Lord David Puttnam this week urged the British film industry to be bolder in engaging with audiences online – or risk losing out on many of the opportunities being created by the digital revolution.

Puttnam, president of the Film Distributors Association was speaking at a breakfast event for its members. He told an audience of British distributors that the industry would only see the full benefits of the digital revolution if it worked together – producers, distributors and exhibitors – in developing new business models and ways of reaching audiences.

“The film industry’s success will be defined by its ability to harness digital technology. He said distributors had to continue to support the move to more digital prints and cinemas and called for protection of investment in digital film’s future.

“The UK Film Council is facing reductions in spending – as more National Lottery money is moved towards the London Olympics in 2012 – but that investment in the digitisation of the film industry has to continue. This is no time to reduce funding for specialised distribution”.

Puttnam said issues that needed to be addressed if the industry was to benefit fully from digital included investment in talent – and that film and television needed to continue to support the National Film and TV School and initiatives through Skillset.

He also said that the distribution business needed to revisit the issue of release windows. “Today’s audience demands access when they want it in formats that they want it in. Content on demand is not a genie that can be popped back into the bottle”.

“This is an area where the industry has to come together. Exhibitors have to come to the table. If there is no dialogue there will be no progress”. Lord Puttnam said he understood the concerns of some that “protectionism” was more attractive than “openness” in the current climate, but said this approach failed to reflect what was happening with consumers and would ultimately be a missed opportunity.

The Digital Britain report had struck the right balance in seeking to protect intellectual property, said Puttnam, and added that “communication is the key – telling people that what they are doing is wrong – followed by a proportionate, graduated follow-up”.

Meanwhile, Puttnam also made a robust defence UK Film Council and its work in response to Conservative leader David Cameron’s attack on “quangos” – unelected public funded bodies – earlier this week.

The Labour peer said it made no sense to slim down or scrap bodies such as the UKFC or media regulator, Ofcom. “All I can say as someone who spent 30 years attempting to push through film policies, it’s the maddest thing I’ve heard in a long, long time.”

The Tories’ intentions toward the UK Film Council are yet to be made clear. Ed Vaizey, the shadow Minister for Culture, has floated the idea that a Tory government may add to the UKFC’s responsibilities by including video games in its remit.