The decision to close HBO Films London should be taken as a signof greater global ambition rather than retrenchment, claims HBO president ofinternational distribution, Charles Schreger.

And that may include creating satellite branches of the business acrossthe world in the future.

Schreger says HBO is serious about growing both the domestic and internationaltheatrical business and needs an operation capable of delivering growth.

He believes that, despite the achievements of Penny Wolf's London team,consolidating operations and decision-making in the US will give greater focus.

"We want to be in the business in a more robust manner. It'sa really big business for us rather than something we do on a rather ad hoc basis."

But there is another side to the equation.

"In an odd way moving the operation to the US is a sign ofour commitment to international," says Schreger.

Greater emphasis on creating better theatrical product will leadto more emphasis on overseas distribution. He would not rule out creating anetwork of overseas distribution arms.

"It's too early to say exactly what is going to happen nowand we've got a bit of breathing space. But at some time in the future we may haveoffices outside New York and LA, in South East Asia, Europe or London."

In the short term, the plan is to work closely with overseas distributors,and particularly the festivals, which were an important part of the HBO FilmsLondon operation.

"Colin (Callender, president of HBO Films) has got greatrelationships with people like Thierry Fremaux (Cannes artistic director).There is no way we are going to sacrifice those relationships."