StudioCanal is to slash its production to just 15 films a year as part of a dramatic streamlining of operations. However, closing Vivendi Universal's European production and distribution arm is not on the agenda, insists chairman Richard Lenormand, despite rumours to the contrary.

StudioCanal's production policy will now firmly focus on Europe and the bulk of the cuts will apply to high-profile US titles.

"We were involved in too many projects before so it is more a case of balancing than it is a case of downsizing ", Lenormand told Screen International. "For a so-called 'European studio' we were involved in far too many big-budget US titles and over 50% of our investment concerned them. Universal can do that much better than we do, and our various US deals no longer make sense". It's likely, however, that StudioCanal will continue to invest in US auteurish titles such as David Lynch's Mulholland Drive.

The 15 titles for investment each year will roughly include three big-budget European titles, five 'Festival-friendly' films, and seven medium-sized auteur films with 'good crossover potential.'

Lenormand cited last year's Cannes title Mulholland Drive as well as two of this year's Cannes films, Mike Leigh's All Or Nothing and Nicole Garcia's Alain Sarde-produced L'Adversaire as being a good example of the latter category.

The 'big budget' category, for its part, included such French titles as Christophe Ganz's $30m 2001 hit Brotherhood Of Wolves and his upcoming adventure flick Bob Morane (which is likely to be just as expensive and is produced in-house by Richard Grandpierre) as well as Mathieu Kassovitz's sequel to his highly successful Crimson Rivers, to be produced by Alain Goldmann's Legende Entreprises. "Such titles can justify an early involvement of Universal Pictures, which distributed Brotherhood Of Wolves." Lenormand commented.

Most observers believe StudioCanal's European distribution network is also likely to be downsized, but not completely folded. However, Lenormand says this is not currently on his agenda.

If Studio were to downsize its distribution network, it is unlikely though that StudioCanal will let go of Germany's Tobis, a successful distributor in its own right. StudioCanal's French distribution outfit Bac Distribution (an 80% subsidiary of StudioCanal), would also be likely to continue.

Lenormand commented : "Putting structure before product is a seductive concept, but content is more important to us". A good example of this is the creation of Studio Canal Urania in Italy, which was built around projects brought in by producer Conchita Airoldi.