There's only so much money
There's only so much available money in the economy. Where do they get this ludicrous figures from?
Do they think we have £800 million between us all sitting in our bank accounts which we're not spending on CDs because we pirate them?
Of course not, if you don't buy a CD or DVD you buy something else, you spend it on your house, your car, your kids, clothes, food, booze, electronics, games consoles etc..
Therefore if people don't download then some other market area gets hit.
The music industry has devalued music by giving it away in magazines, music is everywhere, in adverts, in the background of TV shows.
As for films, there's so many bad films and so many idiots in cinemas with their mobile phones and laser pointers it's no wonder people would rather see films at home.