Warner Bros' European homeoffice has decided to cease home video distribution in the Czech market, WarnerBros Czech Republic managing director Ladislav Stastny told ScreenDaily.com.

Stastny cited an increase in piracy which, combined with adecrease in pricing, resulted in dramatic decline in revenues from 2004 to2005. According to a report broadcast on Czech television, nine out of tenvideos or DVDs in the Czech Republic are illegal copies.

Already hurting from anincrease in Value Added Tax (VAT) from 5% to 19%, distributors' profits willsoon take another hit when new legislation requires home entertainmentdistributors to contribute 3% of their earnings to the State Fund for theSupport and Development of Czech Cinematography.

Warner Bros will continuetheatrical distribution activities in the Czech Republic, where it was the number two distributor in 2005,with 16.2% market share.