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Back in the dog days of last summer, after the exhausting hype for The Phantom Menace and the unfulfilled erotic promises of Eyes Wide Shut, the landscape of contemporary moviemaking began to take on a jaundiced Death Valley hue.

All those late-nineties moans from the old cinema champions such as Susan Sontag and Andrew Sarris seemed to make sense: The art form was dead, there was nothing new under the sun, and preprogrammed consumers just went to the multiplexes to punch in their debit cards, eat junk food, play video games and watch digital cartoons. Plug us in, load us up and, 90 minutes later, dump us back out on the asphalt, $40 lighter.

Then, somehow, by the end of the year, came the new blossoming. On the Christmas party rounds, the mood about the movies was unusually buoyant. Did you see Being John Malkovich? Did you catch The Limey? Fight Club? Magnolia? The Straight Story? Boys Don't Cry? The Insider? And how about that Toy Story 2?

These films were not just a monkey-barrel full of laughs and tickles. They often dealt in death, loss, anger and anguish, and were critical of consumerism and family values. Each of these films, in one way or another, brought a touch of poetry, a shock of delight or an artful poise in telling a tale. They weren't predictable and did not adhere to the Syd Field's screenwriting dictum that "the days of ambiguous endings are over." No wonder they felt like such a relief.

What you expect from an American movie is a guy and a babe leaping hand in hand ahead of some apocalyptic fireball, in some unlikely shoot 'em up with intellectually arrogant conspirators. What you don't expect is a movie such as Being John Maklovich, which introduces, in its first five minutes, a 20-metre puppet version of the play, The Belle of Amherst, based on the poems of Emily Dickinson, and progresses by tunnelling into John Malkovich's head. Take that, Arnold, Bruce and Mel.

That heady sense of enthusiasm is evident in the Village Voice's current First Annual Film Critics poll. The Voice's J. Hoberman notes in his year-end review that "the autumn was wonderful for most critics." He noted that the movie century was clearly over, but, as a sendoff, "1999 proved wildly backloaded." Michael Sragow, on the salon.com Web site, offers: "We are witnessing either the rebirth of American filmmaking or the galvanizing flailing of a twitching corpse. In any event, there's ferment in the air -- and some of it is wafting off the screen."

Away from the art-house crowd, last year also produced some unexpectedly ingenious out-and-out crowd-pleasers, such as The Matrix, The Blair Witch Project, South Park: Bigger, Longer and Uncut, and The Sixth Sense, which blended creative concepts with entertaining execution. For a change, in their year-end reports, reviewers weren't struggling to remember 10 decent films for their top-10 lists, but to figure out which of the 40 or so good films to exclude: Election or Rushmore? The Thin Red Line or Three Kings? All are mainstream American movies. Why would anyone bother to remember it was also the year of The Haunting, The Mod Squad, End of Days and Instinct. Yet, something special did happen at the end of last year. Whether it represents one small oasis, or a trend toward a global cooling of the movies, is still unpredictable. At least some of the causes can be ascertained. The Business: Thanks for the Menace The year 1999 was a good one for the movies in more than one sense. They reeled in a record $7.3-billion in North American grosses at the box office (up nearly 9 per cent over last year's record $6.8-billion), topping off a decade in which box-office growth was a whopping 65 per cent.

Much of that growth came from The Phantom Menace ($430-million), Austin Powers: The Spy Who Shagged Me ($230-million) and Big Daddy ($163-million), but some went to distinctly smarter and artier fare as well. Jar Jar Binks and the rest of the Lucas digital creatures are owed a large thank-you.

With The Phantom Menace looming, rival studios avoided expensive releases and that left some valuable breathing space. No Batmans, Lethal Weapons, Speeds or Armageddons darkened the Earth. The one official summer blockbuster, Wild Wild West, was a wobbly success, finally earning back its massive $170-million cost after foreign sales.

What replaced the summer blockbusters were movies that became blockbusters by default: The Blair Witch Project ($140-million, against a budget worth the cost of a decent car) was a freak; The Sixth Sense (which should pass the $200-million mark this week) was released with minimal publicity -- hung out to dry by its studio might be more accurate -- and became a $200-million monster, mostly on word of mouth.

The crap-shoot economics of the blockbuster (huge cost, maybe a big hit) have increasingly been questioned in any case. In 1998, Speed 2 and Batman & Robin both belly-flopped, the rules subtly changed. A number of big projects were delayed or shelved, and the studios started looking for lower-risk projects. The success of Shakespeare in Love, which clobbered Saving Private Ryan at the Oscars, also helped change the climate toward smarter rather than louder. The Youth Vote: More than Pie Everyone running Hollywood knew, following Scream and Scream 2, that young TV-oriented audiences would matter a lot in 1999. At times, it has seemed that half the movies in the theatres were geared to Dawson's Creek and Buffy the Vampire Slayer fans. The way young audiences changed movies was unexpected.

The Sixth Sense, The Matrix, The Blair Witch Project were the big youth hits, eclipsing the Simply Irresistible and Varsity Blues hype. High-school comedies ranged from the puerile ( Varsity Blues, American Pie) to the exceptional, including Go, Rushmore and Election.

The youth movie appears to be an American genre that still allows considerable innovation. The success of The Matrix and Blair Witch, and even, to some extent, Being John Malkovich, are about the smart side of the new Web-based youth culture.

The skills these stories address are virtual-reality skills -- navigating, reading the codes and maintaining poise in bewildering environments. Last year proved there is, after all, more to youth movies than the quest to fornicate with the family dessert. Pent-up art-house fever The sense of celebration about recent movies is, in part, a sense of relief -- after a couple of rough decades. Peter Biskind's book about American filmmaking in the seventies, Easy Riders, Raging Bulls, captured the current melancholy about mainstream (almost synonymous with American) filmmaking.

From high-minded critics (Susan Sontag, Andrew Sarris) to directors, to your mom and dad, the message is the same: The glory days of the movies are over. When exactly the glory days occurred is a matter of some debate, but there's a consensus that they ended.

The turning point was the 1977 release of the first Star Wars movie, when George Lucas demonstrated to the studios -- a fact later confirmed by Steven Spielberg -- that movies aimed at 12-year-old boys were the best way to make unbelievable amounts of money. Don Simpson and Jerry Bruckheimer ( Days of Thunder, The Rock) nailed down the formula (explosion + quip + explosion = entertainment) and grownups started bringing Advil to the movies.

Pauline Kael, in a famous 1980 essay, was there to mark the historical moment. "Why Are Movies So Bad?" blamed the shift on the corporate-marketing types who took over the studios in the late seventies. Movies, she wrote, had become the equivalent of Brave New World entertainment, by the Professor of Feelies in the College of Emotional Engineering.

More recently, Phillip Lopate, a literary intellectual with an interest in film, pondered the extent of the problem in an essay, "The Dumbing Down of American Movies." He asked: "Why is 'dumb' such a metaphor for the American mood?"

This goes well beyond the movies. There's the willful stupidity of reactionary politics, spectator sports, and television's attempt to find universality in infantile behaviour. The movies of the past few years -- from Happy Gilmore to Pulp Fiction to Forrest Gump -- have simply drawn a big arrow to the social equation between dumb and cool.

Now there are a few rumblings of a resurrection. When Sam Mendes hit the jackpot with American Beauty -- despite its nasty family values and messy ending -- the pleasure of the film is amplified by knowing its mordant humour is shared by so many. Also, with its $15-million budget and $70-million box office, American Beauty has very similar cost-to-profit numbers as the teen gross-out hit, American Pie. In any world where Beauty can be as popular as Pie, there's cause for celebration.

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