Youtube and vimeo probably weren't originally designed as "distribution systems for the little guy", so much as "I want to share this cat video/student film". The point being that they weren't meant to be a distribution system any more than a DVD in and of itself is a distribution system. They're a type of media which makes the work of distribution systems easier. Blogs were, at the time, the distribution system, and youtube/vimeo were a new, easy to use media that made distributing to a wide audience easier (no more 'codec' issues, etc.)

The fact that they have become distribution systems in their own right is a testament to the fact that content creators will always create, and will try to distribute their creations in any way that they can. People will often use something counter to it's original design, and it's smart companies that can recognise that use and restructure their operation around it.

The problem isn't that only the big guys get into the cinemas - in a free market, that might still be the case. The problem is that the little guys can't get into the cinemas, no matter how high the quality of their product. The only way that they can is by bowing down and paying fealty to the big studios who didn't actually contribute anything to the production.

The problem that the big companies are encountering now is that new media has been showing up which works without their tightly controlled distribution methods. Want to make a TV series? You no longer have to sell it to a studio or be stuck on some form of local station. You can distribute it yourself, to more people than the traditional methods would ever allow, and you can do it easier. The problem that the studios have is that you no longer need to be on a TV show or in a cinema to get seen. They're not entirely irrelevant yet, but they're no longer the only way to view content.

The problem with piracy is that people are taking the job of distribution out of the hands of the people who either created or paid for the rights to distribute it. It's a big blow for companies that add no real value other than distribution, which is why they're claiming massive losses and jobs lost. They can't reconcile the idea that you can make as much money (if not more) by selling the same product at a lower cost to a wider audience. The pirates saw an opportunity and stepped in. Once the big companies can figure out how to adapt their business models to meet what consumers actually want, they'll start to make a profit, and everyone will be all the better for it.

The last thing that this opening of the market (and that's what this internet revolution is) means is that quality will increase. Once distribution isn't a case of "You get what you're given, and you'll thank us for it", then the producers of content will have to start competing not in price but in quality for the consumer's dollar. People can pick what they want to watch when, now. They don't have to catch it at the cinema or have to go without until it makes it to DVD. To make them want to watch something at the cinema, then the product actually has to be worth watching at a cinema. If you want someone to pay money for your DVD box set, you have to make it worth spending money on. If there's something getting produced which you can get for cheaper, in a way that's more convenient to you, then the content would have to be amazing to get you to pay for the more expensive option.

Anyway, this has been a long, rambly rant. I'm hoping that I didn't cloud issues too much, or tangent too often, or outright contradict myself. Every word I wrote, I meant at the time I was writing it.