Zaffar Abbas BBC correspondent in Islamabad

In recent years dozens of cinema houses have closed or have been replaced by shopping centres.

The budget we shoot for a whole film is used by film-makers in India on filming just one song Sangeeta, Lollywood film-maker

Experts say falling production standards and the video and DVD culture have lowered the appeal of Pakistani movies.

But at least now some young film-makers are trying to carve out a new future with creative, less commercial works.

Budget constraints

Lollywood, as the Lahore-based industry is known, still churns out almost a film a week.

But it is not enough to keep the industry going in the wake of competition from better produced movies from elsewhere in the region.

Bootlegged foreign videos are often cheaper than Pakistani films

Almost all Lollywood movies are musicals, much like their counterparts in Bombay, also known as Mumbai.

But there the comparison ends.

Actress-turned-film-maker Sangeeta has seen the ups and downs of Lollywood over the past three decades.

Now she believes the competition from India is overwhelming.

"The budget we shoot for a whole film is used by film-makers in India on filming just one song," she said.

"Our competition is very tough, and that's why our Urdu films are doing very badly."

Worthless ban

Indian films are actually banned in Pakistan.

But given the bustling bootleg markets, it is clear the ban is virtually worthless

Pakistani production values have fallen off

The latest Indian and Western films arrive here on video or DVD within days of their theatrical release.

A salesman in Lahore's bootleg market told the BBC they were actually cheaper to buy than Pakistani videos because the latter were protected by copyright.

But many people argue that it is not just competition from bootlegging and cable television that has stifled film-making in Pakistan.

They see Lollywood's low production values, formulaic story lines and a propensity for gratuitous violence and obscenity as being responsible for driving away film-goers.

Recognition

But there is some hope.

Over the past few years a new breed of young and independent film-maker has emerged to experiment.

Farjad Nabi is one whose eclectic style has won him a number of awards at regional festivals.

Farjad Nabi says art films can attract attention

He says there is no reason why less commercial films cannot do well in Pakistan.

Mr Nabi says that since Indian art movies have been doing well on video and DVD in Pakistan, there is no reason why creative work from Pakistan cannot attract attention.

Some of these independent film-makers have made the most of the cheaper digital technology available to produce high-quality movies.

So far none has been a huge commercial success, but some have earned recognition both at home and abroad.

At December's Kara Film Festival, organised by independent Pakistani film-makers, the message from the younger generation was clear.

Regardless of the difficulties, film is a passion they cannot live without.