I accept your points, as plausible and logical. I disagree with the cost of production and estimation of losses.
The cost of production of Prison Break is just taken from Wikipedia. It is not infallible, but that's the numbers I've seen. Prison Break was especially covered in the news for being the most popular TV Series that "no-one" saw on TV.
Remember "Clerks" by Kevin Smith. Production $28,000 dollars, and made some actors famous from being neighborhood kids on the block. It is the costs of production that many have the argument with. What really scares the Big Guys is the indie movement. They fear it and are trying to prevent it.
I have nothing against the indie movement. I was just quoting real costs of a real production, and even with a 3 million dollar budget per episode the series could EASILY have prospered on less than 50 cents per episode with a proper payment system.
What gets people going, is not that artists make profits, but how much they want and for as long as they want it.
I don't care, so long as a) I get a good product, b) I pay what I consider a fair price for it. I have no problems paying up to 1 dollar per episode for a series I like. Hell, if it's a really good series that only a few people watch but I just happen to love, I wouldn't mind paying 10 dollars per episode. The point is that with micropayment all movies and series are going to cost typically 1 dollar per view or less.
I have traveled the world. In almost any country you can buy DVD's on the corner for $5-$10 that have about 20 movies on it. It is part of local economies in some places. You can't put Schrodinger's Cat back into the Box. ( <-- Talk about paradoxes)
With a proper payment system it would be zero problem to actually segment a market based on location. In the Philippines it makes sense that a legal copy of a series costs somewhere around 5 cents. With such prices there could easily be 15 million viewers for a series. Given that a series today makes ZERO from such a series in Philippines, 15 million * 5 cents = 750,000 dollars per episode extra is not shabby.
The FBI just arrested a guy, glass worker, in New York for uploading a Pirated Movie (Wolverine pre release) he bought from a Korean in New York for $5. They arrested the John but forgot about the Korean that sold it to him. Yea, he did a wrong. But why didn't they go after the Korean. I can surmise, this is now big business for people that can "fight" back. People you don't turn in. People lawyers won't sue. At least Lawyers that like living.
Obviously it was the seller, not the buyer that should have been targeted here.
So even if you successfully turn the internet into a "clean" model. People will just buy it at its real price point from the guy on the corner. Will people stop making movies? No, of course not. They will just reduce the cost to make the movies or lower prices.
I think you're wrong. In Norway kids buy mobile ring tones upwards of 3 dollars or more per jingle. I don't understand it but they pay it without hesitation due to convenience. The moment it is MORE convenient to pay legally than to become a criminal the piracy rate drops to pretty much zero.