I regularly see a movie I would be interested in seeing in the theaters and it to my netflix que. Just a few months later it appears at my door (or removed from my que when reviews turn out it was bad). At least for me they overestimate the value of seeing most everything 'right now'. While I could go see the hot new movie, I just got in the mail the movie that came out 3-6 months ago to keep me busy this evening.

As for piracy, just like iTunes between always having a plenty of items from my que for streaming and getting a new disk every few days it is easier for me to use netflix than pirate. That is when I knew they had a model that was going to be very successful.