There was a bitter Breton joke back in the days when oil spillages from supertankers off the Brittany coast were a regular occurrence: 'We'd be rich if we could work out how to pick it up.' It's a thought that springs to mind during what are now unequivocally tough times for the film industry.

Our equivalent of Breton oil is customer demand for entertainment. There is a seemingly insatiable appetite for amusement, at least in the developed world.

Actually it's more than an appetite, it's a demand for ubiquitous entertainment. Many people seem to think it is a human right to be plugged in or wired up to content during waking hours, and the reaction to talk of economic collapse is not to turn off but rather to crank up the volume.

While it's not difficult to observe the social phenomenon - count the tell-tale white headphones during your next commute - it has proved less easy to find a means of turning it into profit.

The film industry has not been quick off the mark; indeed it often appears to be in denial. Too many seem to take a false comfort in the idea that film customers are relatively immune to the charms of the new media and the anytime, any place, anywhere culture. The number of customers downloading films, for example, is growing fast but is still tiny in comparison to any physical alternative. If you had a dollar for every time someone said, 'People will never watch film on their computers,' you would sail through the downturn.

However, those countries where the Olympic Games was streamed online will attest to how quickly workplace computers were transformed into televisions. But the most obvious proof of potential comes from piracy. Films are being downloaded on a huge scale, it's just that no-one wants to pay for them. It's Breton oil.

The world is changing in a more fundamental way, however. The story of the last 10 years has been the rapid advance of consumerism. 'The customer is always right' has become more than a platitude, it is now a creed in large parts of the world.

For business, this boom in demand has been enabled by technology and fuelled by a probably unsustainable growth in credit that has increased spending power dramatically. You can make a strong political argument against this kind of consumerism but, like globalisation, it's unlikely to go away any time soon.

And it leaves film with problems. This is a top-down business. Demand is not a driving force outside Hollywood and there are parts of the world where 'commercial' remains a dirty word.

The studios may operate in a market environment but the customer is hardly king. The global scale of their ambition is necessarily more push than pull, and they shift uncomfortably between periods of safety-first conservatism and times when there is more money than sense. We are definitely now in the former.

The lack of a link between demand and production could not be more clearly illustrated than in the data, which shows the number of productions in Europe, for example, continue to rise while the box office has barely moved.

This is not the supposed 'Anglo-Saxon' argument that sees value only in profit. Subsidies can be justified in terms of cultural importance and in the hidden benefits to nations, such as tourism and prestige. But the link with customers will become an increasing issue for business and government, which is why distribution has to be given far greater prominence - at least on a par with our obsession with the opening-weekend box office.

A question that has become a cliche at seminars - and repeated this week at a Swedish Film Institute event in Malmo - is, 'Where will the film industry be in five years'' The answer is that it has the potential to scale new heights but first it has to go through the tests of fire and water: the credit crunch, digital change and so on.

If we are to turn our Breton oil into gold, the industry needs to refine its approach.

Topics