The US studios can expect DVD sales in South Korea to reach a record high this year, according to localIT trade publication The Electronic Times.

Industry analysts estimatethat the five major US studios in Korea, including Warner Bros, Buena Vista and Fox, should see their combined DVD sales reach5.2 million units in 2006.

The Korean DVD market hasbeen notoriously dead-on-arrival as distributors have focused on relativelyexpensive sell-through titles, rather than the rental market, and proliferatinginternet piracy has eroded the market. Sales figures plateaued at 5 millionunits in 2003, but plummeted by 34% in 2004.

But in 2005, severaldistributors followed the example set by Warner Brothers Home Video Korea which lowered DVD sell-through prices by 40%. As aresult, sales for the five major US studio distributors increased by 19% to 4.4 millionunits last year.

Leading DVD distributorWarner Bros Home Video Korea notes increases in discount hypermarkets such asLotte Mart and Emart where sales went up by 129% in 2005. Online sales alsoincreased leaving behind wholesale and rental.

Despite holding more than50% of the box office, local films' DVD sales remain at around 3 million unitsper year since 2003. Experts blame higher production costs and structuralproblems for local films' lack of competitiveness in DVD.

The average price for filmsfrom US studio distribution arms are in the $13-$15 range, while Korean filmsgo for approximately twice as much in the $25-$30 range.

A new partnership betweentwo KOSDAQ-listed DVD companies, KD Media and Bitwin, also looks set to boostthe market.

KD Media took the topranking in video and DVD rentals last year with films such as Welcome To Dongmakgol, while Bitwin hassecured distribution through discount marts and bookstore chains. Bitwin alsoenjoys partnerships with filmmakers such as MGM and Korea Pictures, in additionto broadcasters such as KBS.