I have seen and heard all of the tired old arguments on both sides of this particular fence.
I personally download music and films, watch and listen, if they are shit, they get deleted. If they are good, I will make the effort to go and buy the retail version (usually the directors cut of films, if available, and usually that little bit more than the basic edition).
The reason I do this is I have become utterly devoid of any faith in the music industry as a whole, and so sick of the manufactured shit that they constantly promote, everywhere they can, until you are almost brainwashed into buying it, then they drop them in favour of the next canned crap and repeat the whole process, that I could not give a monkey fart for any sense of legality, fairness, or any other wank you care to toss in my face (oo-er missus! that actually wasn't a deliberate turn of phrase, it just sort of came out like that, but I like it so it stays).
I will continue to download copyrighted content, testing the quality, until such a time as I am physically no longer able. I use encrypted torrents, through a vpn, so although slower than otherwise, I am actually still able to play CS;S while torrenting.
I spend in the region of £50 to £100 a month on music and film (although this does include at least one cinema trip a month), sometimes more, and I am by no means unique. I know at least one person with an income I can only dream of, who spend upwards of £500 a month on entertainment (of the audio-visual kind, but he goes to film premieres and the like).
Just to give you one example, I read about a Russian film, Night watch, a while ago. It sounded vaguely interesting and so I downloaded it. This film was amazing. I have since bought that and the sequel Day Watch on DVD (directors cuts), and have just placed an order for the first 3 books - which have been translated into English - in paperback, and a pre-order for the fourth book. I have also got an order in for all four books in hardback, as they look much better on the shelf. Several people I know have now bought the films and/or books based on my recommendation, and in one case, borrowing my films. So, in torrenting a film I might never otherwise have seen, I have ended up spending around £50 so far, and another £30 odd, perhaps £40, for the hardbacks, at a later date, and of those I know who also bought stuff, probably another £100 at least from them. You may think I waste my money buying new when I could get second hand copies for 0.01 + postage on Amazon, but I want them brand, spanking new, shiny and in mint condition.
I also downloaded (at the same time) a film with some american wrestler in (Steve Austin I think), and Vinnie Jones (normally a fantastic villain). Turned out to be a huge pile of shite. A frined of mine had bought it, and after watching it I encouraged him to return it, which he did (claimed it didn't work in his machine, part-exchanged it for full face value towards a copy of Night and Day watch). I realise this creates a problem for the retailer, but when they restrict their sales stock to such wank as this steve austin shite, well, that's their problem. This is what Capitalism is about, no? [/sarcasm]
So, all you muppets banging on about freetards and how they are ruining blah blah blah... go elsewhere to preach. I am not interested. I am far too busy enjoying the good music, and superb films I have just added to my burgeoning collection.