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[jough]

Regarding the DVD Forum (the MPAA does not control this) and their region coding...

Having worked in the industry for two years around the time DVD was getting its legs (no questions about this "dark period" in my life when I was an upstanding citizen with a decent job, please) the PUBLIC reasons were to control distribution and marketing throughout six different "regions":

1. North America (USA, Canada, and US Territories)
2. Japan, Europe, South America, and the Middle East
3. Southeast Asia, including Honk Kong
4. Australia, New Zealand, Islands near them, etc.
5. Eastern Europe, Russia, India, Africa, and North China (Mongolia)
6. People's Republic of China (aka Red China)
7. Reserved (for antarctica, perhaps?)
8. Special Purposes (cruise ships, airplanes, blimps, etc.)

You don't really see region 7 or 8 discs very much, and there is also a Region "0" which is "All Regions."  That one is reserved for porn, small companies, and others who can't afford to make different versions of their discs.  Criterion put out some early Region 0 discs before deciding to focus solely on Region 1.

Region 1 generally receives better special edition releases than other regions, although it varies.  Reg. 1 certainly gets *more* releases than any other region, but most media companies run their continental divisions as nearly completely separate companies, and Fox Europe kicks Fox US's ass generally when it comes to transfers.

And actually Canada, while still region 1, often has different licensing issues, like most Time Warner/New Line/Universal discs are pressed and produced by Alliance/Atlantis or TLA there, which results in the horrid transfers but excellent special edition contents of recent titles like "Far from Heaven" and "The Pianist".

Piracy of course runs rampant, and pirates can easily make Region 0 titles for sale anywhere in the world.

The main reason for region encoding is to prevent cheap DVD sales from cannibalising the offshore theatrical window.  Since most films open in foreign countries (foreign from Hollywood's perspective) they want to be able to extract as much as they can from those other huge markets.

It's all about the Benjamins.