TwentiethCentury Fox has picked up worldwide rights excluding Russia and the Balticstates to Channel One's Russian-language horror sensation Night Watch and its sequel Day Watch.

FoxSearchlight Pictures will release both titles and the studio's main divisionwill co-develop, co-finance and release a third, English-language instalmentwith Channel One, Russia's leading film and television studio.

Releasedrecently, Night Watch, which is based on Sergei Lukyanenko'spopularfantasybookfranchise about rival forces that control night and day, became the most successful picturein Russian cinema history with a $16m gross in one month. Day Watch is currently in postproduction.

While the size of the box office pales in comparison to USstandards, the achievement cannot be overstated in Russia, where a boomingexhibition sector is playing a significant factor in the market'semergence.

By way of comparison The Lord Of The Rings: The Return Of TheKingtook $13m in its first two months in Russia.

The originaltwo pictures were both directed by Timur Bekmambetov and produced by Channel One andTabbak-Bazelev Productions. Producers Konstantin Ernst and Anatoly Maximov will alsobe involved in producing the English-language instlament.

Moscow-basedPaul Heth, an American who heads up Russia's leading exhibitor RisingStar Media, brokered the deal along with Michael Schlicht, who distributes Foxand Channel One content in Germany. Chase Mellen served as counsel for Channel One.

"Weare proud to be in business with the producers and an enormously talenteddirector on this first film from the 'new' Russia to find worldwidedistribution," Fox chairman Jim Gianopulos said in a statement.

"Wesee this as visionary alliance that will take both Fox and Channel One into anexciting new era."

"Weare thrilled by the idea of our movie being distributed by Fox, which isrecognised as a major Hollywood company worldwide," Channel One generaldirector Ernst added.

"It'sa special honour that our new deal is with Fox as we have enjoyed a long andsuccessful relationship with them."