[MzHN]

Honest question, why does region locking exist?

Usually it's all about money, but what is such a strong incentive that makes it sensible to decline getting money from customers?

Laziness? Local laws? Some complicated scheme where it costs more money than it makes?

[solatic]

Basically because of the division between publishers and distributors.

Publishers make deals with different distributors in different countries, and some (many) of these distribution deals are exclusive. For example, Universal signs a deal with a UK channel that includes the exclusive right to distribute in the UK. These exclusivity deals are mutually beneficial - Universal has less deal-signing overhead in dealing with fewer distributors overall, besides the additional exclusivity royalties paid to Universal, and the distributor benefits because exclusivity makes their platform more attractive to end-consumers, who are now forced to deal with that distributor in order to watch that film.

Meanwhile, a streaming distributor (i.e. Hulu) comes to Universal and shows interest in distributing the film as well. Universal tells Hulu, that it'll sign a distribution deal, but this deal must not violate any of the other dozens or hundreds of distribution deals that Universal already signed, so that Universal won't violate its preexisting agreements. Streaming distributors need to figure out exactly which films can be distributed exactly where; for many films from many distributors with non-standard agreements in many regions, this is a non-trivial problem to solve.

Many distributors - like Hulu - make the business decision not to solve it at all. Hence, region locking.

[lotsofpulp]

I think it's because of price discrimination. Same reason why there are "international" versions of text books.

https://en.wikipedia.org/wiki/Price_discrimination

If you have a good whose marginal costs is very small, then once it has been created, the optimal method to sell it is to sell it to each person for the maximum amount they are able and willing to pay. Obviously, people in poorer countries aren't able to pay as much as people in richer countries, so by creating different versions for them, the seller can maximize revenue, but only if the people in richer countries aren't able to obtain it at the cheaper price.

In a way, this is good for poorer countries as they can obtain the goods at a cheaper price since the alternative might be that the seller simply abandons the market.

[solatic]

The original exclusivity deals between publishers and legacy distributors, of course, are not for standard prices. Different distributors in different regions are able to pay different amounts - largely, the distributors in richer regions are able to charge more and pay the publisher more than distributors in poorer regions.

Regardless, streaming distributors still need to work within the framework of the pre-existing deals that the publisher has already committed to.

[anoncake]

> the optimal method to sell it is to sell it to each person for the maximum amount they are able and willing to pay.

The optimal method for minimizing the consumer surplus.

[ksk]

Because some countries don't allow certain types of media to be accesses/broadcasted/consumed. If a streaming/broadcasting business wants to operate in that country they will have to follow the local laws.