Motion picture studios want to control the home release of movies in different countries and because cinema releases aren't simultaneous (a movie may come out on video in the U.S. when it's just hitting screens in Europe and vice-versa). Also, studios sell distribution rights to different foreign distributors and would like to guarantee an exclusive market. Therefore they required that the DVD standard include codes to prevent playback of certain discs in certain geographical regions. Each player is given a code for the region in which it's sold. The player will refuse to play discs that are not coded for its region. This means that a disc bought in one country may not play on a player bought in another country. Some people believe that region codes are an illegal restraint of trade, and indeed in Australia DVD players are now sold with no regional coding allowing Australians to enjoy the vast library of DVD discs from around the world without any modification's to their DVD players.
Regional codes are entirely optional for the maker of a disc. Discs without region locks will play on any player in any country. It's not an encryption system, it's just one byte of information on the disc that the player checks. Some studios originally announced that only their new releases would have regional codes, but so far almost all Hollywood releases play in only one region. Region codes are a permanent part of the disc, they won't "unlock" after a period of time. Region codes don't apply to DVD-Audio, DVD-ROM, or recordable DVD.
Seven regions (also called locales or zones) have been defined, and each one is assigned a number. Players and discs are often identified by their region number superimposed on a world globe. If a disc plays in more than one region it will have more than one number on the globe, an example is Black Hawk Down - Superbit Korean Edition, this multi disc set plays in region's 1,3 and 4.1: U.S., Canada, U.S. Territories
2: Japan, Europe, South Africa, and Middle East (including Egypt)
3: Southeast Asia and East Asia (including Hong Kong)
4: Australia, New Zealand, Pacific Islands, Central America, Mexico, South America, and the Caribbean
5: Eastern Europe (Former Soviet Union), Indian subcontinent, Africa, North Korea, and Mongolia
8: Special international venues (airplanes, cruise ships, etc.)
Technically there is no such thing as a region zero disc or a region zero player. There is such thing as an all-region disc. There are also all-region players. Some players can be "hacked" using special command sequences from the remote control to switch regions or play all regions. Some players can be physically modified ("chipped") to play discs regardless of the regional codes on the disc. This usually voids the warranty, but is not illegal in most countries (since the only thing that requires player manufacturers to region-code their players is the CSS license). Many retailers, especially outside North America, sell players that have already been modified for multiple regions, or in some cases they simply provide instructions on how to access the "secret" region change features already built into the player. As an interesting side note, on Feb. 7, 2001, NASA sent two multi-region DVD players to the International Space Station.
Extensive information about modifying players and buying region-free players can be found on the Internet.
In addition to region codes, there are also differences in discs for NTSC and PAL TV systems.
Some discs from Fox, Buena Vista/Touchstone/Miramax, MGM/Universal, Polygram, and Columbia TriStar contain program code that checks for the proper region setting in the player. (There's Something About Mary and Psycho are examples.) In late 2000, Warner Bros. began using the same active region code checking that other studios had been using for over a year. They called it "region code enhancement" (RCE, also known as REA), and it received much publicity. RCE was first added to discs such as The Patriot and Charlie's Angels. "Smart discs" with active region checking won't play on code-free players that are set for all regions, but they can be played on manual code-switchable players that allow you to use the remote control to change the player's region to match the disc. They may not work on auto-switching players that recognize and match the disc region. (It depends on the default region setting of the player. An RCE disc has all its region flags set so that the player doesn't know which one to switch to. The disc queries the player for the region setting and aborts playback if it's the wrong one. A default player setting of region 1 will fool RCE discs from region 1. Playing a region 1 disc for a few seconds sets most auto-switching players to region 1 and thus enables them to play an RCE disc.) When an RCE disc detects the wrong region or an all-region player, it will usually put up a message saying that the player may have been altered and that the disc is not compatible with the player. A serious side effect is that some legitimate players fail the test, such as the Fisher DVDS-1000.
RCE regional Coding has been defeated and does not represent a problem for those who wish to invest in Multi-Region DVD players.
In general, region codes don't apply to recordable DVDs. A DVD that you make on a PC with a DVD burner or in a home DVD video recorder will play in all regions (but don't forget NTSC vs. PAL differences, Region codes do not apply to DVD-Audio.
Regional codes apply to game consoles such as PlayStation 2 and Xbox, but only for DVD-Video (movie) discs (see DVDRegionX for region modifications to PS2). PlayStation has a separate regional lockout scheme for games. Regional codes also apply to DVD-ROM computers, but affect only DVD-Video discs, not DVD-ROM discs containing computer software. Computer playback systems check for regional codes before playing movies from a CSS-protected DVD-Video. Newer RPC2 DVD-ROM drives let you change the region code several times. (RPC stands for region protection control.) Once an RPC2 drive has reached the limit of 5 changes it can't be changed again unless the vendor or manufacturer resets the drive. The Drive Info utility can tell you if you have an RPC2 drive (it will say "This drive has region protection"). Since December 31, 1999, only RPC2 drives have been manufactured.
Hope this Guide helps someone.