In 2000, a commercial file format known as DivX was released. The development of DivX was an attempt to compress and distribute DVD quality video content over the internet.
In early 2001, a group of enthusiastic released Xvid as an alternative, open source file format to DivX. Xvid was a collaborative effort of the open source community to create a widely used and freely available codec to proprietary solutions.
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@textovervideo The name #xvid as name reversed from #divx I think was really clever and suited it's purpose and development.
