But if celluloid has become a fading memory, the movies live on. It's more than coincidence that two highlights of 2012 - Martin Scorsese's Hugo and Leos Carax's Holy Motors - were audacious efforts to bridge the gap between the medium's past and its possible future.

For me the year's absolute best was Terence Davies' The Deep Blue Sea, a stark yet richly orchestrated period melodrama on the universal themes of love, lust and heartbreak. We can only be grateful this master filmmaker is alive and (too rarely) working.

Another old master is Roman Polanski, whose mordant comedy Carnage, based on an admittedly slight play, proved as meticulous as the rest of his work, with an unaccustomed allegro rhythm.

The year's very best comedy was Richard Linklater's hilarious ''true story'' Bernie - among other things, a reflection on whether artists deserve a special moral status, a question left provocatively unresolved.

Comparably tricky moral issues were raised by Kenneth Lonergan's Margaret, a harrowing post-September 11 drama with an extraordinary ensemble cast led by Anna Paquin as a precocious, obnoxious, and totally believable teenage girl.

Just as brilliantly acted, Paul Thomas Anderson's The Master fascinated partly due to its far-out leaps and wilful lack of resolution, confirming Anderson as the successor to Stanley Kubrick as the leading modernist of commercial English-language cinema.

Another commercial modernist, Steven Soderbergh, scored a deserved hit with Magic Mike, aided by a craftily chosen topic - male stripping - and a fearless supporting turn by comeback kid Matthew McConaughey (great in Bernie as well).

Fewer saw Haywire, the prolific Soderbergh's other 2012 release, despite an all-star cast surrounding martial artist Gina Carano as the action-heroine of the year.

Joss Whedon deserves a special salute as the creative force behind both The Avengers (pictured), the best superhero blockbuster, and The Cabin In the Woods, a tie with American Mary for best horror.

The two best Australian films by a wide margin came from expatriate writer-directors whose most personal statements could only be made at home: P.J. Hogan's Mental and John Duigan's Careless Love.

Aki Kaurismaki's Le Havre, a feelgood refugee fable with a sting, can be recommended as ideal viewing over the holidays, especially for members of Federal Parliament.

Other films worth more attention than they got include Ralph Fiennes' fierce Coriolanus, Joseph Cedar's ingenious Footnote, Andrei Zvyagintsev's dourly beautiful Elena, Scott Speer's exuberant Step Up 4: Miami Heat, Joe Carnahan's sombre The Grey, Pang Ho-Cheung's aptly titled Vulgaria, Oliver Stone's provocative Savages, Robert Lorenz's deceptively cornball Trouble With The Curve, and Madonna's nutty but compelling W.E.

Films I admired but would rank below their makers' best work include Goodbye First Love, A Dangerous Method, The Kid With A Bike, Looper, Moonrise Kingdom, Damsels In Distress, The Girl With The Dragon Tattoo, To Rome With Love, Killing Them Softly, You Instead, I Wish and J. Edgar.

Lowlights included the lacklustre The Amazing Spider-Man, the super-cutesy Beasts of the Southern Wild, the unfunny, reactionary Young Adult and the Jason Segel pity party The Five Year Engagement.

Whatever the drawbacks of digital projection, it has allowed theatrical distribution for many interesting films which otherwise would have gone straight to the small screen.

Even the most adventurous distributors have their limits: so far no one has been bold enough to take on the best film I saw at this year's Melbourne International Film Festival, Abbas Kiarostami's riddling Like Someone In Love. Well, there's always next year.