The European Union launched an investigation into DVD pricing in Europe Monday. Specifically, the system of region coding has come into question as a possible means of unfair pricing.
Part of the DVD specifications outlined as part of the format is a region coding to be included on discs. Countries selling DVDs are divided into six regions (North America being Region 1, Europe Region 2, etc.) DVDs encoded for a certain region could only be played on players designed for playback in that region.
Film companies maintain that the current system of dividing the world into six regions makes it easier to combat piracy and to manage royalty collection. But that system has led to DVDs in some countries being priced 50 percent to 75 percent higher than in other countries. For instance, DVD movies in Europe and Australia are generally priced between $32 and $45, compared with average retail prices of $20 to $26 for the same titles in the U. S.
Although the probe is investigating European pricing, Hollywood studios are the most effected by the probe. So far, Disney has agreed to cooperate fully, and other studios are expected to do the same soon. Although it’s unlikely that region coding is going to disappear anytime soon, the potential effect on the studios may lead to some economic changes in DVD sales in the future.