• FT.com , Monday, October 6, 2008 11:30 AM

In order to combat rampant DVD piracy in South Korea, Warner Bros. Entertainment will start releasing movies online before it releases them on DVD, reversing the long-established Hollywood distribution model and opening the door to a major increase in movie downloads.

By allowing consumers to access movies online, WB hopes there will be less demand for pirated DVDs. South Korea is serving as a model for the new system, because it has both high rates of DVD piracy and broadband penetration. If the system works there, it could eventually be rolled out to other countries.

The new model has other perks, as well. Studios make more money from digital downloads than they do from DVD sales: Studios take 20-25% of the money from a rental but if the film is rented in digital form the share is closer to 70%.

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