As cinema celebrates its first century, David Puttnam opens this É«ºÐÖ±²¥S nine-page special by looking to the next. He tells Kam Patel that despite US domination of the industry Britain's technological skills could give it a stake in the cinema of the future. When making his first film in Hollywood in 1913 Cecil B. De Mille had to fight off saboteurs hired by competing movie-making outfits. He received anonymous death threats and was even shot at as he made his way to work on horseback: competition in the early days of cinema was literally cut-throat.

The bullets of industrial envy were whizzing past De Mille's head just 18 years after the Lumi re brothers unveiled their famous Cinematographe. The machine, which combined camera, printer and projector, kick-started a motion picture industry now worth billions of pounds.

Yet, as film producer Sir David Puttnam, visiting lecturer in film at Bristol University, points out, even in the early years of the Cinematographe, film was an end-of-the-pier attraction reckoned by its inventors to have a short lifespan: "It was an easy way of gathering up the loose change in people's pockets. It was literally a novelty."

Puttnam, whose film credits include Oscar winners Chariots of Fire, The Killing Fields and The Mission, believes that the stranglehold of commercial interests on the industry was loosened only with the making of The Birth of a Nation by D. W. Griffith in 1915 just a year after De Mille's The Squaw Man. Griffith's silent film about the American civil war was regarded by many as a creative breakthrough in its use of devices such as film editing and the close-up shot, and it set the scene for decades of tension between the film industry's artists and executives.

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Until the early 1980s. Puttnam says: "In the last ten years the medium has been transformed from being a quasi-art form that began with Griffith to something quite different. It has now colonised a huge number of aspects of our economic, social and cultural spheres." It has made an economic impact on industries such as music, tourism and fashion - big businesses whose worth cannot be measured just in terms of national GDP. Movies also have a powerful political reach via their effect on cultural attitudes.

As Puttnam sees it, it is through cinema that the United States has been able to colonise the rest of the world in a way no other society in history is likely to be able to replicate: "It is America's ultimate triumph but also its ultimate responsibility," he says.

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And it was no accident. Puttnam produces a copy of a remarkable letter sent in June 1917 by then US president Woodrow Wilson to William A. Brady, president of the newly created National Association of the Motion Picture Industry, the industry's first trade association. In the letter Wilson says he wants to bring motion pictures into the "fullest and most effective contact with the nation's needs". He adds: "The film has come to rank as the very highest medium for the dissemination of public intelligence and since it speaks a universal language it lends itself importantly to the presentation of America's plans and purposes." Wilson asked Brady to organise the film industry so that it would cooperate fully with the US government's public information committee, a body which spearheaded American propaganda during the first world war.

Another letter was sent by Brady to Joseph Tumulty, the president's private secretary. It describes a meeting between Brady, government officials and motion picture representatives from the US and Canada. Brady believed that "if properly handled, the motion picture can be made the most wonderful system for spreading the National propaganda at little or no cost". Brady had little doubt that the industry could be brought under full control, "where no politics of any name or description, nor any private interests can interfere with its carrying out the President's desires in every way, shape, manner or form suggested . . ."

The "special relationship" between the US movie industry and Washington was sealed. "Cinema of course was used as a propaganda tool in a very real sense during the war," says Puttnam. "Out of that [relationship] films also became, again with explicit support from Washington, the 'shock troops' of American economic dominance. People around the world wanted to be American, they bought into the American lifestyle, the American dream. Through films, people wanted things that American society appeared to have in abundance."

The US audiovisual industry's domination of the European market is breathtaking. Over the last ten years European films have lost 50 per cent of the European film market to the US industry. In 1968, box-office takings in Europe for US films were 35 per cent, those for European films 60 per cent. The American film industry now has an average share of 80 per cent of the European market.

So where does this leave Europe's film makers? Puttnam believes European countries have never had America's steadfastness of purpose nor fully understood the importance of the audiovisual industry: "It needs immense political will and a political culture in Europe that says to the US: thus far and no further." Certainly the geographic, economic and cultural fragmentation of Europe does not help. And a US film industry that is less exploitative of these drawbacks is as likely as director Stanley Kubrick inviting the press round to his place for tea and a chat. Puttnam says: "The British film industry has 41/2 per cent of the domestic market. If you take the American attitude to its natural conclusion, the Americans would be more than happy for us to have just half a per cent."

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In the absence of concerted action to match the Washington-Hollywood axis, Puttnam believes each nation must make the most of its strengths to develop new markets. The development of multimedia products for entertainment and education offers Britain an opportunity to create an industry with the potential to dwarf the movie trade, he says. While the English language is a huge advantage, Britain also has at its disposal professionals skilled in the use of technologies crucial to a multimedia-based "edutainment" industry. Puttnam points out that British animators have won three of the last four Oscars and that Britain has the second largest CD-Rom publishing sector in the world. The European audiovisual market, in which Britain has a 25 per cent share, is expected to grow by 300 per cent over the next 20 years. Puttnam says: "The important thing now is to have some sense of urgency about developing this whole area. It can be done. But it's no use waiting a few years and then being surprised to find that the US has become dominant again."

Puttnam's enthusiasm for this new line of attack should not be interpreted as pessimism about the future of a British film industry. Puttnam was, for instance, mightily pleased to see the British director Mike Leigh win the Palme D'Or for his Secrets and Lies at this year's Cannes film festival. Leigh's success follows Ken Loach's being named the joint-winner of the International Critics Prize at Cannes last year for Land and Freedom. But Puttnam says: "They have succeeded in making creative films but at enormous cost to themselves. In order to do so they literally had to go into some form of popular self denial. It is a pity. Ken Loach has had, still has, a lot to say. And I do not think that what he has to say has been seen by nearly enough people and we are all the poorer for that."

He does not believe that film is progressing as an art form at present and thinks of the tension between art and commerce in the film industry as cyclical. The work of D. W. Griffith during the era of the silent film introduced artistic qualities that proved reasonably successful and were built upon by succeeding generations. These qualities were swept aside during the mid to late 1930s but reasserted themselves in the 1940s only to be brushed aside again during the 1950s, and so on. The reasons for these creative cycles are complex, but the causes include the prevailing political, economic and cultural climate, as well as the aims of the film makers and stars on the one hand and industry executives on the other. Puttnam stresses that these cycles do not quite take place every decade - although it would be convenient if they did. He says: "Each generation attempts to make its mark creatively, is eventually overwhelmed by the commercial imperative and along comes another generation to make its stand."

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Puttnam believes we are now in one of the "swept-aside" periods. He thinks the younger generation is making interesting films but adds: "I hope I am wrong, but sad to say they are probably going to succumb to commercial pressures faster than my generation did. Those pressures are perhaps that bit greater now, they are certainly different. The opportunities to make a lot of money for instance are more seductive and the gap between success and failure more apparent."

A major recent development has been the increasing success theatre directors have had in making the transition to film making. One is Nicholas Hytner, director of The Madness of King George, The Crucible and King Priam. Others include Robert Lepage and Roger Michel. "A key reason for their success is that theatre directors are used to teasing out what works with an audience and what doesn't, they are used to previews, they are used to making changes," says Puttnam, adding that film makers of his generation, possibly because they came through advertising, tended to "anaesthetise" themselves from the audience. "They didn't want to preview the films, didn't want to engage with the audience in a way that was mutually satisfying. They came at it from the angle which said: 'I'm done with all that commercial stuff, I am now an artist. This is what I am trying to say to you and you are minded to understand it.' And sometimes the audience did and sometimes it didn't."

Puttnam gave up trying to predict the future of cinema years ago but he believes that this idea of "respecting the audience" is slowly becoming an acceptable cultural phenomena not just in the film industry but also in other arenas such as museums: "The present crop of museum directors is really very impressive. They want large audiences to see their exhibitions because it enables them to judge the success of what they are doing. They are not the sterile academics of the past who, from my perception, tended to tolerate or even resent the punters rather than welcoming them, entertaining them, seducing them."

There is plenty of scope for creating a more rewarding exchange between audience and film, yet it could be technology that delivers the most stunning transformation in the mechanics and psychology of the relationship. Puttnam is particularly excited by the prospect of flat-screen television sets coming on the market within the next decade or so. Electronics firms around the world are spending millions of pounds on developing the technology. Less than an inch thick, the ultra-thin screens could be pulled down or hung on the wall like a picture, and come in a variety of shapes with customised sound systems. "We are still messing around with the first stage of television technology," moans Puttnam. "Even the thinnest of TV sets is still 15 inches". With digital television on its way and satellite broadcasting becoming well established, it is the home that offers commercial and artistic opportunities for the audiovisual industry of the future. But as long as the audience has to put up with the current, cumbersome technology, progress will remain slow.

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Puttnam is hopeful though. Early next century, the consumer may very well be able to send off for a flat-screen television and stipulate its size, say 2 by 1.5 metres. "I am not sure I will live to see that happen. During my career I have tended to be right about where we are going in our relationship with the audience but have nearly always got the timing wrong. But there is certainly no reason why flat-screen television should not happen. And I think the relationship between the viewer, the technology and the person supplying the images will completely change because of it. The technology, with the addition of elements of interactivity, will offer extraordinary creative opportunities for all parts of the audiovisual industry."