MICHAEL LYNTON has every reason to feel optimistic about the future of the film business. Since taking over as chairman and chief executive of Sony Pictures three years ago, his studio has consistently outranked its rivals. Last year, Sony had a record 13 films opening at number one at the US box office, and took record domestic receipts of more than $1.7bn ( 1.25bn).

Top of the heap were The Da Vinci Code, mauled by the critics but earning a pile, and Casino Royale, the widely praised rethink of the James Bond series, with Daniel Craig. Now, another blockbuster is in the wings:

Spider-Man 3, the latest in what is shaping up to be a surefire superhero series success.

Intriguingly, Sony chose to open Spider-Man 3 in Japan and Europe before the US . . . an unprecedented strategy, but one the company is well placed to emulate in future. A Lynton mantra is that the big studios and the media underestimate the power of non-US earnings, clinging to the belief that they essentially tag along on the coat-tails of the domestic market. That is no longer the case, with films such as The Da Vinci Code making two or three times as much outside the USA as inside.

Sony isn't the biggest media conglomerate to own a film studio . . . that honour lies with Warner Bros owner Time Warner . . . but it has the widest international reach, and the greatest sensitivity to the international market.

Sony is involved in film distribution on three continents and produces local TV in France, Germany and Russia. Its Japanese owners are, naturally, aware that they are sitting on the world's second-largest film market, which explains the decision to launch Spider-Man 3 in Tokyo. As an electronics giant, Sony is also well placed to lead the next generation of entertainment technology, starting with highdefinition DVD players.

Lynton, 47, has his own take on where the entertainment business is being led by corporate globalisation, and it's not where everyone might expect. Sure, his studio churns out its blockbusters, but that's not all. The real measure of the globalised industry, he says, lies in its diversity, its willingness to embrace new formats and languages, and its ability to find niche audiences as well as the masses.

"Looking at the box office list, you might think it's all about blockbusters and sequels, " he says, in an interview in his office on the old MGM lot in Los Angeles. "But if you peel back the next layer, what you're seeing is different sizes of pictures and different types of TV shows, more than in the past."

Sony isn't alone in pursuing what Lynton calls a "multi-label strategy" . . .putting out art and niche films through separate studio subdivisions. Sony has Screen Gems, which produces horror fare such as the Resident Evil series and The Exorcism of Emily Rose, and Sony Classics, which puts out everything from prestige documentaries to Chinese martial arts epics, such as House of Flying Daggers, and the work of Pedro Almodovar. And it doesn't have to be limited to that.

"We can serve the faithbased community, the African-American community, the teenage community, " Lynton says.

"It's contrary to the view of globalisation that suggests that everything is going to get bigger and more American, that McDonald's is going to take over the world. Sure, US films are the bread and butter. But in many countries, more than half the audience is going to films that are indigenous to that country."

Lynton's optimism is not dented by any of the challenges the industry faces . . . not by DVD piracy, and not by the internet. On the contrary; he sees most technological developments as a business opportunity.

"People in this town are very sophisticated about new technology, " he says.

"Whenever a new one has come up, the industry has grown in size every time.

That was true with paytelevision, and before that with home entertainment, and before that with network television. The industry is very adept at taking advantage of technical changes. Right now, we are at the crux of another one."

Not everyone shares Lynton's sunny assessment of Sony's prospects in the entertainment business.

When the Japanese moved into Hollywood in the early 1990s, they and their local studio chiefs went through some years of traumatic cost overruns, culminating in a $3.2bn write-down.

Even now, rumours persist that the studio can't contain its economic bottom line . . . most recently with news articles suggesting that SpiderMan 3 cost more than $200m to make and might even have hit $350m. Sony executives make a point of not discussing numbers, but they scoff at these figures.

"The [price tag] is well within the bounds of what these movies should cost, " Lynton says.

He is more interested in making the economies of scale work in his favour.

Not every film will be a hit, obviously, but with a slate of 20 to 22 films a year, Sony can afford the occasional risk. That explains, too, why the company feels more upbeat about its collaboration with Nick Park and Peter Lord's Aardman Animations (creators of Wallace and Gromit) than the Bristol company's previous Hollywood partner, DreamWorks Animation.

DreamWorks relied on films such as Flushed Away and The Curse of the WereRabbit to buoy the entire company. So when the box office did not match the films' critical acclaim, it created major headaches.

Lynton, by contrast, said he expected to leave Park and Lord largely to their own devices and use Sony's international distribution system to work the matching commercial magic.

The biggest change in the industry struck Lynton at a consumer electronics show in Las Vegas in January, where he realised just how dramatic a difference highdefinition video makes to the giant flat-screen TVs in American homes.

"The screen is getting bigger, " he says repeatedly, pointing to his own office flat-screen.

That not only makes home entertainment a rival to the multiplex, it also puts pressure on the industry to come up with the right technology. Sony's Blu-ray DVD technology seems well placed to become the industry standard. It is outselling its rival, HD DVD, by two to one. All but two of the top 25-selling HD titles are in the Blu-ray format.

Having blockbusters like Spider-Man 3 hitting the DVD market in the next few months doesn't hurt either.

Not only will Spidey be available on Blu-ray; so will spring's other big films, Shrek the Third and the third Pirates of the Caribbean.

"Blockbusters will determine which format wins, " Lynton says. By his smile, it is obvious that he fully expects to be the winner.