IN SCOTT KIRSNER’S recent book, Inventing the Movies: Hollywood’s Epic Battle Between Innovation and Status Quo, from Thomas Edison to Steve Jobs, the author breaks down the forces behind the technological progress of the movie business into three categories: innovators, preservationists and sideline-sitters.The innovators continuously seek new ways to create and disseminate movies, while the others either resist change or sit back to watch the world go by.These days, however, we don’t need Hollywood executives to tell us if movies are transforming. Anyone unafraid of a mouse and keyboard watches videos online.Three years after the birth of YouTube, the general public has rediscovered its primal fascination with the moving image, and filmmakers have been taking notes.

At a panel discussion with a group of middle-aged film critics hosted by The Reeler in early 2007, I asked the lot about the boundaries of their frequently over-hyped year-end lists. If one of them discovered their new favorite movie of all time on YouTube, would it qualify for a spot on the list? Or would this influential bunch stick with the familiar channels—the neatly packaged studio offerings with a few trendy side dishes of art-house fare? Critical consensus breeds more critical consensus, and in their reticence, the critics mainly embraced the latter option without ruling out a possible break with convention.

“If I saw a great movie on YouTube, I know I’d be dying to write about it,” Entertainment Weekly critic Owen Gleiberman hesitantly admitted.

New York magazine’s David Edelstein urged everyone to “treasure the crackpots,” those willing to champion neglected works, such as the kind one might find in that frightening new terrain known as the Internet.

Well, the pot has started to crack—and at a greater rate throughout 2008 than ever before. After the YouTube Screening Room launched in June, director Charles Ferguson chose to make his Oscar-nominated documentary No End in Sight available on the site; a few months later,Wayne Wang premiered The Princess of Nebraska in the same space, which resulted in the first New York Times review of a YouTube-distributed film. Earlier in the year,The Cult of Sincerity premiered on the site and later shifted to Amazon, where it can be downloaded or streamed for a nominal fee. Now, new titles have started blossoming across cyberspace, from the mainstream realm to the specialty market: the documentary distribution sites SnagFilms, Jaman, IndiePix, B-Side, as well as NBC Universal’s Hulu and many more.The Criterion Collection launched an online rental service. A new venture called The Auteurs promises both “an online movie theater” and “a new social experience.” From Here to Awesome, “a discovery and distribution festival,” helps filmmakers directly connect with new audiences online. IndieGoGo provides a revolutionary fundraising apparatus for independent productions.

Even if the new best movie of all time hasn’t hit the web yet, the mechanism is there and ready for its arrival. Meanwhile, many studios appear to be headed in the opposite direction, attempting to preserve the sacred theatrical experience with costly operations like 3-D and IMAX. These epic technological undertakings have merit, but leave the little guys—those eternally struggling artists with their egghead cinematic visions—literally out of the picture.

Fortunately, the treasurable crackpots don’t need studio deals to reach the finish line. “As long as you’re not making a hundred million dollar movie, there are always ways to make money on YouTube,” Kirsner told me in a recent conversation. “You always have people in any sort of creative endeavor who want to push boundaries and use new tools.”

Collaborative art hit it big in 2008.The masterpiece may have been Barack Obama’s presidential campaign, but the movies didn’t do so bad, either. Brett Gaylor’s Rip:A Remix Manifesto, a documentary about copyright law featuring dance music wunderkind Girl Talk, allowed audiences to edit their own version of the film on its site. Joss Whedon’s Dr. Horrible’s Sing-A-Long Blog spawned a massive fan culture with a unique interactive online release strategy. EvenThe Dark Knight, big studio behemoth that it was, displayed the qualities of a classic alternative reality game with the cryptic promotional campaign that forced future audiences to engage with the plot long before the movie hit theaters.

The success of The Dark Knight suggests theaters aren’t dead yet. And its massive scale continues to provide the factory-based model of the movie business with its primary modus operandi. Nearly two decades ago, in 1989, two of the Top 10 box office hits featured Batman and Indiana Jones. Last year, with the tremendous cash cows The Dark Knight and Indiana Jones and the Kingdom of the Crystal Skull, that outcome remained the same.The formula hasn’t budged much, but those whose priorities don’t figure into it have discovered a new game.