Gates: how piracy worked for me in China - The Microsoft chairman says that bootlegged software is creating a demand for his legitimate products in the longer term
In a lot of IP product categories, there are different classes of users who pirate. In the case of movies, a friend of mine who's a senior exec in a major Hollywood studio once told me they had data suggesting that of the three categories of audience: A) Never pay, only pirate, B) Only pay, never pirate, and C) Sometimes pay, sometimes pirate, the third category was probably larger than the first.
That would mean degrading your brand value among consumers of piracy, could negatively impact long-term sales.