Dvd Regional Coding Not Working

Home video retailers, theatrical exhibitors, and retailers are seeing red over ineffective regional coding on DVDs that they say is upsetting distribution patterns.

While suppliers have placed regional coding on discs to protect theatrical release windows, many European consumers are bypassing the restriction with inexpensive "debugging" devices that allow DVDs sold in the U.S. to be played on their machines. As a result, many are purchasing DVD titles before they are released in theaters.

Responding to the growing clamor from the trade, some Hollywood studios are attempting to beef up the DVD regional-coding system to lessen the impact of imports from North America on local markets.

"Hollywood has finally woken up to the scale of the problem," says Bob Augur, managing director of video and DVD authoring house Electric Switch.

Some research estimates that approximately 45 million Region One DVDs had been imported from the U.S., with half sold in Europe and the remainder sold in the rest of the world.

To curtail the problem, some suppliers are incorporating the Regional Code Enhancement (RCE) on some Region One discs sold in North America to make them unplayable on modified or "chipped" machines in other territories.

While it is unclear which discs will include the enhanced code, Columbia TriStar Home Video's "The Patriot" is believed to carry it. But executives at the supplier would not confirm that the title has the RCE.

Video retailers in the U.K. welcome the code, since some estimates say that imported Region One discs represent 15% to 50% of the total U.K. DVD market.

The availability of Region One discs has even forced some retailers to adjust their businesses. Bryan Welsh, managing director of U.K.-based Internet retailer DVDplus.com, for example, says his company was forced to move to an "E-tip" business model, where consumers leave a tip based on the quality of service (see story, page 99). The site moved to the tipping model to compete with Regional One E-tailers such as Canada-based DVDboxoffice.com. In addition, DVDboxoffice offers free shipping worldwide and prices product in 19 different currencies.

Tower Records head of video, computer games, and books Tara Gordon says the new code will help the sale of Region Two discs sanctioned for the U.K. "The regional coding will take a while to take effect, but I think that in about three to four months we will see a significant increase in Region Two sales," she says.

However, Chris Jenkins, editor of Britain's Total DVD, is convinced that the code is "a last-gasp" attempt to stem the tide of Region One DVDs and will have little effect.

"I've already had an E-mail from a reader saying that he has got a Region One copy of 'The Patriot' and it plays fine on his modified Pioneer DVD player," Jenkins says. "I believe all that is happening is that companies are attempting to use the system already employed by labels such as Disney."

Buena Vista Home Entertainment Europe senior VP Rob Jongmans confirms that the company is considering incorporating the enhanced code on Region One DVDs, but a decision hasn't been made.

"The real issue we are facing is that eventually we have to synchronize release dates between Europe and the United States," Jongmans says. "This is not going to happen overnight, so we are going to be stuck with coding product for a while."

But Warner Home Video VP of marketing Steve Nickerson downplays the whole issue. He says Warner has not put enhanced coding on any product but is testing the process, which seems to work so far.

"I don't know if this is that big a deal," he says. "This is another way to do regional coding in the authoring process, but we haven't changed any of our policies with regard to imports, and we still discourage Internet retailers from selling outside of their territories."

He says that regional coding is required by censorship standards and regulations in certain territories, a situation that is unlikely to change. "People may not like them [the regional codes], but that is what is required at the moment," he says.

Nickerson also isn't convinced of the size of the market for Region One discs in overseas territories and points out that consumers want local-language product, which often isn't available on Region One discs. Most Region One discs have Spanish subtitles, with a few listing French subtitles as well.

The Internet-savvy, however, remain eager as ever to get their hands on Region One product. At the dvdtimes.co.uk site, for example, there are several remedies posted to play discs with the enhanced code.

"Looks like the code implementation here may have been a waste of time and money on Columbia's part," says site editor Colin Polonowski. "And it's made very little difference to almost every multi-region DVD owner in the country."