Just three months after the splashy merger of HanWay Films and Celluloid Dreams, their joint venture company Dreamachine has now announced that the Celluloid and HanWay brands will be run as separate first-run sales and acquisition businesses in London and Paris, as they traditionally had been.

The companies had sold films together under the Dreamachine banner at Cannes but effective immediately will return to separate branding and sales teams for new titles.

The Dreamachine joint venture itself will continue to license the combined 500-title library of the two companies. Celluloid's Hengameh Panahi and HanWay's Jeremy Thomas will continue to serve as joint chairmen of Dreamachine, which will also seek to acquire library assets and build its own VoD platform and VoD rights aggregation business.

'We've decided to focus our combined resources on aggregating this library and VOD plans,' HanWay chief executive Tim Haslam said. 'At the same time we've decided to brand both companies separately, given them each their appropriate resources as separate profit centres.'

All titles that HanWay and Celluloid Dreams work with separately will go into the Dreamachine library.

Philippe Aigle, Haslam and Peter Watson will work together on Dreamachine's strategic plans for new media, digital and catalogue distribution. Alessandro Raja will continue to serve as Dreamachine's director of library sales.

Watson said: 'We've just completed the joint acquisition of two catalogues from Peter Weir and Merchant Ivory, and we're in negotiations to add three more. We will now advance our plans for a branded VoD platform.'

Celluloid Dreams founder Hengameh Panahi wasn't available for comment, but the company's marketing and publicity head Gordon Spragg told ScreenDaily.com that the move was 'a starting point, not a step backwards. We've made this announcement more for practical reasons, clients were getting confused.'

The merger, announced in April, brought together London-based HanWay, founded in 1998, which works with larger independent films such as Julian Jarrold's Becoming Jane and Richard Linklater's Fast Food Nation; with Paris-based Celluloid Dreams, which was founded in 1993 and is known for working with more auteur fare from the likes of Francois Ozon, Takeshi Kitano, Michael Haneke, Todd Solondz and Abbas Kiarostami.

'Both companies have a highly diverse range of product and we think it's more economically viable to keep our brands as they are and to merge the combined range into the library business and VOD business,' Haslam continued. 'We're total partners but we think it will be more profitable to run two brands.'

He added: 'Our core business is building a large independent library of feature films - that's the core business of the joint venture, in order to achieve our ambitions we're going to be acquiring a lot of films for our library and to have two labels doing that separately encentivised is a powerful combination.'