Interesting points, and yet another reason we need to meet up sometime :-)

Inevitably I've been looking at things through the film lens - I like making music too, but I was never so talented or commercially inclined as to expect to make a living from it. One key difference between those fields is the revenue schedule, and it's lucky for the film industry that its products are harder to duplicate just by virtue of the file sizes involved.

A musician definitely needs a producer and marketing to really shine in the marketplace. And the revenue from touring is typically offset by both fatigue and the cost of bringing a band on the road (few musicians play an entire concert solo - if nothing else, they usually have someone working the sound at the back of the room). On the upside, the marginal cost of writing a single song is relatively low, there's micro-revenue (and practice) to be had from busking or playing local venues, and there's no additional marginal cost for covering popular songs in these contexts (while there are the marginal benefits of practice, pleasing the audience, and working with a known quantity).

With film, you traditionally need a much bigger team and correspondingly higher inputs of money and time. Now, it can be done very fast; I've worked on a great little buddy comedy that was shot with a crew of 3 in 2 weeks, but even there the start-to-finish for the project was around 6 months and the total budget was something like $50k. And while it is possible to do much smaller projects, such as shorts, music videos, commercials etc., the economics are very painful - skinny budgets up front, and zero revenue tail. You hope that the good projects can be parlayed into negotiating leverage on the next budget, but at the independent level there's a constant tension between your take-home pay (which you need to live on) and the demands of the project, all of which cost money. I've most often been a sound guy, which is one of the smaller departments, but even there you need to consider whether to add additional equipment for the demands of the shoot, be ready to feed your assistant if the production facilities are no good, and accommodate very fluid production schedules. At every level there's a temptation to cannibalize the budget in order to make the final product more attractive.

The big upside of the internet is increased exposure, for projects that might otherwise have been screened only once or twice and then died. The downside is that now there's even less incentive for people to put money on the table as 'exposure' gains more currency: before you could negotiate by asking how many festivals/markets a film was going to be entered into, among other things; now everyone is sure their project is going to go viral. And it's true that a production credit on a decent project can pay for itself many times over. But many do not, and in the meantime you can't eat exposure. This is essentially the same issue that we see periodically on HN with the 'just launch' mentality, which for some people results in running out of runway before any revenue shows up because there isn't an obvious revenue model for their product/service.

We're bullies. It's ironic, since so many of us got picked on in school, but the prevailing attitude among technologists is "if you can do it with a computer, it's pointless to reason about whether you should do it".

I somewhat agree, but am not sure if it's a technological issue exactly. I think the key is your observation that the tech industry is 'more heartless and efficient.' Efficiency vs. enthusiasm is a challenge in many industries, but in the technological field it's compounded by the fact that the deployment cycle is so short, and there's an objective test of whether your code works or not - if it doesn't, chances are the computer will tell you immediately. However, the attitude involved can be seen in many other fields, and what I think they have in common (to a greater or lesser degree) is that objectivity. I mean, if you make food and want to open a restaurant, I might love or hate your cuisine - but what that means will have very different implications depending on whether I'm a restaurant critic or a health inspector. People on HN frequently worry about being bullied by government bureaucrats for various reasons (some more credible than others); likewise members of the professions - doctors, lawyers, economists - have a reputation for aggressive dogmatism. I know I have to be careful not to let assertiveness slide into arrogance when I express an educated opinion - both because I might be wrong and because alienating an audience is bad; disagreements often look like zero-sum games from the inside but they take place in a much more complex social context where defection as a strategy can have indirect but long-lasting effects. This is often summarized in the film biz by the maxim 'be nice to people you meet on the way up, because you're going to meet them again on the way down,' and it's true for any kind of roller-coaster industry which these days seems to include most of the economy.

I'm not sure what to do about this. I mentioned Kickstart and the Jobs bill, and I think Flattr has great potential as well. The big obstacle to a micropayment system is that a tiny transaction has the same collateral risks as a large one (credit card abuse, fraud, spam etc.), and with direct micropayments the risk of that is perceived as higher even if not actually so. Maybe the collectivation + revenue-sharing model is the best one, insofar as companies like Apple, Google and Facebook have the infrastructure required to profitably exploit economies of scale as well as the platform required to support the large audiences required. I'd also like to think as a user that my upvote could benefit a content creator directly as well as indirectly. Unfortunately, all the offerings at present involve a walled garden (Apple's selective access to the iTunes store, say) or a severe lack of transparency (how much are views on Facebook or Youtube actually worth?). I can think of some ways around this involving metadata tagging and the semantic web, but the SW's killer app has yet to manifest itself.