Australian films can turn a profit as long as they avoid trying to go head-to-head against American blockbusters.

However, we need to invest in some failures along the way to ensure the viability of the local industry.

That is according to Dr Errol Vieth, co-author of the new Historical Dictionary of Australian and New Zealand Cinema, published internationally by Scarecrow Press in November.

Dr Vieth, of Central Queensland University, said Australia's industry had the creative ability and the low-cost structure to ensure that successful films could make money.

However, the industry needed to maintain a certain level of production to prevent the loss of expertise, especially now that local television drama production was also being squeezed.

"There's no doubt that film is a boom or bust sort of industry. For example, the Australian industry turned out 44 films in 1911, which made us the most prolific filmmaking country in the world, and the 1970s were also a prolific period," he said.

"The point is that these boom times provide the momentum and expertise to sustain the industry but much of the time Australia is dependent on government funding to prevent the death of a film culture.".

Dr Vieth said governments needed to remember the remarkable spin-offs possible from film success, the most recent example of which was when New Zealand was able to reinvent itself as Middle Earth.

The author said funding bodies were necessary but care should be taken that their decisions did not overly influence the type of films making it to the screen. He said that in the past a small group of people (or in some cases just one person) was able to dictate the flavour of Australian films for years to come.

The new dictionary, including a timeline and analysis overview, was co-authored by InfoCom's Associate Dean Research Dr Errol Vieth and Dr Albert Moran of Griffith University.