Los Angeles - The 81st annual Oscars kicked off with a bang Sunday night aiming to lift the economic gloom hanging over the film industry with a revamped format on a spectacular stage framed by a crystal curtain that aimed to created a dream nightclub atmosphere.

Host Hugh Jackman opened the show with a cabaret number about the five films nominated for best picture that saw him step into the audience and carry best-actress nominee Anne Hathaway on stage for a duet. The song-and-dance routine earned him the first standing ovation of the night.

The first prize of the evening went to Penelope Cruz for best supporting actress in Woody Allen's movie Vicky Christina Barcelona.

"I always felt that this ceremony was a moment of unity for the world," said the Spanish star, 34, "because art in any form has been, will be and will always be our universal language."

Slumdog Millionaire, about the rise of a slum-dwelling Mumbai orphan to the final of India's most popular quiz show, was the favourite to dominate the biggest night of the Hollywood calendar. The rags-to-riches story exhibited its uncanny magic on the red carpet, where despite all the big names arriving at the Kodak Theatre it was the movie's young stars, led by Dev Patel and Freida Pinto, who made the strongest impact.

The movie's producers only decided to fly in the youngest actors after worries arose that the contrast between the glamorous event and their everyday surroundings in the slums of Bombay would be too wrenching.

The stars started rolling up more than an hour before the late afternoon ceremony, with best-actress nominees Angelina Jolie, Melissa Leo, Kate Winslet and Anne Hathaway, and best-actor nominees Sean Penn, Richard Jenkins and Brad Pitt all drawing shrieks of excitement from film fans and TV presenters.

Adding to the star power were singers Madonna and John Legend, teen stars Vanessa Hudgens, Miley Cyrus and Zac Efron and Penelope Cruz, Sarah Jessica Parker, Johnny Depp, Robert Downey Jr and George Clooney.

Producers promised to shake up the usual Oscar conventions with a number of surprises - meant to halt the show's steady slide in ratings and lack of interest among younger viewers who are the lifeblood of the movie industry.

The film sector has been badly hit by a sharp decline in purchases of DVDs, which in recent years have contributed more to studio revenues than box-office receipts.

Among the changes introduced to the Oscars is the transformation of the Kodak Theatre into a "dream nightclub" and the exclusion of some of the highest-profile stars from the closely watched entrance, to preserve their fashion secrets for the Oscar telecast itself.

Slumdog Millionaire, directed by Danny Boyle, has eight nominations compared to the leading 13 nominations for The Curious Case of Benjamin Button. However, the Brad Pitt star vehicle is not expected to win as many of the major prizes as the India-based movie.

Besides those two films, the other contenders for best picture are Frost/Nixon, Milk and The Reader.

The best-actor nominees are Richard Jenkins, The Visitor; Frank Langella, Frost/Nixon; Sean Penn, Milk; Brad Pitt, The Curious Case of Benjamin Button; and Mickey Rourke, The Wrestler.

Best-actress contenders are Anne Hathaway, Rachel Getting Married; Angelina Jolie, Changeling; Melissa Leo, Frozen River; Meryl Streep, Doubt; and Kate Winslet, The Reader.

Up for best director are David Fincher, The Curious Case of Benjamin Button; Ron Howard, Frost/Nixon; Gus Van Sant, Milk; Stephen Daldry, The Reader; and Danny Boyle, Slumdog Millionaire.

The foreign film nominees are The Baader Meinhof Complex, Germany; The Class, France; Departures, Japan; Revanche, Austria; and Waltz With Bashir, Israel. (dpa)