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Every DVD and DVD player have a special code built into them that identifies where the player or disk is supposed to be used; this is called their DVD region code. These codes allow movie companies to control the sale and distribution of their products. The code system is intended to prevent people from purchasing a movie in one region and sending it to another in advance of the movie's release in that area. The DVD region code system has received criticisms from many copyright groups and world governments. These groups feel the region codes are unnecessarily restrictive, especially when a movie is available in one region but not scheduled for release in others.
Originally the DVD region code was not meant as a method of controlling distribution, but as a way of preventing people from buying movies they wouldn't be able to watch on their DVD players. Movies that are intended for a North American audience, for example, are encoded in National Television System Committee (NTSC) format, and ones intended for Europe are encoded with Phase Alternate Line (PAL) formatting. These formats determine how many frames per second are displayed, the video's aspect ratio, sound options and several other factors. While most PAL systems can play NTSC encoded disks, there aren't any common NTSC systems that can play PAL disks. By using two different regions for movies, the companies could keep formats where they belonged.
There are six true regions that divide up the world between NTSC and PAL encoding. The divisions are complicated, and some countries have access to both coding systems due to regional history or colonial control. In very basic terms, region one is the United States and Canada; region two is Europe and the Middle East; region three is Indonesia; region four is Mexico, South America and Australia; region five is Africa and most of Asia; and region six is China. In addition to the basic six regions, there is region 0, which includes regions one through six; a region seven that has a special code used by movie studios; and a region eight that has a special code used by airlines. There also is a region called ALL, which is all regions 1-8.
Technically in order to play a DVD, the region code on the player and the disk have to match, but this isn't always so. When the code system was new, many DVD players and DVD disk drives were multi-regional. These drives were able to play disks with any DVD region code. Newer DVD disk drives can change regions up to five times, after those five changes the drive is locked in whatever region was last used. Most software-based video players don't check DVD region code and will play anything. Also, when making personal backups of legal DVDs, it is possible to re-flag the disk to whatever region is desired.