Mega-blockbusters such as Avatar may be extreme rarities but it serves to remind the industry that while there are big problems yet to be solved; great entertainment and storytelling remain key winning over audiences.

A wave of optimism swept the film industry into 2010 as the Avatar juggernaut clocked up record cinema-going numbers around the world. That’s a bonus not just for 20th Century Fox and its partners on the film — Ingenious Film Partners and Dune Entertainment — but for the beleaguered exhibition community which has been in need of a fillip after a year in which the death knell for theatrical movie-going was sounded repeatedly, despite apparently good gross figures. As Titanic also demonstrated 12 years ago, a hit of this magnitude galvanises people who have lost the habit to start going to the cinema again.

But what does Avatar teach us about today’s ailing film model? It certainly shows that the right mega-blockbuster — and this one cost somewhere between $235m and $300m to produce — will always be a magnet for audiences looking for a special out-of-home experience.

I say ‘the right’ blockbuster because these event movies are not easy to manufacture even with studio know-how and budgets. There are just a handful of film-makers who can manage the imagination, scale and ambition required by a film like Avatar, while also attracting the finance it demands. James Cameron is one of them. Steven Spielberg and Michael Bay are perhaps the other two. A film like Avatar is an extreme rarity.

“While the big screen and 3D are components of Avatar’s success, it wouldn’t be the must-see cinema experience of the new century without its storytelling”

Similarly, for all those cheering at the 3D element of Avatar, that needs to be qualified. While the big screen and 3D experience are components of Avatar’s success, it wouldn’t be the must-see cinema experience of the new century without its storytelling know-how which is part of the film-making process, not the exhibition cycle.

In an interview late last year, Peter Jackson spoke eloquently about the hype surrounding 3D: “There’s an overreaction to 3D at the moment,” he said. “It can be a wonderful additional experience to have in a cinema for the right type of film, but it’s not the magic answer to the industry’s problems.”

So while Avatar keeps packing them in, it should be viewed as more an anomaly than a blueprint. Event films such as Titanic and Avatar come but once a decade, and in the meantime, as Jackson describes, the industry starts 2010 with the same fundamental problems to address that have been worrying pundits for the last 12 months.

“The film industry is not in a healthy state,” he mused. “DVD and television income has plummeted and the new generation is less interested in films than our generation used to be. The answer will come when there is a further development in how film income is derived from new technology, but until the systems are in place to achieve that, there’s a lot of fear driving the industry.”

While the main technological issue — how to monetise sufficiently the business of VoD and movie downloads — still eludes us, Jackson believes there is only one thing that matters during this transition. “It’s not about technology,” he insists. “It’s about entertainment and stories.”

And he is right. The best stories will continue to attract talent to make them and audiences to see them. It sounds clichéd to say it all starts with the script, but perhaps that has never been so relevant as now. Avatar, after all, is a good story rich with detail and flourishes from Cameron’s imagination. The audience has responded.

The ready capital which has diluted the quality of film-making for the last decade has dried up. As we wait for the next source of funding, mediocre storytelling has become a crime that can turn off audiences, drive kids away from cinemas and send companies out of business.