
Well now it takes a few hours to rip a movie from a DVD to your hard drive. I think you see where this is going. In 5 years the process I'm about to describe is going to kill hollywood the way it's already killing the RIAA. But unlike the RIAA, hollywood has a chance to fight back, at least for the foreseeable future. I'll get to that later
In order to make it super, extra easy to understand I'm breaking this down in to simple easy to understand (but not to ever ever follow) steps.
How a Pirate uses Netflix to Kill Hollywood
- They Download some DVD Ripping software
Shiver me timbers, This may be illegal in your country! Then again, since when has that stopped a back stabbin' pirate like you?
For Windows there's Magic DVD Ripper, it's not free but hey you can always pirate that too ;) there's plenty of torrents.
For Macintosh, I know you would probably rather buy the movies from iTunes anyway, but just in case you're feeling a bit scurvy, or yeller-bellied, there's MacTheRipper to be had.
For Linux, DVD::Rip is good and has lots of options to tweak. For a simpler approach, try AcidRip. - They Rip all the DVD's they own
Ye begins yer journey with soft, ambiguous piracy. Yes you're making a copy (on the computer), but it's for archival purposes, right? This is probably still legal.
But now that you've got digital copies of all your DVD's, your pirate's hunger intensifies! - Avast! Ye must go on account with Netflix
For $16.99/month ye, the evil video-pirate, may acquire 3 DVD's at any given time. Which is convenient, because it takes about 3 days to get the next DVD from the time you mail one back. That means you can rip a new DVD every day and never miss a day. 30 Titles a month ain't bad (it's only about 50 cents per DVD). - They share the bounty with their mates, in secret
When ye use encryption the pirates code is safe (usually). It's not bullet proof but it really is an invasion of privacy if your ISP starts trying to hack the encryption on your internet traffic. Comcast is already being punished for similar offenses.
Ye setup a filesharing server! Filezilla has a windows ssh server, which is easier to use. Otherwise there's the original OpenSSH server which runs on EVERYTHING.
For yer mates, Filezilla offers ssh (a secure protocol) clients run on any platform. Then WinSCP for Windows, Fugu for Mac, and if they're a linux user, they'll have no problems.
While it takes hours to rip a DVD right now, you can rip the data to your hard drive in about 10 min and do the encoding overnight. In the next 5 years though, we're going to see this time cut down just like we did with music. Especially with the parallelize-able nature of video encoding.
Each time you double the number of processor cores, you effectively half the time it takes to encode video.

(source: codinghorror.com)
The only way the MPAA can fight back is by increasing the resolution of the video. Each time they double the height resolution of the video - which is approx the difference between dvd (480p) and blue ray (1080p) - you need 4 times as long to process it.
I think that when the time it takes to rip a movie is 10 minutes or less, is when people will start ripping and swapping video the way they do with music. The MPAA can only hold off the pirates a little longer... I'd say 5 years, 7 at most, and only if blueray catches on as a movie format.