It turns out that consumers value the convenience, legitimacy, and positive experience of purchasing legal content, even if they have the physical capacity to engage in piracy. Recording movies off the TV and editing out the commercials turned out to be too big of a headache for most Americans to bother with.
In fact, the best explanation of why legal downloading can work was given by Steve Jobs in an interview in 2003:
Well, let me give you an observation that's really interesting. If you go to Kazaa and you try to find a song, you don't find a single song. You find 50 versions of that song, and you have to pick which one to try to download, and usually it's not a very good connection. You have to try another one, and by the time you finally get a clean version of the song you want, it takes about 15 minutes. If you do the math, that means that you're spending an hour to download four songs that you could buy for under $4 from Apple, which means you're working for under minimum wage.The trouble is, by the time you factor in all the time spend on registering decryption keys and otherwise fighting with DRM systems to use the music you've paid for the way you want to, you would have saved time as well as money by finding illegal downloads. Unlike the guy selling DVDs at a car boot sale, the music pirates are offering a superior product.