You guys make some good points but here's the thing - and I've been bitching about it for years and still nobody is listening.
1) The biggest 'pirates' out there are the VOD sites. Their distribution agreements authorize them to take any content they see fit and use it for marketing purposes. As long as there is no direct payment, they don't owe the content producers royalties.
2) Content producers are lazy. When I started out in VOD in 1999 I tried to sell the software directly to the producers and not one of them wanted to run their own VOD. The same pretty much holds true today. Almost every content producer out there is inking (bad) deals with the very companies that are infringing their copyrights. Until producion companies cut out the third party VOD providers they will never stop piracy.
3) Flat rate websites need to be run like a cable channel. The problem is, consumers won't pay for it because they don't have to - the porn is already free.
Until the industry decides to change the business model, it will keep being a blood bath. Until then, I'll just sit here with the software in the can waiting to see who's left standing.
PS: I like Holly's morals. I won't download shit for free either.