Last week, Pathe UK announced its decision to focus on developing and producing its own films rather than acquiring third-party titles. Its move to create all of its own product supply and to team up with Warner Entertainment UK (WEUK) for the distribution of its films has met a mixed reaction in the UK.

Some welcome the leverage a partnership with a studio will bring, particularly in terms of relationships with exhibitors and broadcasters. Others view it as a blow: with Pathe UK no longer acquiring third-party content and much of Warner Bros' UK product pipeline being filled by Pathe films, it effectively means producers have fewer companies to approach for distribution.

'It's sad whenever a distributor closes its doors,' says producer Stephen Woolley, of Number 9 Films. 'We need more distributors pushing the envelope. Pathe's decision not to have a distribution arm limits the people we can go to.'

Following the demise of Tartan Films last year, this latest alliance highlights the difficulties facing UK independent distributors.

'It's tough being an independent distributor in the UK in terms of television,' says Stewart Till, chairman of the UKFC and head of Stadium, which is in the process of buying the Icon Group. 'Pathe can piggy-back with Warner Bros in the TV area but that's a market failure if the independents are so disadvantaged that they have to go through a studio.'

Others see the partnership as a positive move by a US studio to edge further into UK production. 'My guess is that we will see more UK distributors being part of the production financing of British films,' says Paul Trijbits of Ruby Films. 'That has to be a good thing. I'm optimistic in what are difficult and challenging times.'

In 2008, Pathe picked up five third-party UK titles for distribution: Steve McQueen's Hunger and Stephan Elliott's Easy Virtue (both have been released), Jon Wright's Tormented, Tom Harper's The Scouting Book For Boys and Alex De Rakoff's Dead Man Running, which are all yet to be released.

Under the terms of the agreement, Pathe will continue to devise the marketing campaigns for its films while Warner Bros will look to distribute the titles across all media outlets and platforms, with the exception of video rights, which will continue to be handled for Pathe by Twentieth Century Fox.

Powerful allies

Cameron McCracken, managing director of Pathe UK, emphasises the UK outfit will continue to play an integral role in the distribution of its own films. 'Our bespoke service for film-makers from production to end is not finished - we don't want people to think we will just be handing a film over to another company.'

In terms of creative decision-making, McCracken says Pathe will make all the marketing decisions, from the scale and timing of a release to the form the marketing campaign will take. It will also finance the campaigns, covering costs including all p&a expenditure.

Pathe intends to produce a slate of four to five English-language films a year, to be supplemented by productions from Pathe France (since January 2008, Pathe has released 17 titles, including Slumdog Millionaire). Some of these may be co-produced with Warner Bros. Stephen Frears' Cheri is the first film to be released under the agreement.

'As far as film-makers are concerned, it's business as usual. The only difference is that through the alliance we achieve a greater weight in terms of exhibitors and broadcasters,' says McCracken.

He says the intention of the alliance was to reinvent a business model that was not working. 'This is a difficult period for finance and distribution, you need powerful allies. Warner Bros has clout and in-house knowledge. As an indie, you can't have that overview.'

Under the arrangement, the distribution fee paid to Warner Bros will be absorbed by Pathe, while Warner Bros will share in the distribution revenue. 'The point is to share a bigger pie,' says McCracken.

Josh Berger, president and managing director of WEUK, is enthusiastic about the partnership. 'We're going to be working incredibly close on their films. We've got very similar approaches to how we market and distribute films and we want to leverage our relationships in the best interests of the films.'

McCracken says the DVD deal with Fox is the model. 'That relationship allows us the clout to maximise revenues and the new alliance is based on the same principle.'

Warner Bros will now work with Pathe on a $50m live-action version of The Jungle Book for which a test shoot (financed by Warner Bros in the US) is now in post-production. Pathe developed the project with BBC Films and Warner Bros may add North American and Latin American rights. An Easter 2011 release has been pencilled in.

Inevitably there will be redundancies at Pathe. F

On cloud nine

Christian Colson is sympathetic towards those who may lose their jobs but as a producer he is optimistic about the alliance. His company, Cloud Nine Films, struck a five-year development, production, sales and distribution deal with Pathe earlier this month. He views the arrangement as an output deal and does not believe it will result in less money being spent on distribution.

'The alliance can only be good news,' Colson says. 'Pathe's films will still have their own identity in the way that they are marketed and distributed but at the same time there will be the additional leverage that comes from pushing them through the same pipeline as Warner products. That's going to mean more power in the exhibition marketplace.'

or legal reasons McCracken is not able to give details of job losses, but says: 'It seems likely there will be redundancies as the theatrical distribution role will be assumed by Warner Bros. We have started a process of possible redundancies and have to work through a period of consultation.'