I am somewhat of an anomaly among my friends. I do not download music, tv, or movies illegally, and I do not take content from friends. I do not have Cable TV. So I wait till Game of Thrones is out on Blu-ray. I buy season passes on iTunes or Amazon. I watch Netflix and Amazon Prime. I will sometimes go to a Providers web site to watch shows, which means I still see commercials in some cases.
Having said that, I can completely understand why a vast majority of people download content illegally. The industry wants you to spend your money on Cable TV. They want you to pay for 200 channels you don't watch. They want to send you to the Theater to watch a movie. They do not want to provide a-la-cart programming. They want you watching commercials. They will do everything they can to maintain control and lack of choice. Even though most people can easily get the content they want with little hassle.
So whats the net result of this. I'm watching less TV than ever and I don't miss most of it and I spend less on TV and Movies. I am more choosey when determining what I will watch.
The content providers should be afraid of the changing landscape. But, they may want to think less about cord-cutters that pirate media, and more about the people that learn that they don't really need most of what they used to watch.