Interesting post/podcast by John August: Is Screenwriting Dead?
It is indeed harder and harder for feature screenwriters to find work and make a living in traditional ways.
What I tell my students at USC (and what I tell myself when I face the uncertain future) is that screenwriters need to be entrepreneurs, and create their own projects and opportunities.
They also have to be willing to write for "anything with a screen." This means writing and pitching for TV, but it could also mean creating webisodes, interactive media or writing for video games, or transmedia. I've even encouraged screenwriters to write short stories, graphic novels, and even full length novels, when appropriate, instead of spec scripts, because the writer then owns the IP. There's a lot of hunger for content out there. Be proactive and connect with the people who are making it.
What's clear is the old model of taking out feature specs and pitching for feature writing assignments isn't enough to sustain even established writers. "There's just no business in it." I hear many say. So rather than be passive, we have to look at the changing media environment as opportunity.
You CAN eek together a living, you just have to be...well... CREATIVE.