The problem with that line of thinking is that while movie sales are languishing, theater attendance is still fairly robust.
I don't think that is a fair comparison. Theaters sell an "experience" that the average person can not get at home. The big screen, the extremely high end audio, the social atmosphere, etc.. are all added value on top of just the movie. I have went to see movies I knew I wouldn't like for various reasons and I bet almost everyone here can say the same. OTOH, I have never purchased a movie I knew beforehand I would not like.
IMO, the industries have brought this upon themselves. That isn't an excuse but it is a reason and it is almost amusing watching them try to go backwards instead of embracing what people want and making a fortune doing it. Keep in mind, this is the very same industry that was against video tapes because people would be able to record TV and would cost them a fortune in lost revenue. What happened instead? Instead of losing revenue they made untold sums of money off of it.
Consumers simply do not want to purchase a CD for $15 that has 2 songs they want to hear and 13 songs they dislike. They also don't want to be told that after they purchase that CD that they can't rip the 2 songs they like off of it and make their own CD of just songs they like. Consumers are tired of paying for the same content multiple times. They purchased the VHS tapes, then they purchased the DVDs, then they where told they could not make backups of their legally purchased movies in case the rather fragile DVD was damaged and when the courts finally told them they could the industry made sure you still couldn't do it legally. For the longest time it was a serious hassle to backup copies of the Disney DVDs I bought for my kids (almost foregone conclusion they will get damaged). It would have been much easier to simply pirate the movie with a few clicks of a mouse. The industry wants to force you to buy the same content multiple times and has fought technology that we all love to try and achieve that goal.
What was the industries response? Did they provide the customer with the product and delivery method they wanted? No, they did something much worse, they punished the people that were legally purchasing their products while having absolutely no effect on the bad guys. A guy at work pirated a game that he OWNED because the DRM degraded the "quality" of the product. He wasn't warned beforehand that the DRM would degrade the gameplay and he couldn't return the game after he found out. I know another guy who hadn't purchased a song since napster until Amazons DRM free music store opened up. He hasn't pirated a song since, not that I agree with what he did but the industry had a golden opportunity to cut off piracy in its infancy by making it easier to purchase the music than pirate it. Instead they did just the opposite, they made it harder to purchase and enjoy content. At one point they made a case that we couldn't put songs we had purchased onto MP3 players, they argued against TIVO, they argued against VHS, they wanted a tax on all blank media, etc...
They are still engaging in the exact same tactics. People want, and are willing to pay for, truly on demand media over the internet. Unfortunately the same people that profit from your expensive cable bill also provide your internet service so they will (and are) fighting change again. Change that I would argue will ultimately lead to more profits for the industry.
While none of that gives anyone the right to steal, IMO the damage done to the industry has been mostly self inflicted. It has definately had an impact on my spending, while I am not as stead fast as I would like to be (I still buy the kids their movies), I refuse to purchase anything for myself that has overly abusive DRM and so do a lot of other people I know. Granted, most of us don't pirate it but it does bring up an argument that the industry has lost significant revenue from THEIR actions as well as the actions of thieves. History has shown that trying to take more of the paying customers "rights" (for lack of a better word) away only leads to a further decline in revenue as it pisses more people off AND it does absolutely nothing to even slow the pirates down. Something is terribly wrong with your business model when the people that steal your product enjoy it more than the people that paid for it.
I guess the point to all of my rambling is, IMO, the industry has caused more harm to the people who actually make the content (actual authors, artists, performers, etc..) than the pirates have.