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By Marc Killinger

Chilean movie director Silvio Caiozzi says the country's film industryis in the middle of "a magnificent moment." His heralded 1999 film,"Coronacion" (Coronation), based on the novel of the same name by Chilean writer Jose Donoso, was shown recently as part of the "Made in Spanish" series at the 48th annual San Sebastian (Spain) International Film Festival.

Caiozzi says his optimism comes both because the government is providing substantial financial support for the industry, and because he's seen a change in the idiosyncrasies of Chileans - they're exhibiting less prejudice against Latin American and Spanish films.

Such prejudices, he explains, are reinforced by the terrible sound quality in many Chilean movie theatres.

"This is one reason why many people prefer movies with subtitles," he says.

A record setting number of feature-length Chilean films -17 - have been released in the last year and a half. "Coronacion" is Caiozzi's fourth feature film, for which he was awarded Best Director at the recent Montreal Film Festival. It tells the story of the decline of a Chilean aristocratic family at the beginning of the last century, and stars Julio Jung, Maria Canepa and Adela Secall.

Caiozzi is currently working on another feature film, " El pianista del silencio" (The Pianist of Silence). "I've got the screenplay, which tells the story of a pianist who accompanies silent films and whose livelihood is threatened by the debut of movies with sound." The director was born in 1944 and works in films and television. As director of photography he produced innumerable works with fellow Chilean director Raul Ruiz. He was also cinematographer for Costa Gravra's film, "State of Seige." Two of his other feature films, "Julio comienza en julio" (Julio starts in July) and " La luna en el espejo" (The moon in the mirror) have received awards at film festivals in Venice and Trieste, Italy, Huelva, Spain and Havana, Cuba.

In related news, the seventh annual film festival in the rainy river city of Valdivia, Region X, opened last Saturday to a standing- only crowd of 1,000 people. This year's festival is dedicated to three Chilean supporters of the film industry: Hector Rios, photography director for "El chacal de Nahueltoro" (The wolf of Nahueltoro); actress Delfina Guzman; and Helvio Soto, who produced "Caliche sangriento" (Bloody Caliche).

The big news at the opening ceremony was the announcement by Santiago Larrain, cultural affairs director at the Chilean Foreign Ministry, that his office would double its financial support for the southern film festival next year.

The audience also applauded one of the short films shown, "Los pajaros en jaula pueden volar?" (Can birds in cages fly?), by Chilean director Luis Briceno, who has long resided in Paris. The work was awarded best animated short documentary at the recent Santiago International Short Film Festival.

The Valdivia Film Festival lasts through tomorrow, Oct. 6. For more information call (56-63) 215622, see www.cineclub.uach.cl or email cineclub@uach.cl