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Artificial Restrictions

I assume you, the reader, know about the advantages of the DVD format - better picture and sound quality than VHS, fully digital (doesn't degrade over time), various additional features on many DVDs, etc.
If you own a DVD player yourself, you will also have learned about various artificial restrictions so far. And maybe you have been wondering about why they are there. Well, simple answers first: They are there because for all we know, the CSS license requires that all players follow them.

Unskippable Ads

You will surely have noticed those non-skippable FBI warnings at the start of many DVDs, right? Let's for a second ignore the fact that the FBI means nothing to, say, a canadian (also DVD region 1).
I speculate that it will not be long until the FBI warning gets either replaced by or enhanced with - advertisement. What a great marketing opportunity! It is virtually guaranteed that people will look at the ads because they simply don't have a choice.
Will that mean that DVDs become free or very cheap, payed for by the ads much like television? Don't hold your breath.
Update: It's already happening. I've been told that the DVD of "The Best One Ever" contains an unskippable ad for RCA.

Region Coding - Price Fixing

The worst offender is region coding. DVD CCA has divided the world into six regions, and DVDs you buy in one region can only be played in that region (actually: On players purchased in that region). Because you just might be moving to a different country, most hardware allows you to change the region code - five times. After that, you've had it.
But what does this mean for you, as a DVD customer? It means that you can not buy DVDs in your holidays and be sure that they will work at home. Relatives or friends from abroad better not send you DVDs as presents, because they will likely not work. And if you are a fan of something that is not readily available in your country/region (US original releases for europeans, or maybe anime movies for americans, etc.) - well, you're just out of luck.
But there is another, more subtle and more yet more direct effect. It's called "price fixing" and is illegal pretty much everywhere on the planet. It means that a consortium of sellers keep prices artificially high by some kind of agreement between themselves.
Of course, the MPAA has too many lawyers to do that kind of stuff. What they instead do is use region coding to make sure that neither you nor your reseller can import DVDs from where they are cheaper. Take a look at these examples:
spot a system there? Let's not shoot too fast, because there are also some exceptions:
But you can nevertheless verify yourself that US titles are usually much less expensive than european titles. For foreign-language versions, there might be a reason, but the above titles are all english.
Do you believe that shipping costs this much, or that there are no DVD manufacturers at all in europe? Not likely.
Ockham's Razor says to go with the most simple answer. If there is a more simple one then "they do it because they can", then tell me. For the time being, this smells a lot like price-fixing. DVDs are more expensive in europe because there is no way for europeans to get them cheaper. It works much like CD prices, just worse because there is no way to avoid this kind of robbery.

Oh, btw. - if you just rejoiced because you live in the US and are getting everything cheaper, think again. My american friends tell me that they are robbed in a similiar way for foreign titles, for example japanese anime.

Region Coding - Market Segmentation

In addition to different prices, there are also different distributors in various parts of the world. For example, "Titanic" is distributed in america by Paramount, but by 20th Century Fox everywhere else. So region coding is the movie corporations way to divide up the market.
Did you just say "competition"? Well yes, that is the idea of a free market, but see: Free markets are bad for the bottom line, so you really can't blame the movie mafia to do away with them...

Region Coding - Release Delays

Since imports are impossible due to region coding, the movie corporations also delay foreign releases until a time they consider appropriate - usually one where they expect the most returns. While it is entirely their business if and when to release their stuff to a market, that is by far not a reason to make it impossible for everyone in that market to go out on his own and get hold of the title somewhere else. While delays are usually only a nuisance, some very good movies are never released at all in certain markets. So unless you go with the mainstream, DVD CCA basically tells you to drop dead.

Region Coding - Illegal?

Due to these problems, region coding is considered questionable by almost everyone not working for a big movie company. And it has, in fact, been declared illegal in New Zealand and is apparently under scrutiny in Switzerland and recently in australia..
How long will it take for other countries to wise up?

No More Fair Use

Copyright law tries to strike a balance between author rights and public gain. The basic equation is this: Give authors so much that they will continue to produce something for the general public. The emphasis is (or should be) where I put it, on the public. That is why copyright expires and the copyrighted work enters the public domain, and that is why copyright allows for exceptions, called "fair use". The most-well known are educational use, reviews or private copies.
Large corporations, and the movie studios at the very front, have successfully perverted copyright last century, with the copyright length extended more and more. Since World War II, no major copyright work has entered the public domain.
Repeat: Since WW2, no major copyright work has entered the public domain! Copyright has in effect become perpetual posession instead of the "limited right" it should be according to law.
However, the restrictions on DVDs make even more fair-use applications impossible. You can no longer make a copy for yourself or a friend (both perfectly legal, at least where I live), and it is extremely difficult to get snippets for a review, or to hand out in a classroom.

So what is going on?

Greed, most obviously. Every point above boils down to more money for the big movie corporations. You can't skip the ads, so they're worth much more than those on, say, VHS tapes. You can't import DVDs, so you can be charged whatever the local distributor wants to charge you. You can't make backup copies, so you'll have to buy another DVD if the old one breaks.
But there's also a non-money side to this: Control. The CSS issue has made it very clear that DVD CCA and MPAA will not tolerate DVD player software that is not subject to the terms of the CSS license. In other words: That they have no control over.
More paranoid speculations suspect that the movie corporations want to put us all on a rent basis, where we can not buy a movie once and watch it as often as we want anymore, but will have to pay for every time we see the movie. DivX was a first (failed) attempt, but most of the requirements of a rent system are present in DVD technology. It's lacking only a subscriber system. Should not be difficult to add...