Warner Brothers is pulling all of its top movies from Sky's premium movie channels, The Independent has reported.

The studio is also planning its own premium movie channel to rival the likes of Sky Premier and Sky MovieMax. Universal is also keen to join in such a venture. Fox, owned by the News Corporation, is set to stick with Sky, but may not prove enough to keep the viewers interested.

Subscription figures for Sky's three channels are in current decline, prompting alarm from the Hollywood studios. Sky Premier subscriptions fell from 909,843 at the start of this year to 792,507 at the start of July. Similarly, Sky MovieMax subscriptions dropped from 889,366 to 758,292 in the same period.

Andy Birchall of rival movie service Front Row said: "Hollywood has continuing disquiet about the performance of Sky's movie channels. In the back of Warner Bros' mind during negotiations will be the declining performance of the three movie channels."

A source at Warner said, "The studios have been looking at how to expand their UK pay-television business in the future because of the proliferation of pay-TV platforms."

Meanwhile, a BSkyB spokesman said that Warner's move was simply an attempt to force Sky into paying more for the broadcast rights. "Movie fans want to watch the biggest stars, the biggest pictures and the best directors, irrespective of the studio that made them," he said.