A History And Possible Future Of Cinema

Or: Region Coding In Its Proper Historical Context


    Ask any number of consumers what their least favourite aspect of DVD Video is, and chances are that you will get the same response from all of them - Region Coding. Indeed, with the numerous examples of films that have been presented with substandard quality transfers in this country, it isn't hard to imagine why such a programming method is frowned upon. Myself, I make no secret of the fact that I feel it is nothing more than an attempt to force inferior products upon a specific market. However, when you look at both the history and the future of the film industry, there is every reason to believe that Region Coding is really just a temporary measure that will become extinct as soon as cinema and distribution become digital.

    To understand exactly why the consortium that has been responsible for the development of the DVD format insisted that Region Codes had to be included as part of the DVD Video specification, we must go right back to the very early days of cinema. Over the course of this article, we will cover the distribution models of the past and present, as well as some possible examples for the future.

Cinema And Celluloid - The Outdated System Of The Past

    The first thing one has to understand is that not only are films very expensive things to make, in spite of what turkeys like Plan 9 From Outer Space would have you believe, they are also very expensive to distribute, not to mention the fact that film distribution is currently a very unwieldy and complicated process that uses technologies which have been conceptually obsolete for at least the past twenty years. Presently, the only way to distribute a film to theatres is to create release prints on several reels and send a copy to each theatre in a given country it is playing at.

    Using Gladiator as an example for the sake of argument, one has to bear in mind that at a cost of $2,500 US apiece ($4,500 Australian), 3,355 prints of this movie were needed to cover the screens it was showing on in the US and UK when it opened, much less the number of prints needed to cover the rest of the world. That's over $15,000,000 (Australian) tied up in film reels alone. This is before we've even begun to talk about the costs involved in putting each release print onto a truck to be shipped to each cinema, and the cost of making sure it gets to them in playable condition. When you consider the cost of making a release print for each cinema in the world, it simply adds up to too much money for the film studios to make any money at all, leave alone a serious profit. The solution to this problem is, of course, staggered release plans, where the studio releases a film in one country first, and then uses the same prints for cinemas in other parts of the world.

    Of course, one of the problems with this kind of release scheduling is that countries that are further down on the distribution list tend to receive prints that are not in the best condition. While we are relatively unaffected by this in Australia, non-English speaking countries that generally figure last on the distribution lists get a lot more film artefacts with their picture by the time it is released there. At least now you know why the best time to see a film is on the day of its release, or as close thereto as is humanly possible.

    Unfortunately, not even a corporation as large as Sony, the parent company of Columbia and Tristar Pictures, can be everywhere at once. The film studios need to set up a distribution system on both a national and international scale, allowing for an orderly dissemination of the film worldwide, with local censorship, dubbing, and subtitling requirements taken care of. This distribution system is comprised both of local subsidiaries of the parent company, such as Columbia Tristar Home Video, as well as some independent operators, such as Dendy Pictures and Siren Entertainment. As things currently stand, the system can only operate as fast as the slowest link in this distribution network, and this has resulted in a number of embarrassing situations where a film has been available on home video in America before getting a theatrical release in Australia.

VHS And Betamax, or The Dawn Of Home Video

    Things started to get very complicated when home video cassette recorders were about to appear on the market. As a matter of fact, movie studios made an attempt to sue Sony in order to prevent the VCR from ever appearing. Obviously, they failed, and the idea that the home consumer could borrow films from a local lending library in much the same way as they were able to loan books was on the horizon. The discovery that films on video cassettes sell rather well resulted in numerous rental libraries being set up across the world. Of course, the film studios disliked this a great deal, since they gained no revenue from the rental release of their films. To solve this problem, the idea of rental windows was conceived, with a six-month rental window where the price of the video was in excess of $100 before being lowered to $20 for the sell-through version.

    When the battle between VHS and Betamax to become the standard home video format was all but over, another problem emerged from the home video world that drew the ire of film studios: piracy. Hooking up one VCR to another and making a recording from a VHS tape is a relatively simple process, as is making a recording from a television broadcast. While the average consumer was not about to start making mass production runs of illegal duplicates in their basement, the tendency of the average consumer, particularly in places like Australia, to want to get something as cheaply as possible ate a sizeable hole in the revenue of both the rental libraries and the film studios. It was quite a common practise in those times to rent a film on VHS from the local rental library, make a copy of it, and then watch the copy whenever entertainment was needed.

    Of course, one advantage that the retailers had over the consumer was that VHS is a home video format with a very short shelf-life. Not only was it impossible to make a VHS tape over a certain length without the rising possibility of tape breakage through normal use, it was also impossible to play the VHS cassette repeatedly without progressive degradations in the video and sound quality. Of course, consumer anger over the short shelf-life of the VHS cassette was tempered by the fact that, Laserdisc notwithstanding, there simply wasn't a better alternative. Until recently.

The Internet And DVD Revolutions

    In the mid-1990s, the publically-funded communications project of the American Defense Department exploded into mass public usage, with numerous citizens who had never before glimpsed at a computer suddenly coming to grips with the logistics of digital communication. Suddenly, it was possible to discuss music and video with users halfway around the world, and consumers became more conscious of the differences between VHS cassettes pressed in Australia and America. Display devices capable of accepting both PAL and NTSC signals came onto the market, as did VCRs capable of outputting both signals. The world had suddenly become a very small place where it was just as easy to order a compact disc containing Iggy Pop's greatest hits from an online retailer in America as it was to travel to a local record store and order the disc. For a man with tastes as esoteric and hard-core as mine, it was even easier to order and trade music over the Internet simply because local retailers had become rather narrow-ranged and monopolistic in nature.

    Then, the greatest thing to happen to home theatre since the concept was even thought of took place: the DVD revolution. Suddenly, we were blessed with a home video format that could store an entire film on a single disc that was the size of the compact disc we were introduced to in the 1980s, but carried at least eight times as much information. Although some minor teething problems occurred when the format was introduced, the DVD Video format has been embraced by both the film studios and the consumer, with some qualifications on the part of the latter. At long last, there was a format that could display a film in its proper aspect ratio with decent image quality, with a cinema-like soundtrack. Unfortunately for the studios, the combined revolutions of the Internet and DVD Video made it possible for a consumer in Australia to order a film from America before it had begun its Australian theatrical run, e.g. Chicken Run. Suddenly, decades worth of distribution deals and billions of dollars were at stake.

    The DVD Consortium, to which numerous film studios belong, panicked at this situation and adopted an attempt at a solution that was futile for reasons I will get into shortly. That solution was what we call Region Coding, a system in which players and discs are allocated codes according to the part of the world in which they were destined to be sold. For those who don't already know how it works, the basic principle is that the player checks the disc for what Regions the disc is allowed to play back in. If the allowable playback Regions encoded onto the disc do not match the player's region, then the player will refuse to play the disc. The primary reason why this solution to the distribution problems is futile is that modern-day consumers, and DVD enthusiasts in particular, are far more concerned with getting the best value for their dollar and are less likely to accept inferior products such as the Region 4 versions of Scream and The Thing. Subsequently, multizone DVD players are the norm rather than the exception in non-US countries.

    The upshot of all these things is that the current film and home video distribution system has been overtaken by technology and is now grossly outdated. Not only is the current system a great deal more complex than it really needs to be, the demand for a single release date the world over could put numerous film studios and distributors out of business if it goes unheeded. This, naturally, brings me to speculations about the future of film and home video distribution.

The Future - A Better Deal For All Involved?

    The first question to ask when speculating about the future of cinema and home video is what the studios actually want. The simple answer to this question is that they want to have complete control over their multi-million dollar assets, including the distribution of their films. The coming advent of digital cinema will help in this regard, since studios will be able to send their films to theatres as data instead of as a collection of unwieldy film reels. With their films converted entirely into digital form, the film studios would be able to bypass the network of distributors that has outlived its usefulness, as well as local video rental outlets, and sell their products directly to Jack and Jill Videophile. Region Coding would no longer be necessary as it would be financially possible to distribute films so that they have the same release date the world over, as opposed to the current staggered schedules that exist now. Without the need for local distributors, all of the revenue earned from the sales of a film would go straight to the studio that made it in the first place. In this sense, it is a win-win situation for the consumer and the film studio, with the only losers being the middlemen that were previously integral to film and home video distribution.

    Obviously, the middlemen are the first major hurdle that needs to be jumped in order to make this vision of the future a reality. If you look at the current release schedules for films on DVD Video, you will notice that the largest of the major film studios are completely ignoring the rental windows that were part and parcel of the VHS distribution system. There has been some rather serious noise about this already from the video rental libraries, with many of them grasping for reasons to put down the DVD Video format to consumers without openly admitting that their primary reason for doing so is that the format is a foretelling of the end for their business. Once digital cinema becomes a reality, it will necessitate the transfer of all existing films into high-resolution digital form, and a whole new world of film and home video distribution will evolve from there.

    Another fly in the ointment is that film studios like Warner Brothers and Columbia Tristar do not want Jack and Jill Videophile to actually own movies, as such. Instead, they want us to pay every time we watch it, which is why many of them originally supported the older Circuit City DiVX format. Of course, consumers will never support this sort of business practise, which brings me to my own Utopian model of film distribution's future.

    In my vision of the future, films will first be released to digital cinemas on a single worldwide release date for however long it takes them to wear out their welcome. Then, in store-fronts set up by the film studios, the films would be made available on a worldwide database from which the customer selects the film they want, pays their money, and then has the disc, case, and slick pressed on-site while they wait. Obviously, this model of the future is a very hopeful one, but I am sure you'll agree with me that both the consumers and the film studios would gain the most from it.

Closing Remarks

    When the history and future of cinema are viewed together, it is obvious that Region Coding made sense to the film studios at the time it was adopted, in spite of the fact that they were obviously thinking in terms of their old business models rather than embracing the new ones. It has to be borne in mind that the film studios simply wouldn't have supported the DVD Video format if it weren't for Region Coding, even if it is an authoritarian practise that has only drawn the ire of home theatre enthusiasts around the world. It helps, however, if you think of it as a phase in the shift from the old methods of film distribution to new ones, and it is highly unlikely that it will be necessary once the simultaneous worldwide releases afforded by digital cinema become a reality.

© Dean McIntosh (my bio sucks... read it anyway)
December 29, 2000