Just to supplement another response to this point... commercial entertainment does compete directly with free/amateur/semipro/fansourced material all the time.
I would argue that this is more of a danger to Big Content's bottom line. There are only 24 hours in a day. Youtube and reddit compete directly with Universal, Sony, and the New York Times for people's attention.
The fact is that entertaining videos and music are not only easier to distribute than ever, but also easier to produce. You don't need a degree or the backing of a large corporation to be funny, insightful or clever. IMO there is a lot of noise about piracy which masks this even larger "problem" for traditional media.
Thank you for your excellent expansion of my point. I wager that they either haven't identified the boulder rushing down at them...
...or are trying to win the piracy/IP battle enough that it gives them a credible position from which to attack the populist works that remix what they perceive to be their IP.
Especially if, for example, they've succeeded in making faceless/nameless/processless takedowns possible--a pretty solid weapon against populist entertainment.
We recently gave up casual TV and movies cold-turkey. Frankly, the studios and networks just couldn't figure out how to target us properly. I'm not going to pay $120 / mo. to get my favorite channels (eg. Science and NatGeo) just because ESPN has Comcast by the balls. Similar arguments for movies.
FWIW, I don't use TPB either. But I can imagine the appeal of choice, freedom, and having archival copies of the bits locally.
The masses however seem to prefer commercial films, music and software.