That is because that image is
wider than it is tall. A DVD front cover is
shorter than it is tall. You cannot use an uncropped landscape image, for a portrait cover. It's like trying to mash a square peg into a round hole.
You could use it for a "wrap-around" cover (and I really like wraparound covers). Here is a quick mockup I've done to show the kind a thing you could do with that same image,
without squashing it by a single pixel...
You either need to do something similar, do some serious photoshopping, or select a different "portrait compatible" image.