Why do we have different dvds and dvd players in the states than the rest of the world? Why do our players not play "ALL" dvd's?
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M$2 Answers
It's a fairly common thing that businesses will try to do if they can. For example, it's why airlines try to charge people travelling on business more than people travelling for pleasure, by offering a lower fare if the passenger stays a Saturday night at the destination.
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M$I don't know how well this has worked--after all, you can get region-free DVDs and DVD players, and pirates will still pirate movies here. But anyway, that's what the regions were all about.
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M$"DVDs advertised as ‘region free’ or ‘Region 0,’ particularly online, are often counterfeit."
http://www.which.co.uk/advice/spotting-fake-goods/pirate-dvds-cds-and-video-games/index.jsp
It's a tactic that won't work on pirated DVDs, only on legit DVDs that were intended for sale in a different market. Also many players can play DVDs from any region anyway.
So either they're not very bright, or the piracy argument is a convenient argument for stopping legit cheap imports.
Of course all businesses like to argue that cheap imports of their very own products are not legit, and their pharma pills or designer clothes should sell for different prices in different countries.
I don't really know all the factors that went into the decision to make regional DVDs. But I do remember the years after DVDs were invented that movie studios refused to release movies on DVD. The studios said that there weren't enough copy protections built in, and people were going to pirate them, etc. So the device manufacturers had to make a lot of compromises on copy protections before studios would begin releasing them.
Could there be ulterior motives? Sure. But I think the studios were legitimately scared that people were going to be mass producing movies and selling them to everybody for much cheaper than shelf prices.
And here's a fun story:
President Obama's gift of DVDs to Prime Minister Gordon Brown won't play in Britain. :)
http://www.techdirt.com/articles/20090319/1337464182.shtml
http://www.telegraph.co.uk/news/newstopics/mandrake/5011941/Gordon-Brown-is-frustrated-by-Psycho-in-No-10.html
Pirate DVD makers can make DVDs for any region, so if that was put forward as the argument, it sounds like a smokescreen.
It's just good old fashioned price discrimination and market segmention.