No, sorry you seem to be missing the point.

Ms. Paley is an artist who simply wants to get her work seen by as many people as possible, as most artists do. If it were possible to do that and make a pile of cash in the process, then that’s fine. However, it’s unlikely that she would make money unless an incredible amount of money is spent marketing the movie.

“100,000 copies, assuming that the 50k is spread over them all and the licensing is another even $5 a copy, example, then you are looking at $5.50 per copy in licensing”

That’s $5.50 per copy to the licence holders. According to Wikipedia, the budget for making the movie was $290,000, so she’d be paying nearly double in licences than the thing cost to make in the first place.

“The suggestion here is that at ANY volume, the licensing fees would make it impossible.”

Not ANY volume, but the numbers would have to be ridiculous for this kind of project. Think about it, in the opinion of most people (and the original scope of copyright before it got amended so Disney could keep on to Mickey Mouse) the music she used should have been in the public domain. In other words, she’s having an extra $5.50 of her NET profits being taken away from her with each sale in the above scenario.

You don’t see how $5.50 being taken from profits in a market where the product is usually sold for less than $20 would make things extremely difficult? Maybe even impossible? That’s not even taking into the account that the way this thing sounds, the fees would go UP the more she sold…

“The true case is that there isn’t enough true public demand (with cash in hand) to make it worth doing.”

Ah, so it’s not YOUR kind of movie, and it’s not mainstream so it can’t do well?

There’s a resurgence in adult (i.e. non-Disney-style) animation in recent years. This year’s Best Foreign Language Picture Oscar went to Waltz With Bashir, an animated documentary. The 2007 Cannes Jury Prize went to Persepolis, which went on to make nearly $20 million theatrically worldwide.

This means there’s a growing market for unusual, emotionally affecting, non-Western styled animation. This movie fits into that category. You’re not going to see Sita Sings The Blues outselling Wall-E at any point in the future, but does that mean nobody would see it? Hardly.

“Would you consider it any better if someone took this movie, changed the music for their own, and then sold it for $10 a copy without paying Nina Paley anything?”

If Nina Paley had been dead for 20 years, like Annette Hanshaw (whose music she used), I’d say it would be a great experiment and tribute, like those goth bands who keep rescoring the original Nosferatu. It’s not acceptable while she’s still trying to recoup the costs of making the original.

It’s not really too hard to understand. The original purpose of copyright is to give a limited monopoly to an artist so that they can create more works and thus benefit society as a whole. In this case, a corporation who had nothing to do with creating any of the original art is profiting from the use of music that should already have been in the public domain for many years. In doing so, they’re financially crippling a currently working artist and probably putting her off attempting any further works of art (or removing her financial ability to do so). The exact opposite of what copyright is intended for.