the discs and a list of discs that were approved for playback (Divx had a high level of control over which discs could be played, and for how long), discs that were eligible to conversion to unlimited play (DivxSilver), etc. as well as customer account information like billing statements.

Once the registration process was complete, the player was ready to play Divx discs. To play a disc, the user started "Play" in the same manner as an DVD or audio CD. The Divx logo would flash on the screen; if the disc had an active viewing period or unlimited play status, it would begin to play. Otherwise, the Divx menu would appear, along with a notice informing the viewer of the potential viewing charge. The user could start a limited viewing period here, or convert the disc to unlimited play on machines registered to the account for an additional fee, usually between $15 and $20.

Once playback had started, the disc could be used normally, just like an DVD or audio CD, while any viewing period was in effect. One perk of the Divx system over DVD was that the annoying FBI warnings at the start of films could be skipped past, something that can't be done with DVD.

Viewing periods were usually 48 hours, and extra ones were typically $3.25 apiece, although both duration and charge were at the discretion of the film studio that owned the title. In addition, apart from Paramount offerings (Paramount expected customers to buy the DVD versions if they wanted unlimited play), for an additional fee, most Divx titles could be converted to unlimited play on machines registered to a single account.

To maintain itself in good stead with the central billing system, the player did not have to be constantly connected to a phone line, but it did have to successfully contact the billing system every few weeks or so for a number of seconds. If this did not happen, eventually the player would block access to Divx playback until it did. The account the player was registered to had to be in good standing as well, with no declined debit or credit charges. If any inconsistencies were detected by the player, whether billing, communication, or hardware related, it shut down the player's Divx playback capability until such issues were resolved. Usually, plugging the player into a functioning phone line for a few minutes would correct the problem.

On July 7, 2001, all Divx user accounts expired, rendering the registered players incapable of Divx playback. Some players were automatically decommissioned, while others were left in a quasi-registered state where they dialed out constantly, trying to contact a billing system that no longer answered and no longer existed. Either way, the players no longer have the internal software settings that are necessary for Divx playback. Essentially, there are no authorized titles in the title table stored in the players memory (no valid keys) and the player is no longer authorized; either one is enough to prevent decryption.