They can just up the price of CDs and movies to recover their costs. Then the people who buy their shit legit can foot the bill while the majority continues to torrent their shit.
True, but for every case the had to pay all those fees over, they sent cease and desist orders and got people to stop. People stop because they read the headlines of all the cases they won. Its a losing battle, but if they can keep it to a minimum, they feel like its worth it.
What I think they fail to understand is that if you couldn't get music illegally, people just would have less. They wouldn't cough up the money and buy everything in their collections. Every pirated CD does not equal a lost sale.