Globalisation and segregation

By Alex Singleton | 15 January 2006

One of the benefits of globalisation is that it makes it difficult for national producers to hold consumers to ransom. In the 1970s, car manufacturer British Leyland may have been producing unreliable cars, but thankfully consumers could import Japanese cars. Globalisation also makes it more tricky to price discriminate between countries because free traders will emerge who buy in the cheap countries and sell in the expensive countries. Of course companies often try to restrict such trading, but they are normally fairly ineffective.

The entertainment industry has tried to separate national markets through techniques such as region encoding for DVDs: a DVD bought in the United States will not play in the United Kingdom. Fortunately, it's normally possible to get around this. Some retailers, like Amazon, sell DVD players that have been modified to allow them to play any region. Moreover, many DVD players can be made to play DVDs from any region with little effort.

In the UK, the film industry has failed to offer any legitimate way to download movies over the internet. So it's no surprise that downloading films free of charge on peer-to-peer networks has become commonplace. But downloading films in this way is a pain: it can take days for a movie to download. A legitimate service can be so much faster: in fact, it could start playing pretty much instantaeously thanks to streaming technology.

So on one level the introduction of Google Video seems great, although there seems to be a lot of criticism about how the system works, and the fact that, currently, there's very little content there. My beef with it is simply this:

I'm sure this is the entertainment industry, not Google, who are responsible, but doesn't Hollywood realise that trying to segregate content between countries is so very last century?