Universal Pictures Japan and Gaga Communications have teamed up to form a two-picture joint venture which will see Gaga handle theatrical distribution rights on Universal's Blue Crush and Universal handle video rights on Gaga's Kill Bill.

The ground-breaking joint venture was initiated by Gaga which approached Universal about Imagine Entertainment's female surfing picture Blue Crush. Meanwhile Universal's Japanese ten month-old video operation saw an opportunity in Kill Bill, Quentin Tarantino's next film which was acquired by Gaga from Miramax International. The film, budgeted at over $50m, is one of the hottest on the international market and stars Uma Thurman, Lucy Liu, David Carradine and Daryl Hannah.

Blue Crush, which stars Kate Bosworth, Michelle Rodriguez and Scott Foley grossed $40m on its North American release in August, a release which was considered disappointing and reportedly created friction between Universal and its most prolific on-the-lot production outfit Imagine.

Publicly traded Gaga is one of Japan's most prolific independent distributors with its biggest hits including The Green Mile, Hannibal and The Mexican and recent pick-ups including Far From Heaven, Chicago, Ghosts Of The Abyss, Confessions Of A Dangerous Mind and In The Cut.

For Universal, which set up its own worldwide video operations following its exit from CIC, the relationship with Gaga could lead to further video partnerships to fuel its video market share in the territory. Meanwhile, for Gaga the joint venture gives Kill Bill access to Universal's pay-TV deal with WOWOW.

The deal was negotiated by Bill Rahn, general manager of Universal Pictures Japan (in charge of consumer products and home entertainment) with Kaz Tadashiki, the COO of Gaga.