So far, so obscure. What makes Scheme different is that it is being made in almost transparent fashion, with the daily rushes being put out on the internet so that other film-makers, critics and websurfers can react, make suggestions and generally have their curiosity piqued. The film is being shot with a digital camera, and the plan is to distribute it primarily on the web and anywhere else kitted out with a digital projector.
That makes Scheme something of a first. As Nilsson has commented, most film-makers consider their rushes the equivalent of soiled underpants - something you wouldn't want even your own mother to see. "Being paranoid myself, I thought I would try it this one time," he said.
Most home-computer users do not have the bandwidth to download more than a minute or two of video footage in a reasonable time-frame, and even if they do download, the broadcast quality is generally not good enough to make it a viable alternative to the cinema, video cassette or DVD.
But that does not mean the internet is not very much a part of the film industry, or that its potential to revolutionise just about every aspect of making and exhibiting movies is in doubt. Mainstream films might still be confined to the multiplex on their first run, but the internet is already chock-a-block with low-budget films, wacky movies, foreign-language movies and experimental movies that aim to push the technological boundaries a little bit further - or at least find an audience.
Rodger Raderman, the chief executive of The iFilm Network, the San Francisco company hosting Scheme on its website (www.ifilm.net), believes online distribution of movies will become standard in the next two years. "Now that all the smart people in the world are focusing on this problem, everybody's going to be surprised at the speed at which it develops," he says.
Barely a week goes by without some internet-related innovation in the film business, and specialist websites are forever tussling with each other over who developed which idea first. The iFilm Network's main rival, sightsound.com, a firm in Pittsburgh, says that it was the first to put an entire feature film on the internet - Darren Aranofsky's cerebral arthouse hit, Pi.
Last week, sightsound.com announced what it called the first film by an established director to be made specifically for online distribution. The Quantum Project, a 40-minute film, is being put together by the producers of the metaphysical Robin Williams weepie, What Dream May Come, and directed by Francis Glebas, a Disney animation specialist. The film, about "physics, the world wide web, and spiritual mystery" is due out on the sightsound.com website in May.
The iFilm Network takes issue with both of these claims. The first downloadable film, it says, was a horror movie called The Last Broadcast, which premiered through a company called Wavelength last November and recently hit the news for its uncanny resemblance to the US box-office sensation of the summer, The Blair Witch Project. Likewise, says the iFilm Network, the first digital projection of a high-profile production was of the film Dead Broke, with Paul Sorvino, which made its debut simultaneously on its website and at the Tribeca Film Center in New York a few weeks ago.
Clearly, it is academic to argue the finer points of these disputes. The crux is that the technology is gaining pace, and the competition to extract commercial gain heating up at great speed. The iFilm Network had its website debut in February, sightsound.com in April. Both have attracted investment interest from media giants such as Disney and Time Warner. The challenge for the traditional studios, nearly all of which are now incorporated in global media conglomerates, is making sure that they don't get left behind in the great Internet revolution. Rupert Murdoch's News Corporation, which includes Twentieth Century Fox and the Fox television network, and Time Warner, and Disney, have been falling over themselves to form alliances with web portals, search engines and e-commerce companies.
Film marketing is already moving on-line. Internet advertising accounted for much of the appeal of The Blair Witch Project, and sooner or later the studios are going to have to radically rethink distribution as well. As Ruderman says: "The important thing is not being first, but making sure that you are not last."
What exactly is at stake? There are three main technological components in digital projection. The first is "broadband availability" - that is, ensuring that computers can access data at high enough speeds to make downloading feasible. The advent of high-speed ISDN lines, cable access and entirely new digital networks independent of the telephone system, will soon make this a practical proposition for commerce, with home use likely to follow shortly.
The second component is the ability of service providers to compress film images so as to make them easier and quicker to transmit. Broadly, compression involves sending only those elements of film footage which change from frame to frame, and saving bandwidth space on the rest. Microsoft, Apple and the online sound system RealPlayer are all working furiously to make this technology commercially viable.
The third component is the development of a playing device for PCs. Again, Microsoft, Apple and RealPlayer are grappling with this one, seeing the day when it will be not uncommon for a business traveller to download a couple of films and watch them on the laptop during a long plane ride .
Digital distribution is unlikely to kill the movies as we now know them. After all, nobody has yet devised a better environment than a cinema for watching big-screen entertainment. But the developments will make film exhibition cheaper and more flexible. Instead of cinemas committing to one film for a week at a stretch, they will be able to organise their schedules to demand.
For film-makers, a reduction in distribution costs will bring down budgets considerably. The internet will also make it much easier to find an audience. That's why websites such as ifilm.net and soundsight.com, exist - and why their enterprising owners are hoping that they soon will be the new kings of Hollywood.