It’s convenient, it’s not that expensive, and the selection is just good enough.
Yes. Yes. And Yes.
Just as the best way to slow music piracy was to make it easier and more convent to not pirare (think iTunes and now services such as Spotify). When piracy is the easier option (think Napster before iTunes), people will do that. Make being a legal customer the easy and fun option, and people will pay.
Here are some reasons that Netflix stopped this pirate:
At the time, pilfering movies was a whole lot easier than watching them legally. Netflix’s streaming catalog had a tiny number of titles, most of them not to my liking. Apple’s iTunes rental plan had more titles, but too many restrictions (paying $4 for just 24 hours of access to a movie was a bad deal). I outlined what I called the perfect online streaming service—I wanted a plan that had a library as extensive as Netflix’s DVD plan, but which allowed for unlimited viewing—and I promised to pay as much as $40 a month for it. Netflix’s instant watching service isn’t anything close to that, of course. But in the last year it has improved its selection and accessibility (you can now get it on pretty much any device you own) just enough to hit a tipping point. I’m happy to pay $8 a month for not-terrible selection and amazing convenience. And nowadays, I almost never turn to BitTorrent.