It also assumes that every person who downloads a movie or song would pay a retail price for the same content if the 'piracy' option was not available. This is a fallacy. This issue comes up again and again in piracy trials. In the US, the courts seem to be heavily favoring the recording industry in assessing damages based on some theoretical financial impact of lost income. In Europe, I have read of some decisions in which the court took the much more reasonable view that file-sharing is more closely akin to a taking a book out from a lending library.
I tend to think of it like this: If a friend owns a movie and offers to bring it over to watch at my place, I might agree. If I was faced with the decision of buying that movie myself, I would pass. If that movie is a porno... well, we might become even better friends... or worse.
