While reading Reihan Salam's review of Tyler Cowen's new e-book on the stagnation of the American economy, I came across a link to Kevin Kelly's "1,000 True Fans" essay (or is that a blog post?). Kelly's main point is that a self-employed artist or creator can make a living if he gains and retains about 1,000 true fans who spend an average of $100 per year on the artist's product. Kelly claims that this is a reasonable goal, even in the present economy of the "long tail"--i.e., an economy in which the consumer faces an endless selection of goods (think of the amount of book titles available through Amazon, for example), and in which it is very easy for a creator's work to end up on the long, thin tail of sales, but increasingly difficult for a creator to produce a blockbuster which lies on the short, stubby torso (um, so to speak).
Anecdotally, I've seen this approach work in the role-playing game community, which has a small market, and in which independently produced games are a niche within a niche. It seems like it could work in other areas as well, such as music or visual art.