Warner pulls Korean DVD sales organization

LOS ANGELES, Nov 11 (Reuters) - Warner Bros, facing rampant online piracy, will close its DVD marketing and distribution operation in South Korea and hand over that business to a local licensee, the company said on Tuesday.

The division of Time Warner Inc (TWX.N: Quote, Profile, Research) said in a statement it will make the transition in the coming weeks.

Warner Bros announced in September that it would become the first Hollywood studio to release movies in South Korea through video-on-demand, two weeks before their release on DVD.

The company said its commitment to the South Korean market remains strong. But its decision to shift business to a licensee signals the challenges with piracy that Hollywood studios face in a country where more than 94 percent of households have broadband connections.

An industry source said that piracy "creates a more challenging marketplace" in South Korea than elsewhere. (Reporting by Alex Dobuzinskis: Editing by Peter Henderson, Richard Chang)