The merger between London-based HanWay Films and France's Celluloid Dreams promises to produce 'bigger' films (see In Focus, p6-8). We'll have to see what 'bigger' encompasses in this case - but do not expect anything quite as grand as the sort of film Graham King produces or some of the past efforts of Saul Zaentz.

Each of the companies has a long string of critical successes, including Rabbit Proof Fence, L'Enfant, The Dreamers, The Edukators, Nobody Knows and The Triplets Of Belleville.

HanWay even had a bonafide mainstream crossover hit with Match Point, but it and Celluloid Dreams have primarily survived through a combination of shrewdness, cost-consciousness and passion. The plan is not to suddenly shift gears and throw caution to the wind.

Nonetheless the merger underlines how difficult it is for any company to survive by mining the margins. Mark Borde, an independent distributor for the past 25 years, suddenly found himself with a hit last year when The Illusionist defied all expectations and grossed more than $40m theatrically in North America. Good news for Borde - but then he started to wonder where he was going to find more pictures of that ilk.

When partnership pays
Someone once observed that the industry is structured in a way to facilitate the majors making money and the true independents taking it on the chin. So if you are not Warner Bros, Gaumont or Toho, success tends to be an anomaly and few can sustain its precarious nature for long.

The classic template for an independent is to partner with a Hollywood major, and that has worked well for such companies as Summit and Europa Corp.

Sometimes even unexpected hits such as The Lives Of Others benefit from such largesse. The producers of the Oscar-winning movie could not find a German distributor until Buena Vista International stepped up - on condition it was made for $2m. BVI retained rights in Germany, Austria and Switzerland, where the film has grossed about $17m of its current $40m international box office.

The majors regularly invest in European, Asian and South American films but their track record reveals a mixed blessing for national cinema industries. Take, for example, the 1998 Swedish spy thriller Hamilton, starring Peter Stormare and Lena Olin. Again, BVI came on board for Scandinavian rights.

Mixed blessings of major deals
The film's sales agent used the American Film Market as a springboard to make a US sale but, despite its action theme and record business in Scandinavia, there was a distinct lack of interest in the US. The initial response from the domestic side of BV was that the film was 'too Swedish'. So an English dub was prepared - and then the excuse became that the film had lost its international flavour.

Nearly a decade later Europa produced Bandidas, a freewheeling, mainly English-language western starring Penelope Cruz and Salma Hayek. Fox acquired rights to the film in North and South America and, despite its popularity in Spanish-speaking markets, ultimately opted to go direct to DVD in the US. Nothing has changed.

The bottom line for any film not distributed by one of the behemoths is that even if it manages to find a buyer, it will not receive the marketing dollars to compete nor will it have the screens to generate a significant gross. The dream of a transition from niche player to the mainstream continues to work better in theory than in practice.