No one will forget 2001 in a hurry. A year that had already been memorialised by Stanley Kubrick has now been burned into our collective psyches because of one day in September.

For once the entertainment industry found itself thrust into the limelight by forces beyond its control and making. But once there, its films and TV shows became emblematic of the public mood, reminding us all of the grim potency of the visual image as well as the human need for escapist theatre at unsettling times like these.

Indeed, such is the continued craving for feature films in the face of both gruelling headlines and a groaning economy that even now box office records keep tumbling the world over.

But as tempting as it might be to see Harry Potter and Lord Of The Rings as two franchises perfectly attuned to the zeitgeist - the cinematic equivalent of comfort food - the fact is that fantasy, fable and enchantment were already the order of the day even before terror struck.

Look at Japan: since opening way back in July, Spirited Away has become the all-time box-office champion there with one in six of the population paying to see this animated story of a 10-year-old girl who finds herself in a looking-glass world of ghosts.

In Paris, the sensation this year has been Amelie, a modern-day fairy tale set in a wholly make-believe Montmartre which hit theatres in April. While in the US, it is easy to forget that yet another tale featuring dungeons and dragons, DreamWorks SKG's computer-animated Shrek, is still the film to beat after storming the domestic exhibition circuit this summer.

Chances are that the combined weight of these and so many other releases, including an unprecedented number of local-language giant-killers, will help crown 2001 as the most successful in box-office history.

Not that the global film industry managed to insulate itself entirely from the recession at large - companies large and small were forced to prune their ranks, while others struggled even to stay afloat as their financial wellsprings began drying up. And although this year's looming talent strikes proved to be a phantom menace, industrial labour relations are still fragile at best. UK actors, for example, are still demanding systematic residuals, while in the US talent agents and acting their clients have failed to agree on the basic rules of engagement in a Hollywood ecosystem that is evolving beyond all recognition.

At times since September 11, it has seemed the film industry itself was on the front lines of the geo-political conflict. Hollywood studio leaders colluded with the Bush administration on ways to help the war effort in Afghanistan; top action writers and directors were drafted in to help the US Army dream up scenarios for further possible terrorist attacks; and several observers - Iraqi president Saddam Hussein for one - described the destruction of the Twin Towers in terms of watching a Hollywood movie unfold.

Will this heightened sensitivity usher in a new era of feelgood entertainment' Hardly. Ridley Scott's Black Hawk Down, a downbeat and anti-jingoistic account of the US military action in Somalia, is set to open any day now in the US. Rather than shelve Collateral Damage, Warner Bros has now set a 2002 release date for the film, which deals with a terrorist bomb attack on a skyscraper. And Miramax has been reportedly linked to two films that confront recent events head on: an adaptation of Andy McNab's Crisis Four, about a plot by bin Laden to blow up the White House, and a sequel to Rambo in which Stallone dons the ammo-belt again and takes on Osama himself.

Witchcraft and wizardry, ghouls and goblins, swords and sorcery, owls and orcs. This was the year that gothic fantasies and mythic fables cast their spell on the popular imagination. Two in particular: Harry Potter And The Philosopher's Stone and The Lord Of The Rings: The Fellowship Of The Ring. Both chased rather different core demographics, and yet the surface similarities between these would-be juggernauts could not be avoided since each arrived with a fanatical literary following.

Whether either series can sustain their extraordinary hype - or come close to the $1bn and more in profits that Star Wars is said to have generated with each episode - time will tell. So far, Harry Potter has exhibited all the hallmarks of a sequel, opening massively and then declining more precipitously than say, Titanic, the gold standard for box-office staying power. In the meantime, the entire film and literary world is now searching for the next ready-made mythology. Already on the cards, a theatrical version of C S Lewis' Narnia Chronicles. Expect fluffy Aslan lions to hit toy stores soon.

Although multiplexes in international territories rely on the drawing power of tentpole Hollywood films, they also need to supplement this fast-food diet with a flow of indigenous blockbusters if they are to sustain audience growth. Fortunately for both exhibitors and distributors this year, there was no shortage of local breakouts across the globe. From Germany (Der Schuh Des Manitu) to Sweden (Jalla! Jalla!) and Norway (Elling) and from Japan (Spirited Away) to Spain (Torrente 2: Mission In Marbella), territories saw substantial increases in business on the back of home-grown successes. Not every local hero could be considered a domestic pure-bred - Amelie was part-financed by Germany, while The Others was a full-blown Hollywood production as was Moulin Rouge - but at least they could be marketed as a local phenomenon. Similarly, the UK media and audiences alike embraced both Harry Potter and Lord Of The Rings, two films with strong British accents and even stronger British heritage, as being proudly their own.

The growing consolidation of the entertainment business into ever fewer hands is nothing new in the film industry. But what is starting to set the new breed of global superpowers apart from the smaller fry is their ability to completely bulldoze the public consciousness into submission by harnessing a wide range of media and marketing outlets (often their own) when launching films.

Look at AOL Time Warner's cross-promotional efforts on behalf of both Harry Potter and Lord Of The Rings, two movie franchises that have been turbo-charged into the marketplace with the full synergistic force of its various divisions behind them (pictured: AOL chairman Steve Case). The huge leverage that groups like AOL Time Warner can muster is also helping it secure top-class production ahead of smaller rivals. Recently, for example, it was the domestic rights to Terminator 3, with the film's producer saying "the depth and breadth" of AOL Time Warner was "pivotal" in helping secure the deal.

The massive sub-continent that gave rise to the word 'mogul' may soon itself be lunching at the power tables of the world's movie elite, if this Indian summer continues. Although long known as the single most prolific producer of films on the planet, with an annual output of some 800 films, the Indian film industry has never enjoyed much of an international profile - until now. Led by Lagaan, Asoka and Monsoon Wedding , which won this year's Golden Lion at the Venice film festival, Indian cinema is not only winning pri