Purpose
Region coding has several purposes, but the primary one is price discrimination, i.e., allowing the manufacturer to charge different prices in different regions: there is great disparity among the regions of the world in how much a person is willing to pay for a DVD. Price discrimination is especially relevant to DVDs as their marginal cost is relatively small, allowing the distributor a great deal of flexibility in pricing.
Another purpose is controlling release dates. A practice of movie marketing threatened by the advent of digital home video is to release a movie to cinemas, and then for general sale, later in some countries than in others. This is common partly because releasing a movie at the same time worldwide can be prohibitively expensive. Videotapes were inherently regional since formats had to match those of the encoding system used by television stations in that particular region, such as NTSC and PAL, although from early 1990s PAL machines increasingly offered NTSC playback. DVDs are less restricted in this sense, and region coding allows movie studios to better control the global release dates of DVDs.
One other purpose of region coding is to prevent release of movies that could be offensive in such regions for cultural, religious, and political reasons. Region coding helps prevent release of such films in sensitive territories.
Finally, the copyright in some titles has different owners in different territories. Region coding allows copyright holders to prevent a DVD from being purchased from a region from which they do not derive royalties.
Read more about this topic: DVD Region Code
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