Because jewel cases suck.

another issue imagen the cover art.. little smashed up picture. screw that. Jewel cases all the way!

Thought it was due to a combination of

1) trying to differentiate from CDs
2) trying to make a case that matched in height with VHS movies (current DVD case size is same height as VHS tape length)

Keep cases were designed to fit on the same retail shelf space as VHS tapes. And that is the only reason DVDs are not packaged in jewel cases.

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well said.

I'd imagine it has something to do with marketing. First, keepcases are more attractive, and to sell someone a $20 product takes a slightly more expensive package than a $14 product. Second, it takes more space to market a movie. You need a synopsis, several pictures, and critic quotations. None of this would fit comfortably on a keep case. Third, many have said product differentiation, this has to be part of it as well. Lastly, I think there is something to the theory about matching the height of a VHS tape to make it easier for retail outlets to adopt the format. These are the reasons.

Also, jewel cases do suck. I wouldn't want to buy DVD's in a jewel case, and I probably would really want to buy a CD in a keep case. They were designed for their purposes and they seem to work well.

Yes, the above reason (distinguishing between music CDs and movies) and the anti-theft issues mentioned above by jarryjayo are the main reasons the studios got behind larger box sizes. I remember reading articles about the packaging standards on the news when DVD was in its infancy, as the stuidos were afraid how teenagers could easily steal the latest blockbuster if it was in CD-sized packaging.

As for the music industry screwing up with its choice of using jewelboxes: I always figured the reason they went with the small, square boxes was so that when they were designing the jacket art, they could simply use the LP art and just scale it down to fit, rather than having to re-work it.

To overcome theft and lack of visibility issues, though, they came up with those tall, slim outer boxes to put the jewel cases in, though that has fallen by the wayside.