A) Hollywood has traditionally operated on the model of one box office hit paying for a stable of misses. Avatar not only pays for itself but ten other movies that don't make their money back. The number of productions used to be bigger and the amounts of money smaller, but over time, with corporate consolidation and more and more outside money financing Hollywood, the powers that be have put fewer eggs into fewer baskets. So you're dealing with profits and losses in the hundreds of millions and sometimes billions of dollars. Yes, that makes a dent even on the balance sheet of GE. The problem is that it has to be that big to make a dent, which means more of this way of things, which isn't terribly conducive to good movies, in my opinion.

B) Pretty much actually. It still amazes me that there are people who independently finance films with their own money. The odds are so terrible, the potential for return on investment so slim, from a financial perspective it's absolutely insane. I won't try and do a psychological census of every film investor out there, but for many it's the chance to walk the red carpet, hang out with a movie star, talk about your movie on the golf course, or whatever. But the potential payoff isn't negligible either. If a movie hits, it can payoff brilliantly. The general principle is the riskier the investment, the more it pays, if it pays. The less risky, the less it pays off. Film investment is risky enough that the odds are probably as good, if not worse, as playing the lottery. Which is positively stupid from a financial investment standpoint, but if the last four years of this economy have taught us anything, it's that even people very good at making money can be exceptionally stupid.

C) Eventually, most likely, all or most of any kind of hard disk media will disappear. But it will probably take longer than any of us think. Or, at least, economics and politics will keep it from being possible long after its technologically possible. Hopefully, online distribution will make it more feasible to make human amounts of money outside of the studio system. If you can make a movie for half a million and have a reasonable expectation to recoup that through iTunes, that may be the landscape of independent film in the coming years. You go to the theater to see Avatar 3, which is all spectacle and no story, and then you come home and rent Primer 3 on iTunes, which is the reverse. I could live with that.

But we're still a ways from finding an equilibrium. Right now the theaters are too expensive and online is too cheap. That's what Netflix's whole price raising/Qwickster debacle was about. They're in the midst of renegotiating the licenses for the content from all the studios and the studios are playing hardball. When Netflix negotiated the licenses the first time around, they got them for a song and a dance, because there was no money in online distribution, so the studios didn't care. But now there is and everybody knows it, so the studios are trying to hang onto that money and Netflix is caught between recalcitrant content owners and pissed off customers. Time will tell if they can thread the needle, but given how they handled everything with the price raising and Qwikster, my money would be on probably not.