In early 2003, a debate over a technology called ClearPlay arose (also this discussion). ClearPlay is a movie technology that takes a DVD movie and a data file from the ClearPlay service that describes how to play the movie, and will selectively censor the movie in accordance with those directions. ClearPlay is designed to clean movies up to the standards of its customers, removing nudity, violence, profanity, etc. and thus allowing these movies to be viewed in a family setting, where such things may be considered inappropriate.
Hollywood objects to this, such as is seen in this quote from USA Today:
"Artistically, we're offended by an arbitrary outsider deciding how you should see a film," says Martha Coolidge, president of the Directors Guild of America and director of such movies as Rambling Rose and Introducing Dorothy Dandridge.
I'm long overdue to finally say this: Hollywood is right. A parent is free to take a film and clean it up themselves, for viewing by their children (who legally are an extension of the parent), but when content from a third party, in this case ClearPlay, is included, that is the bad kind of censorship without permission from the original owner.
Unlike the other examples mentioned so far where the gain is negligible, there is a small loss of capabilities here in the case where even parents would like to see a movie, but without the profanity. This small loss does not justify the costs of allowing this sort of manipulation, however.
The theoretical ideal would be for ClearPlay to license the movies, make their changes, and sell the resulting movies, with some reasonable fee going back to Hollywood, so everybody wins. While Hollywood is theoretically within their rights to shut this down without debate, one does have to question how committed to this sort of integrity they really are, when they are perfectly willing to censor their movies to run them on television. Still, just as it is my choice about how to distribute this essay, it is a movie owner's choice about how to distribute their movie.
In 2003 the Electronic Frontier Foundation came out in favor of this, demonstrating how hard it can be to recognize censorship if you aren't careful about understanding what's going on.