SPOILER ALERT: This article contains details about the ending of Samson & Delilah

In one way, Generation X is making its presence strongly felt on the Australian film scene: a swag of first- and second-time feature directors in their 30s and 40s are dominating the record 26 films in contention for the Australian Film Institute awards, with nominations to be announced in October and gongs distributed in December. But in another way, they’re not: the Australian public has become so hypnotised by American blockbusters that it is failing to notice.

Sure, Australia is seeing younger filmmakers breaking through with a “very clear vision”, argues Melbourne-based director Glendyn Ivin, whose road film Last Ride, starring Hugo Weaving, won critical accolades. “And I think that’s being supported,” Ivin believes.

“There are a lot of first- (and second-) time filmmakers this year, so it might feel there is a new wave of directors and writers coming through. Maybe we’ve been watching for a little while.”

Pity the public didn’t feel the same way as the critics: Last Ride took just $345,819 or .05% of the Australian box office before quickly disappearing from cinema screens. It’s an age-old question: do Australians want to see Australian films?

Consider Aden Young’s angst. “Why as a nation had we started to boo ourselves?” the actor was asking himself as he began making a film by another young director, Kriv Stenders’s Lucky Country.

“These are your stories, that’s all we’re trying to do here. If we lose that opportunity, all we will be telling is American stories.”

He’d had good reason to ruminate: the Australian gothic western took just $26,141 at the box office and failed to make even the top-20 Australian films of the year.

Should we be making “jollier” and “brighter” films, the kind that Priscilla, Queen of the Desert director Stephan Elliott has come home to make after a long sojourn in England, where he successfully remade Noel Coward’s Easy Virtue? We’re making too many “kitchen-sink dramas” that are “heavy hitting”, Elliott complains of the 2009 crop of Australian films.

It should be remembered that when I spoke to Elliott, he was in a Los Angeles supermarket on his mobile phone, feeling frazzled after having attempted to sell some ideas to some studio executives there. The US film industry, he says, is in a “friggin’ terrifying stage” financially, with studios such as Paramount firing staff.

“They say there’s only two types of things that are going to sell: tent pole movies — the really big movies — and comedy,” said Elliott.

“While television is going to rise and rise and take over the heavy-hitting dramas or dark stuff, which really got me down in the dumps.”

Elliott’s perspective is not merely jaded by the shallow altitude of the Hollywood Hills, and he not just being his usually cheeky and anarchic self — the Australian domestic box office backs up what he has to say. Australian films have so far taken just 3.02% of the total box office this year, compared to 3.8% in 2008, 4% in 2007, and 4.6% in 2006, though it’s not as bad as the woeful 1.3% in 2004.

It’s all a pale reminder of cinematic yesterdays, considering the 9.8% achieved in 1994, when Muriel’s Wedding and Priscilla appeared, and is barely on the radar compared to the 23.5% of 1986, when Crocodile Dundee first flashed his knife.

When we do hit the heights with audiences, complains ABCTV’s At The Movies critic Margaret Pomeranz, Hollywood swoops in and snares our best talent.

“[Muriel’s Wedding director] PJ Hogan has gone, Phil Noyce, Peter Weir, Bruce Beresford — all those people who were making films here in the ’70s and ’80s ended up going to Hollywood because we don’t have [a big] industry here. You know, you can wait four or five years to get a film up ––well, how do you feed the kids in between?”

Part of the answer may be in new films better engaging with social media to imprint their virtues and entertainment value on the public consciousness, given they cannot hope to compete with the massive marketing budgets of US films; more viral campaigns making use of YouTube, Facebook, Twitter et al.

The prescription laid down in a recent white paper by Balibo director Robert Connolly — who says our films “lack originality and quality” and “no longer make a mark on international cinema” — is to keep budgets low and reward filmmakers for innovation, and for director, writer and producer fees to be kept “reasonable” and cast and crew offered a share of revenue as a way of keeping wages down.

But Melanie Coombs, who produced Adam Elliot’s stop-motion animation for $8 million — which took just $1.44 million at the Australian box office — was having none of that: “This obsession with going cheaper and cheaper and smaller and smaller — when do we actually get to be professionals?”

Perhaps Stephan Elliott is right: it’s time to lighten up already on the film front. None of which explains how Samson and Delilah, a film that cost $1.6 million to make and has earned a strong $2.975 million, despite a plot with large doses of violence and minimal dialogue, mostly in Warlpiri, a language most audiences did not know existed.

But listen closely to why writer-director Warwick Thornton decided not to kill off his embattled teenage Aboriginal love birds in the final reel: “They deserved a happy ending, and the audience — which has been put through this horrific journey — deserves a happy ending as well.”

Yes. He thought about the audience.

*What are your thoughts? Join in the discussion at Crikey’s Australian film cage match