Warner Home Video (WHV) launched its own Hong Kong affiliate company on July 5, becoming the first Hollywood studio to capitalise on a lucrative VCD market by establishing a wholly-owned affiliate, with a 12-strong sales and marketing staff.

An estimated 95% of all Hong Kong households own a VCD player - a total of 1.6 million households.

The move by the Hollywood giant is a sign of confidence that the fight against video piracy is finally having an effect in Hong Kong.

"Warner Bros, has confidence in our system and confidence that we will protect its investment," said William Chow, superintendent of protection of intellectual property for the Customs and Excise department.

Chow quoted a 98% decrease in the volume of pirated VCDs in the last year with illegal outlets dropping from over 1,000 to less than 100.

During 2000, Warner Bros. enjoyed an estimated market share of 25% of VCDs and 45% of DVDs sold in Hong Kong.

Warner Home Video added vintage and contemporary Chinese-language titles to its extensive library by obtaining sole distribution rights to over 170 films produced by Golden Harvest up to 1999. The company is also finalising a deal with the Beijing Film Studio to distribute 18 of its films in Hong Kong on video, four of which are expected to be released by the end of 2001.