For the last few years the best Australian films have been personal and dark, limiting audience appeal, while those that have aspired to hit the mainstream have tended to miss the mark at the box office.
But there is a palpable sense of excitement about a new crop of films which Australian film-makers hope signal a turnaround and international buyers are watching closely.
Leading the pack is the claymation film Mary And Max. Rarely does an Australian producer say 'we are trying to keep a lid on the buzz' but a cautious Melanie Coombs, fearful people will expect too much, said exactly this.
The animated tale about two pen pals opens in Australia in Easter 2009, with Toni Collette, Philip Seymour Hoffman and Eric Bana providing the voices.
Writer-director Adam Elliot previously made Harvie Krumpet, also produced by Coombs, which won the best short film animation Academy Award in 2003. Their debut feature, by all accounts, is equally promising.
The weight of expectation is huge. Only two of the 50 local films released in Australia since January 1, 2007 - The Black Balloon and Romulus, My Father - grossed more than $1.4m (a$2m), and neither grossed more than $2.1m (a$3m) or sold widely internationally. But there is a growing sense of optimism.
'I can sense a real shift,' says Rosemary Blight who produced the 2007 coming-of-age comedy Clubland. 'We are maturing. Producers are taking more responsibility and accountability for the ideas they are developing and are planning their slates with more rigour.'
The introduction of the new super-agency Screen Australia and the producer offset have stimulated debate about the kinds of films Australian producers should make. Many suggest fewer, more ambitious films - universal stories, told on a big scale by proven directors with international stars - is the way forward and would help win over local audiences.
Three films will test this theory in the next 18 months: Jane Campion's period romance Bright Star; Bruce Beresford's true story Mao's Last Dancer; and Scott Hicks' family drama The Boys Are Back.
And although only Baz Luhrmann (Australia, Moulin Rouge) and George Miller (Happy Feet, Babe) are consistently backed by the US studios to make Australian films in Australia, Zareh Nalbandian's Animal Logic, the Sydney-based special effects outfit whose credits include Happy Feet, is aiming to attain similar status.
It is producing Australia's first animated 3D feature Guardians Of Ga'Hoole, directed by US film-maker Zack Snyder.
But it is the anticipation ahead of the November 26 global release of Luhrmann's $100m-plus epic Australia that is helping inject the feelgood factor into the local industry.
Backed by 20th Century Fox, the film was produced, shot and cast entirely in Australia.
It is also an epic Australian film, starring two of the world's biggest stars in Nicole Kidman and Hugh Jackman, and delving into issues of national culture and identity at just the time the local industry is being forced to do the same.