The CC Blog just posted a link to a Popular Mechanics story on pro-am filmmakers. It includes a list of website offering non-Hollywood movies and shorts for download; there's more out there than I was aware of.
I also recently listened to an IT Conversations show with a talk by Chris Anderson called "The Economics of the Long Tail". One of the points I took away from it, and one of the things that I think is so exciting about Participatory Culture, is that as we get more and more works tailored for niche interests, and as distribution costs diminish, the "hit machine" gets squashed. Or, more accurately, the curve gets flattened: more people find things that are exactly what they're interested in, rather than accepting the one-size-fits-all, throw-it-against-the-wall-and-hope-it-sticks methods of Hollywood and broadcast-model TV.
Of course, the old guard has economic concerns with this. There's a cutoff for what's profitable in the old way of doing things. When you have a full studio making a movie, you have to spend millions to make a movie (think unions and caterers), and have to make millions-times-two to make a profit. When the curve gets flattened, fewer movies make millions-times-two, and studios get hurt.
But on the flip side, the PM article mentions making a short for $25,000 that used to cost a million. Make $50,000, which used to be chump change (i.e. the caterer's tip jar), and you profit. The changing of the guard that hurts the old guard helps those willing to become the new guard.
I suppose it must have taken a while for buggy whip makers to fade away, but it couldn't have been fun to be them while it happened.