Pegasys/TMPG and DivX Form Alliance

Gardena, CA – January 18, 2007 – TMPG, Inc. (www.tmpg-inc.com), the company that makes digital video easy, and DivX ( Nasdaq: DIVX), creators of products and services designed to improve the experience of media, have formed an alliance in which they will share selected technologies for incorporation in each others products.

“We are very excited to be working with DivX,” commented Kimi Matsuki, TMPG CEO on the alliance. “DivX software is downloaded millions of times every year and is recognized around the world for its advanced capabilities. The relationship will also add value to the TMPGEnc brand through the additional exposure we will receive. Our companies’ products are very compatible with each other. Users will benefit by the many advanced features our joint products will offer. We are looking forward to working with them on many projects in the upcoming years.”

Under the agreement, DivX will include authoring functionality from TMPG in the recently announced DivX Author software product.. The product allows users to create videos with advanced DVD-like features, including interactive menus, chapters and subtitles, that are fully interoperable with DivX Ultra Certified DVD players. The same DivX authoring functionality is also included in the recently introduced TMPGEnc DVD Author 3 with DivX Authoring software, an ideal, all-in-one DVD authoring solution.

“The combination of TMPG and DivX technologies is truly a win-win situation for anyone who wants to create, share and playback high-quality video with DVD-like features ,” stated Kevin Hell, CXO of DivX, Partners and Licensing. “Users now will have easy access to advanced features and capabilities that they previously would have had to download multiple programs to use, and the files they create will be fully interoperable with a wide range of consumer electronics products from a variety of manufacturers.”

About TMPG, Inc.
TMPG, Inc. makes digital video easy. Headquartered in Gardena, California, the company was established early in 2003, built on a solid foundation of technology developed by its parent company, PEGASYS, Inc. The company's two flagship products, the TMPGEnc video encoder series and the new TMPGEnc DVD Author, anchor a strong line of retail and OEM digital video editing and encoding products for home and professional users.

The recognized leaders in developing quality video encoding tools for MPEG applications, TMPG Inc.'s encoding technology is also incorporated into numerous commercial and professional video editing and DVD-creation software products. Applications developed by its parent, PEGASYS, have been bundled with quality products from top worldwide manufacturers, including Sony Japan and Pioneer Australia. For more information about TMPG, Inc. and its products, visit the company's website at www.tmpg-inc.com.

About DivX, Inc.
DivX creates products and services designed to improve the experience of media. Our first product offering was a video compression-decompression software library, or codec, which has been actively sought out and downloaded over 200 million times in the last four years, including over 60 million times during the last twelve months. We have since built on the success of our codec with other consumer software, including the DivX Player application, which is distributed from our website, http://DivX.com.

We also license our technologies to consumer hardware device manufacturers and certify their products to ensure the interoperable support of DivX-encoded content. In addition to technology licensing to consumer hardware device manufacturers, we currently generate revenue from software licensing, advertising and content distribution.

Forward-Looking Statements
Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, statements regarding DivX's visibility within the investment community. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause DivX's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, the risk that customer use of DivX technology may not grow as anticipated, the risk that anticipated market opportunities may not materialize at expected levels, or at all, the risk that the Company's activities may not result in the growth of profitable revenue, risks and uncertainties related to the maintenance and strength of the DivX brand; DivX's ability to penetrate existing and new markets; the effects of competition; DivX's dependence on its licensees and partners; the effect of intellectual property rights claims; and other factors discussed in the "Risk Factors" section of DivX's quarterly report on Form 10-Q filed with the SEC on November 13, 2006. All forward-looking statements are qualified in their entirety by this cautionary statement. DivX is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.
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Contact:
Carol Warren
Antarra Communications
o. 714.891.3660
cwarren@antarra.com

Bruce Lidl
PR Manager
DivX, Inc.
o 858 882 0815
m 619 857 6924
blidl@divxcorp.com

©2007 TMPG, Inc. All rights reserved. Specifications are subject to change without notice. All other trademarks are the property of their respective companies.