Do you understand the logic of nominating a film for Best Picture, but not Best Director?

Yes, I was disappointed in the moment. But when Nicole was nominated a few minutes later, I did cry, actually. Not rivers of tears, but I was like, "Oh, my god. We're there!" And for the first time in twenty years a musical was nominated for an Academy Award, I was somewhere else. Because it was all about the film. Everyone who has been nominated for Best Director has done incredible work. I have no problem with that. It's art meets sport. It's really not about one picture being "better" than the other. There are five films that have pushed the medium this year, and have had a light shine on them. And if nothing else happens with Moulin Rouge!, well bravo, we're already there. There's an audience that has been recognized, and nothing can change that.

Did you feel that the Directing "snub" was personal?

Well, I was nominated by the DGA (Director's Guild of America.) And the moment the lack of an Oscar nomination happened, I made an immediate rule inside my head that I would not look back at that, that I would not be drawn into that, that there is no point in it. And I am nominated for the film as one of the producers. Having said that, I am a member of the DGA, and that is the entire body of directors. And the Academy is a smaller group. How it happened and why it happened, I can't really work it out and there is no point. If I look back at that, I'm falling into that terrible trap of living for that. And that is a terrible thing.

In the end, what does an Academy Award win me? It's incredible, yes. But all it really means is that a light has been shone on a that particular film. I grew up in the middle of nowhere of Australia, and we had we called "cheap television." You know, junk. Singin' In The Rain, Citizen Kane, The Red Shoes, you know the crap they seriously did not want back then in the 70's. But every once in a while, it would be like, "Lawrence Of Arabia" nominated for umpteenth Academy Awards. And there was no question we were watching that movie. There was just no question, it was an Academy Award winner. You just didn't think about it. So that is valuable.

But you know, when I think of the all the people behind the film, what Nicole did, what Ewan did, those four months in Australia...they could have been the laughingstock of the world. So I owe them that, I'll do that, and then I'll move on...

There are obvious stylistic similarities between Strictly Ballroom, Romeo + Juliet and Moulin Rouge! But also many differences. Did you ever consider applying the song form to either of the first two Red Curtain films?

In (my) films, they all have basic rules. Primary, simple stories is number one. You all know how they're going to end before they begin. Number two, heightened creative worlds. And third, the device, the device, the device. Like in animation, you're constantly aware its heightened reality. As a filmmaker, you constantly need a device to remind the audience that you the storyteller are there. In Ballroom, it's dance. In Moulin Rouge, they break into song, and that was always going to be the biggest leap. So it was a commitment that we'd get there. But Strictly Ballroom, it is essentially a dance-musical, is it was a different device.

To answer some of the critics, do you feel your work is any more simple or less complex than other musicals?

No, I don't think so. In the musical form, the basic rule is this: you have to make the story thin, because the execution is complicated. Let me give you an example. Say you have a psychological drama. (The scene is) "I love the boy, I live for love, love is everything." Then you have the boy, "I don't love you, I don't want to fall in love, get away from me." That's maybe a page and a half, and 90 seconds of screen time. But our film is a musical, so that scene is four and a half minutes long, which is an eternity in screen time. So you need to extrapolate, but where do you get the screen time from?

There are a lot of great attempts at screen musicals, and a lot of which I love, but you can see where they try to incorporate a psychology story to make the main moments of drama advance, and (then) the musical segments, but they don't go together. About the only time that approach has succeeded in the past is where it is a Greek chorus, where it comments on the story. Cabaret is a perfect example. It's naturalism (in the drama) and then the musical numbers comment. The live within the narrative as parallel.

And this, not coincidentally, was a mechanism used very successfully by Shakespeare. Because he had to play to 4,000 people, some of who were sweeping the streets, and the Queen of England. People from all different types of backgrounds, simple-complicated. So by having a story we already all know, but telling it with different levels of complexity, you can read different things. A twelve-year old will read Strictly Ballroom as Dirty Dancing, and that's great. A more complex mind says, "Oh, I get it. That's a metaphor for oppression." They'll get the second layer in that. You play them more and more, and I designed them to be viewed over and over again.

I can't say how many times people have come up to me and said, "Boy, Moulin Rouge!, you really cut that. It sure is different than the last time I saw it." That's because it's cut like symphonic music, or a Beatles album. If you play Sgt. Pepper's over and over again, you're relationship with it deepens. And you grow with it more.

Do you think something like Dancer In The Dark, which is kind of the antithesis of something like Moulin Rouge!, do you think that is a dead end?

Nor really. Look, I know Lars (Von Trier) really, really well. And, by the way, Nicole Kidman is currently in Sweden being tormented by him as we speak. (Laughs) But what Lars is doing is interesting. Lars is on a parallel journey (with me), he is interested in pushing the form; Lars started very baroque, and has gotten more and more minimal. And I started in 16mm documentary dramas, and I got more and more baroque.

However, the similarities between Dancer and Moulin is that both have very primary stories - that is (they are both) a melodrama, and they tell the major emotional moments through music. And both quote The Sound Of Music, which has got to be a profound connection! And Lars is, like me, looking for a musical language. And his spoke to some people very profoundly. I was looking for a very popular form that could play on very many different levels with an audience.