Regulator Challenges DVD Zoning

tahpot writes "The ACCC (Australian Competition and Consumer Commission) is about to challenge the DVD regional zoning system. The ACCC claim that the the system may breach the Australian Trade Practices Act. The ACCC claim that the zoning system prevents small film companies from distributing their movies around the world, with their sales generally too small to justify catering for region four. This reduces competition in the advantage of US studios." They've been thinking about this challenge for a while. Who knows if anything will come of it, but it can hardly hurt.

I want a law to force my business to succeed too!

The movie industry is different because the movies aren't launched at theatres in other countries than US until it has finished playing in the US

Oh waaaaah! Well, I can't work as a programmer for two or more jobs in different places at once either, so I want a law to prohibit other places from filling "my" programming job until I decide to come... and to not fill it even if I never come.

Why in the FUCK should the law be used to coddle emmasculated businesses that can't do their job right?

(due to the high production cost of the film rolls, and the translation/dubbing/texting involved).

(1) If they're not dubbed/translated, then it's not a problem because those people can't watch your movie anyway, right?
(2) As for costs? Pay up or shut up. No one cuts me a break on paying simultaneously on auto insurance for my 3 cars even thought I can only drive one car at a time.

MPAA==english speaking people only bigots?

If you are fluent enough in english to fully enjoy all movies in english, can't you just get region 1 dvd's and players only?

Isn't that a little unfair to people who don't want to/can't understand english well?

Would it be practical to get a region 1 player/dvds in say Peru? I realize this is not ligit according to the MPAA, but aren't laws supposed to be based on moral and practical precident, not made to shape it? Do English speakers enjoy an unfair advantage?

Re:I hope

Virtually all electronics shops here in Australia do sell multi-region players, and it is perfectly legal for them to do so. However, the local equivalent of the MPAA pressures them (and the hardware manufacturers) not to do so, so you often have to ask the staff in the shop for a multi-region player. The local distributor of one major Japanese hardware manufacturer opens the boxes containing imported DVD players, modifies them so that they are region-free and then reseals the box before sending them to retailers, so that the warranty is still valid. However, when asked by the media about this, it denies this practice, as it doesn't want to admit publicly that it is doing this and so annoy the MPAA equivalent.

In addition, I have seen threatening looking signs posted in shops that sell region 4 DVDs claiming that it is illegal to import region 1 DVDs. This is false. Placing such a sign in your store is very likely illegal under the same Trade Practices Act (which amongst other things, makes it illegal to tell lies in advertising). It is easy to buy region 1 DVDs over the internet from the US or the UK, and I do this all the time.

The ACCC has a very fine record of standing up for consumer rights. However its job is to enforce the law. I have far less confidence in the government itself, which gets to make the law. My understanding is that negotiations are presently going on with international copyright bodies to give us a DMCA like law in Australia, which might even make modifying a DVD player to be region free illegal under anti-circumvention provisions. I hope not, but it could happen. Michael.

Re:Not from the powerline

The NTSC color subcarrier actually overlaps the monochrome baseband signal. The design was done so that the harmonic sidebands of the quadrature modulated color subcarrier will have a minimum of mutual interference with the baseband harmonics, and the audio subcarrier which was fixed at a 4.5 MHz offset in the US. The color subcarrier was made to be exactly 63/88 times 5 MHz so it could be very tightly syncronized everywhere and still fit into all the constraints. There are 227.5 color subcarrier cycles per line, meaning the little bumps are offset 180 degrees in the next line, and less objectionable. The horizontal and vertical frequencies were then syncronized to the color subcarrier to control the artifacts.

Here [google.com] is a starting point for more info.

For its time, the design was quite good, considering the requirement that the color system must work on existing monochrome TV receivers, and fit in the existing TV channel, which had a "lopsided" modulation sideband pattern. It wasn't perfect, but it worked. Europe (except France) later adopted a different and somewhere better system that solved yet another problem (phase shifting in color syncronization). South American retrofited the European PAL system into their 525 line 60 Hz TV system.

Protecting ticket sales? Jack..... here's a clue

The system aims to protect cinema ticket sales by preventing people ordering DVD movies yet to be released in Australia.

Hey Jack Valenti. I have a free and open clue for you. Release the damned movie at the same time in Australia. And everywhere else.

It's a global world now. Back in BTI (Before The Internet), releasing a movie a year late in Australia would have no major consequences. People there didn't carry on daily conversations about all the things they love with people elsewhere in the world. But today, the world has changed, and you, Jack Valenti, need to catch up. You need the above clue so seriously.

Every movie that is released late in any part of the world isn't just going to suffer from world wide DVD distributions; it's going to suffer from world wide talk, and plot spoliers. Once a movie is out for a few weeks in the US, everyone will be talking about the ending (be it fantastic or utterly stupid) in the chat rooms, on the web boards, and in inter-office and intra-office memos of all the people working in international business. But among the participants will be people who live in regions where the movie hasn't even been released, yet. DVD won't be the only thing that can gouge into your precious first release theatre ticket sales. The Internet will, and you can't stop it.

But you can work with it. By simply doing world parallel releases, where each movie produced is released simultaneously in theatres in every country, then you'll beat even the Internet talk that can diminish your sales. And then release the DVD version later with yet another world parallel release.

Of course there will be difficulties with arranging that. As you should know, the movie industry is still entrenched with old BTI distribution methodologies that make a world parallel release difficult and costly. So change it. It only takes good leadership to steer the motion picture industry back on course into the future. Do you have it in you? Prove it to me. Or will I be watching "The Rise and Fall of an Industry: Major Motion Pictures" 10 years from now?

Re:I hope

The ACCC isn't trying to force US companies to produce Region 4 DVDs; they are making sure that Australians can view Region 1 DVDs.

In Australia (and, I presume, in other countries), movie distributors have been trying like mad to get legal recognition of the DVD regions. This would make it illegal to import non region 4 DVDs into Australia, and illegal to sell players modified to play non region 4 discs. At the very least, the distributors are colluding with each other to prevent the import of Region 1 discs, and sale of Region 1 players.

Region free isn't an option, as many region 4 players bork on region 0 marked discs. Don't ask me why. They just do.

This gives Fox, Sony, Columbia, etc, effective monopoly control over their respective parts of the DVD distribution market, and prevents the `little guy' from getting access to the Australian market. The Trade Practices Act bans this sort of behaviour; the ACCC is just making sure that distributors know this.

At this point, I've gotta be proud to be an Aussie.

Russ %-)

PS: as a side note, Russell Crowe is a New Zealander who just happens to have spent some time in Australia; Mel Gibson is an American who went to acting school in Australia, and most aussies are nothing like Paul Hogan. Given that we are in a australia + movie context, I just thought I should clear this up.

Re:This might set an example for Europe

If the EU would follow the Australian example (which is not unthinkable)

The EU Directorate General for Competition is currently examining this issue. I don't have high hopes, though, since they are only examining price differences. i.e., they won't bother with first sale, fair use or the difference between private and commercial conduct.

See here [eurorights.org] and here [eurorights.org]

"In this regard, I should inform you that the Directorate-General for Competition is currently examining the issue of DVD regional coding, and in particular whether this causes significant price differences to occur between DVDs from different regions. If any price differences cannot be explained by differing tax régimes, production costs etc., but are instead facilitated by the regional coding system, it would be our intention to examine whether such a system was a violation of EC competition rules."

Time for a two sided attack?

Maybe the side of the goverment that deals with cultral preservation might want to go in as well. Currently there are mnay DVD's made in Aisa that can not be read by typical players in Australia and that could denys access of thouse people to information about their past. Doing that just happens to be illegal in Australia and might even be illegal in the US. Will someone who wants to play Asian DVDs call the ACLU and claim that the MPAA's actions discriminate and might even fit under organized hate crimes?

Being an American in Australia, I am being isolated from my culture since American culture seems to revolve around real bad tv shows...maybe the ACCC will help. Now if they would get their act together about Telstra.... that would be real nice.

Big fish eats little fish

Finally things start appearing which show the legal inconsistencies of DVD regarding law (decrypting DVD's, financial irregularities) however due to the fact that the MPAA has a lot of "juice" involved with the whole monopoly of it all... *oops* control of it, I doubt Australians could make enough of a dent with their case, in fact I would think they'd be like mosquitos picking at a Moose or something similar.

Instances like this where a small market makes noise would quickly be hushed, what they should have done, is contact other countries facing similar problems with this and then make noise. And if all else fails!@

They could always throw Russell Crowe in the Gladiator suit and send him to set things straight for those "mates" down under.

Echelonomics 101 [antioffline.com]

Re:Australian Trade Practices Act?

The Act itself is fairly wide ranging, it covers things like price collusion, misleading advertising,anti-competitiveness, warranties etc. It basically is designed to protect the consumers rights over other entities. Here is a link to the ACCC summary [accc.gov.au] of the act. I think the main objection is that the region system artifically reduces choice for the consumer, and gives a competitive advantage to the major publishers/distributors.

Re:Parallel imports

Actually it is not illegal (in Australia) to modify a DVD player to make it multi region, it is only illegal if you modify it so that it will play pirated discs. This is similar to the situation with chipping Playstations. The Australian IT [news.com.au] has a more in depth article on this issue and also takes a look at DVD regions from the publishers side.

Not from the powerline

Actually, TV's do NOT get their "clock" from the powerline, they get it from the signal.

The original NTSC standard vertical frequency was 60.000Hz - this was done to minimize the effects of the power supply on the vertical retrace. For any given TV signal, the phase of the power line vs. the phase of the video signal would be a constant, and thus any distortion in the vertical scan due to the magnetic field of the power supply transformer would be constant from field to field, and thus much less objectionable than a wavery screen.

When the color subsystem was added to NTSC, the vertical retrace rate was changed to 59.99 Hz. (Don't ask me why, I don't recall off the top of my head).

This is not as much a concern on modern TVs: instead of a big wad of iron and copper transforming the power line at 60 Hz, the power supply rectifies the input to 300 VDC, and then uses a high frequency switching power supply to make the voltages needed from the line. The result is that you don't have the 60 Hz field off the power supply. As a result, an NTSC TV will quite happily run off 50 Hz (as long as the voltage is correct: remember that US power is nominally 120VAC, while UK power is nominally 240 VAC), and a PAL TV will run of 60 Hz (with the same caveat).

Parallel imports

It was recently ruled here in Australia that parallel imports of CDs and electrical goods were legal, and manufacturers/distributors could not penalise retailers who sold parallels in addition to 'official' imports. DVDs would obviously be included.

However, we also have relatively new legislation like the DMCA which makes circumvention illegal. If we have a multi region DVD player, that's fine. But it's illegal to modify the player yourself or for someone else to make it multi region, or even to buy a modified player.

Now I wonder how this new development will affect that law.


---

What the ACCC has to say on DVDs

I was actually at a Continuing Legal Education seminar the other day and Ross Jones from the ACCC was there. He had a bit to say on the DVD encoding and he made it sound like they were definitely going after it on a couple grounds. Firstly Australia has a worse selection of DVDs than the US, secondly there is evidence to suggest that region 4 DVDs are worse quality than their European and American counterparts. Also the encoding makes it difficult for consumers on holidays to places like the US to pick up DVDs legally and watch them here. Ultimately they see the region code as a matter of price discrimination and aren't pleased about it.

He also ran through the possible counter arguments and gave some defenses. The argument that the encoding prevents movies on DVD been released in the US before they get a cinema showing here is pointless now as the cinema releases normally run to close together to make a difference. He also suggested that as most music DVDs are region 0 its definitely not impossible for them to do this and even pointed out that not having to provide local content maybe cheaper.

I'm just happy to know that they will go after this because I'm sick of Australia having expensive DVDs and generally dodgy tech laws it also nice to see that they actually do know what they are talking about.... Oh and here is a link to the seminar material.. (its about 3/4 of the way down)
http://www.accc.gov.au/speeches/2001/Jones_Intel le ctual_Property_11_5_01.htm
or
Link [accc.gov.au]

Globalization

Region coding should be treated as an anti-competitive practice under WTO rules. If we have to put up with "global trade is good, even if it keeps wages down", it should apply when it keeps revenues down too.

It would probably violate an EU directive to have more than one region code within the European Union. That approach should be extended.

Re:I don't get it...

i think the article got accc's complaint a little mixed up. the complaint is probably not about australian filmmakers not being able to distribute their product around the world. they can always remove regional coding to do that.

the complaint is about the fact that how commercial product is always coded and that australia's region 4 gets short shrift on releases and availablity. so australia only gets 750 dvd titles versus north america's 5000+ titles and region 4 dvds are relatively expensive because of the smaller quantities and the 'protected' market.

Had Mr. Gareton posted, he'd get few mod points.

Mr Gareton said piracy was another concern, because a DVD made a good master copy - unlike VHS video, which degraded with each copy.

And this has what to do with region coding? Oh I forget we mix it into CSS so piracy protection == region coding. It has *nothing* to do with eachother, except in MPAAs smokescreen.

South-East Asia and China each had their own regions because of rampant piracy.

Well they can play their own pirated discs, but they can't export them around the world. But if there really were an international piracy organization, wouldn't you just buy a disc from each region to pirate??

Another reason was compliance with national censorship ratings. "The Australian release could have cuts of scenes with violence and sex," he said. "The distributor might be happy to release a movie in Australia as MA, but the original movie would have been an R."

And if that was the case, why not just make a different edition of the DVD. Then the censored one could be sold as MA rated. Not only that, but people would actually have the choice about getting the MA or R rated movie. Then you got two (2) versions of the DVD, not one for each region. And, regions != countries. Some countries might want the MA version, some the R version within the same region. What's wrong with choice?

Warner had conducted market research and consumers did not seem to have an issue with region coding.

Well, that depends on what consumers you ask. Of course the average buyer that picks up his Region X player and Region X top-sellers from his local shop won't know the difference until he a) Wants a movie not released in his region b) Moves to another region c) Try to borrow a friends' DVDs who has a region-free player and different region discs.

The issue of different formats for different regions was not new, because videos were released in either PAL or NTSC format, he said.

Uhh.. try again. I got a TV card that can capture in NTSC and PAL, a TV that can play NTSC and PAL, a video that can play NTSC and PAL. They started out as different formats due to the net current 50Hz vs 60Hz, but there's no longer any reason to have a difference (look at HDTV). Trying to use a n obsolete technical difference to justify an artificial content controlling difference is just plain rude.

Consumers keen to watch imported movies could always buy a second DVD player for the appropriate zone.

No comment. The stupidity of that speaks for itself.

Kjella

I don't get it...

I hate regioning as much as the next anime fan, but I don't quite understand how they have a case here. Can't these small outfits just make region-free DVDs?

Oh really?

The movie industry is different because the movies aren't launched at theatres in other countries than US until it has finished playing in the US

Really. So explain to me why

• "Jaws"
• "Taxi Driver"
• "The Godfather"
• "Close Encounters of the Third Kind"

all contain Region coding. (Are you getting the picture?)

If region coding was truly about theatrical release schedules, then movies that were released before 1996 wouldn't have region coding. No, region coding has been and always will be about trade restrictions and price gouging.

-------

I hope

That this will work, but I dont know what is going to put the MPAA in their place. What is to say that they wont just forget about zone 4?


The Lottery:

Godspeed, you convict spawn

I hadn't realized that Australia and New Zealand were in another region entirely from 1 and 2. If anyone is going to get this party started it will have to be folks like you and the quebecian francophones, who are really being hurt by the standard and have the clout to do something about it.

Unfortunately I doubt if it would be easy to get the ball rolling on region elimination here in the US that easily, simply because it affects us the least. Sure, there are a lot of snipey anime fans and foreign film buffs, but they don't have much clout. Those folks also know where to find multiregion players (although I challenge you to find one current DVD-equipped laptop that can be safely modified) And as evidenced by the fact that the MPAA managed to push through a feature that really only served them (region coding) on a foreign company (Sony) whose entertainment choices weren't even protected by the regions (anyone in europe can get them if they don't mind Japanese), it will be an uphill battle. So make some noise enough to attract the press.

cryptochrome

Re:Big fish eats little fish

Actually this could hurt the MPAA more than you think. You have to remember that governments have big resrouces, even governments of smaller countries (and Austrialia really isn't all that small). Also, governments have other kinds of resources. For example they can fine companies for violating their laws, etc (like France was considering doing with Yahoo). You can be that most of the heavy hitters that back the MPAA have Austrialian divisions.

Now I'm not necessairly saying this will do anything, however if a major country decides they don't like something, other nations will listen.

Re:Not from the powerline

When the color subsystem was added to NTSC, the vertical retrace rate was changed to 59.99 Hz. (Don't ask me why, I don't recall off the top of my head).

Actually I think it's 59.94 and I believe it was done on account of colour signals.

One big difference

I can legally dub a PAL video tape to NTSC. The equipment to do so isn't all that expensive, hoeever if you don't have it any pro video shop will bw happy to do it for a small fee, usually $5-$10. However I can NOT legally change the region of a DVD, at least not according to the DMCA.

Also "region coding" with NTSC/PAL is something I doubt you ever saw. Remember, it's a good mix of countries on 60 cycle and countries on 50 cycle (which is what determines which format you use). For a movie studio to decide not to release ina given format is to cut off a huge market. However it's a little different with region coding, they can decide to cut out just a certian cubset of countries.

Finally, the intent is different. The reason for the NTSC/PAL thing is first power timing, since a TV takes it's clock from the powerline and second differences in resolution (PAL is higher). This was just teh way things got developed. Region coding was developed SPECIFICALLY to let the movie industry make more money. This way they can decide when they want something introduced to a specific region and how much it will cost, and you can't import from other regions to get around this.

DVD Zone not respected in my country

It is interesting to note that DVD Zoning is not respected or enforced in the Dominican Republic. Here 100% of all DVD players and movies are Region 1 (U.S.), and yet since we're a spanish-speaking country we're supposed to be in Region 2.

Note only that, but there is no way anyone can force people to change, since it is a cultural thing here for everyone to buy things from the US (half the domininican population in the world lives in New York), and besides people here do not like being last in getting movies out. In the end, this only helps american movie distributors as Region 2 distributors are already obsolete here.

I have the feeling that this is the case also in many countries and the DVD Forum is blinded to this reality (which also affects their market perception, since they probably think for example that in the Dominican Republic DVDs have a low penetration rate since NOBODY buys Region 2 DVDs, while the reality is that in the middle and high classes VHS tapes are being quickly replaced by DVDs).

The bad thing is that many people here do not speak english, so it is VERY annoying having to buy Region 1 DVDs with no spanish subtitles, which in turn hurts the whole DVD phenomenom.

Proposal: We live in a GLOBAL economy, release the darn DVDs in a region-free state to ALL countries SIMULTANEOUSLY and avoid this control-freak stupidity.