Back in October we noted that Time Warner-owned Warner Bros. was still hopeful of reclaiming some lost ground in the broadband-rich-but-piracy-ridden Korean movie market by releasing films on demand two weeks before their DVD release. It was hopeful even in the face of Sony, Paramount, Universal, Buena Vista and 20th Century Fox having shuttered domestic operations due to lagging sales.

SEE ALSO: Warner Bros. To Release Films On Demand In South Korea Two Weeks Before DVD Release

Now a month later, Warner has changed its mind completely: it is getting out of the business of distributing DVDs, and in the coming weeks, it will sell licensing rights to a local company, which will take over the distribution of its movies, reports the WSJ.

DVD sales in the country have fallen to an estimated $285 million this year from $673 million in 2002, and a survey conducted by the Korean Film Council a year ago found that 47 percent of Korean Internet users have downloaded films through file-sharing sites, averaging 54.5 films a year. The Korean government has previously promised to shut down P2P and pirate/film storage sites, but it still has an unsigned free-trade agreement with the U.S.

Meanwhile, Warner is moving onto other Asian markets, and just last week announced that it would become the first Hollywood major to start selling VOD in China for less than the cost of a pirated DVD.