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by shmerl 3399 days ago
The way I understand it, historically geo restrictions originate from physical goods, and are usually driven by distributors, who want to reduce competition and control certain regions. I.e. in order to monopolize the market, they require those who produce some goods to restrict distribution through them only for that region, and in return they offer better pricing and assistance in that distribution. I.e. this basically makes it impossible to make global distribution rights.

This logic falls flat however in the digital world, where distributor isn't limited by region. I.e. you can open a digital store, and sell worldwide (like for example computer games stores like GOG, Steam and etc.).

So in the pure digital world, geo restrictions sound like nonsense, since they reduce reach and profits, both for creators, and distributors. My guess is, this creeps into the digital sphere, because of the influence of physical distributors, who see digital ones as a threat to their local monopolies. I suppose strong grip of some regional cable TV companies, forces creators to limit their distribution through any digital stores as well. The problem is, this approach is pretty nasty when applied in the digital space. It basically becomes xenophobic. Translating it back to physical goods, it can look like this: https://www.youtube.com/watch?v=WbiacSD13qk

Hopefully, the weaker regional monopolists will become, the more likely we'll have global distribution for video too.

1 comments

I think it also has something to do with price discrimination. A seller can maximize profit if they can come closest to charging the maximum the buyers are willing to pay. So for goods where the cost to make a copy is negligible, such as media and books, the ideal pricing strategy is to sell the product at different prices to different markets, hence why you see versions of the same textbooks being sold for $10 in Asia when it's $200 in the USA.
This is also problematic in a digital store. Imagine someone from USA coming to Asia to buy a book, and they refuse to sell it, or require to charge more based on the citizenship and so on. It sounds ridiculous, but that's what happens in digital now both with regional pricing, and geoblocking. In short, applying physical geo based logic in the digital space can lead to unethical and ugly results, because of its non physical nature.