The number of movies produced has fallen from a high of 111 in 1977 to 50 in 2004; studios have dwindled from 11 in the 1970s to just three; and the total number of cinema theatres in the country today is just about 300.
From lack of ideas to Bollywood, from viewer disinterest to religious intolerance, virtually everything is being blamed for the sorry state of affairs in Lahore, the industry capital.
"It is pathetic," says Aijaz Gul, a film critic attached to the Pakistani chapter of the Network for the Promotion of Asian Films, talking about the fall of Pakistani cinema.
The highest paid star in Pakistan commands a price of one million rupees, and most movies - in Punjabi, Urdu or Pushto - get made for under Rs.7 million. This is nothing in comparison to Bollywood.
Some good films are still made. Shootings still take place abroad - in Malaysia, Scotland and Spain. But the movies are still flopping.
Yet there was a time when Lahore dared to think it would be like Bollywood - some day. Today, after battling one crisis after another, things have reached a flash point.
Experts say script writing has reduced to re-writing the lines of Indian moves, cost of production has soared beyond recovery levels, the industry is not attracting talent, and it has not been able to widen its technical, investment, artistic and professional base.
In defiance of all principles of planning, many scripts are penned on the sets even while shooting is on. This makes movies financial unviable.
"What is wrong with our film industry?" asked an anguished Sajjad Haider Malik some time ago. "The answer is: everything."
Another industry insider is more candid: "Pakistan's cinema has hardly ever been out of crisis. Its ability to survive has been perceived to have declined with the passage of every year."
Indian films and their easy availability on cable TV have contributed to its choking.
Bollywood productions command a huge following across Pakistan, and Indian stars have millions and millions of fans.
Taxi driver Faisal, an admirer of Amitabh Bachchan and Shah Rukh Khan, was contemptuous of the local films.
"I never watch them, they are totally hopeless," Faisal told. "I can tell you nobody watches these movies."
That may be an exaggeration, but Indian film music is a must for Pakistani marriages. Restaurants play Hindi film songs. And there is a huge demand for them.
Said Karachi resident Yousuf Ibnul Hasan: "Indian movies are seen in Pakistan even before they are released in India! They are smuggled to Pakistan. Everyone loves them."
Pakistan's ministry of culture reiterated Thursday that it had no plans of allowing Pakistani cinema halls to screen Indian movies - until the Jammu and Kashmir dispute is resolved.
But the situation, said Gul, is now beyond redemption.
"We keep telling the government: what is the use of banning Indian movies? Everyone watches them any way, everyone likes them any way, and they are easily available.
"In any case, has the ban helped Pakistani films? It has not. So it will be better for the government to allow Indian movies to come in legally and earn tax on it," said Gul.