Market economics, flawed DRM and DVD prices are all factors that influence digital piracy levels. I have formed a theory that digital piracy forces DVD prices down, or if you like, raising DVD prices increases digital piracy. In this way the pirates are keeping the DVD publishing companies honest.
I listened to a recent IT Conversations podcast, with Cory Doctorow from the EFF, in it he made the point that DRM stifles innovation by preventing entrepeneurs creating products that manipulate digital media in ways never imagined. He also claimed that the current DRM mechanisms are flawed and all will eventually be compromised.
So if DVD publishers don't use DRM then what will prevent one person from going out and buying a DVD and then giving copies to all they're friends? The simple answer is price and convienience, make the price affordable and the product accessible and you reduce the temptation of piracy because it takes time to copy DVD's and most people won't bother once DVD prices are easily affordable.
Removing DRM opens up a world of possibilities, legal DIVX downloads so that people can watch movies on demand. DVD jukebox products for people to store all their films on to watch in any room at home. The list is endless and every new product would likely encourage more people to watch more, is this not something the film studios are interested in?
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Disclaimer The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.