What we have gone through last year, and what is still racing through this year with untidy velocity, is a rupture with the common wisdom. 

Consider how the common wisdom took flight. It says that in this era of multiplying entertainment choices, audiences are being fractionalised. Individual programmes and channels have fewer total viewers because audiences are being spread among many channels. No single entertainment choice will survive for long without shrinking. 

And why not? There are over 2,000 hours a day of television and cable programming in the US, flowing through 50 to 90 cable channels. There are 98 million television homes in the US, over 65 million homes connected to cable, and 80.4 million homes with VCRs. Satellites deliver hundreds more choices to a further five to seven million homes. With digital compression rising, cable systems and networks can multiply each transmission channel by four. And then there is the Internet. It is bulging with 20 million host computers in a land where 42% of homes have computers. What is almost beyond comprehension is that if this trend continues, there will be 90 million host computers by the turn of the century. The Internet is growing by 40% to 50% annually.  

Lying in wait in the wings, impatient to make its mark, is the marriage of computer bits and video software known as convergence. All the above is competition for the eye and ear of the individual viewer, with competition so virulent, so fiercely unrelenting, it is unlike any design ever contemplated by the experts.  

Right now, each day, Americans spend an average of nine and a half hours watching TV, movies, rented videos, reading, listening to music and surfing the Web. But the length of a day is immutable. The finality of its 24 hours cannot be expanded,  
not even by technological sorcery. Whatever one does or views is confined within a rigidity of time. 

Imagine, then, the noise of jaws dropping among the forecasters when their primitive and powerful transactions were disturbed by movies' sudden burst of marketplace energy, challenging all the illusions in which so many of these experts collaborated. In spite of VCRs, laser discs, VCDs, CD-ROMs, cable and TV stations, sporting events, satellite home delivery, optic fibre, digital magic, the World Wide Web, in spite of all these intrusions, more Americans visited movie theatres in 1997 than in any year since 1959, with a total of 1.4 billion admissions. Box office ascended triumphantly, rising to $6.4 billion, the largest ever. The healthy rhythm of ticket purchases and satisfied customers resonated in theatres all over the US. It is, by any standard you choose to employ, a most unexpected entrance into the public embrace. 

From the entrails of this catalogue of moviegoing there emerge some fascinating facts. The most valuable audience assets we have are the "Frequent Moviegoers", those who attend a movie theatre at least once a month. They comprise 28% of the US population and 81% of total admissions. By ethnic grouping, Whites make up 66% of US admissions, Hispanics 15%, Blacks 13% and Other 6%. The fastest growing admissions group is Hispanics, increasing admissions by 22%, 1997 over 1996. 

Internationally, admissions in the European Union are up 6%. The major territories in Latin America have seen a 13% jump in box-office takings. But most heartening is Asia. In spite of the tidal wave of currency erosion and the cratering of the banking system in too many countries, we ended the year in the Far East with a 2% increase in admissions. 

I am greatly cheered by this worldwide trend toward magnified ticket sales. Why? Because national films of individual countries are on the rise. I rejoice, since I have long preached the gospel that wherever local films entice more customers, the overall marketplace expands. Everyone prospers in that kind of landscape. 

Now, let's play the population prophecy game. It's sort of fun. It may even turn out to be fairly accurate. Over the next 10 years, the US population will increase by roughly 12%, reaching 300 million human beings. Based on demographic trends and moviegoing history, we ought to have, in the year 2010, a 12% gain in movie admissions, lifting our total to some 1.6 billion in ticket sales.  

This advance will be led by the over-40 age group, who should enlarge their admissions by 25% to some 512 million, followed by the 12-20 age group with an expansion of 16%, at 405 million admissions. The 21-39 age group will remain fairly constant, accounting for some 500 million admissions. 

Exhibition has good reason to view the future with a wide-lens optimism. Climbing ever higher mountains, the number of US theatre screens nears 32,000, the envy of the world. These screens, most of them state of the art, hospitably welcomed an industry total of 458 new films released in 1997. However, from the seven major studios came a slightly lower total of films released, 197 in 1997 compared to 215 in 1996.  

However, you would not choose to have me spread before you a vast canvas of jubilant arithmetic without a little downside, now would you? Of course not, which is why I now come to costs. The average negative cost (which includes overhead) of the MPAA companies ascended to $53.4 million, a rise of 34% over 1996! Or, to put it more gloomily, an escalation of 166% in the last 10 years. 

Marketing, advertising and print costs didn't lag either. These average costs moved to $22.2 million, a growth of 12.2% over 1996. Thus, the average total negative and marketing costs for MPAA company films reached $75.6 million.  

As I have wearily declared in other years, costs remain a great shaggy beast prowling the movie forest – a fiscal Godzilla slouching toward our future. Yet, Titanic has defied and capsized the common wisdom. The largest film negative cost of all time has morphed into the mightiest revenue-producing film of all time. My only rebuttal is that Titanic may be described as the movie equivalent of Halley's Comet, arriving once every 75 years! In an odd way, we are bearing witness to a collision of contradictions: as the American movie rides an ascending curve throughout the known world, it is being pursued with a malignant fidelity by total costs. It is a terrible confluence of hope and terror which confronts every studio, every producer, every production company in America and elsewhere. 

So it is we begin our journey into 1998, in which we will be accompanied by storytelling at its creative height, as well as a cranky, querulous, unwanted companion called negative-and-marketing costs. 

But as we continue to enchant audiences all over this planet, it is beguiling to note what Edith Hamilton wrote as her definition of an educated, civilised man: "One who is fitted to meet life's changes, chances and dangers with versatility and grace." This elegant definition can, in my frail judgement, also be applied to the American movie.
 
But it is a fact, blessedly confirmed, that the American movie is affectionately received by audiences of all races, cultures and creeds on all continents, amid turmoil and stress as well as hope and promise. This isn't happenstance. It is the confluence of creative reach, storytelling skill, decision-making by top studio executives and the interlocking exertions of distribution and marketing artisans. 

What we have produced in America and draw from other countries is a community of indispensable talent. Talent is uncommon. It is to be valued, encouraged and nourished. It is the one creative element that guarantees all others. Some who are critical of the US industry deal in laboured metaphors which demean what we do as appealing to the lowest common denominator. That is, and always has been, the elitist view. This intellectual bias is best expressed by Jean-Luc Godard, for whom I have such personal admiration, especially his earlier works. Godard, in understandable frustration with a pliable public, wrote: "When a truly serious film becomes popular, it is the result of a misunderstanding." For all his gifts, Monsieur Godard misses the core centre of America's creative appeal. 

I have long been one who honours and prizes audiences, no matter where they reside. Audiences are voters, citizens, keepers of the nation's values, guardians of the nation's conscience. All nations, not just the US. To treat them casually is to give entry to irretrievable blunder. The platform from which springs the quickening spirit of the American movie is a ceaseless respect for the audience. It's a secret we are pleased to share with the world. May that respect never be extinguished.