Movie Gravity: Hollywood + Bollywood

Here is an unsettling news: US and Indian filmmakers sign Hollywood-Bollywood deal. In my mind, this means outsourcing to India for movies just as good as the software coming from there, it means working together to control distribution and selection of movie material, coordinating moves so that the huge garbage spewing movie monster we now call Hollywood would have no competitor, ever.

Maybe I am just paranoid, but where are the Internet based movie-hacker studios that should have sprouted everywhere with low budget, but very cool films? Do they all stop at small stuff on YouTube and then get a job in fast-food? Where is the "free market" competition in entertainment?