Someone here can obviously tell it better than I can, but 'regions' were created for dvd players so that the media played on it would come from that particular region or market. It's a way to keep income in-house. For instance, say all dvd players in the US could play dvds from anywhere in the world. Theoretically, everyone in the US could import their dvds from someplace else for cheaper than they could get them here. So, the manufactures are lobbied by retailers to encode their dvd players so that they will only play dvds that were specifically destined for North America, thereby keeping the money spent on them in the north american economy, rather than it going to Asia, Europe ect.