Yea, but my point is different than a cracked version leaking into bittorrent. That doesn't have a drastically large footprint.
If they streamed videos with no-DRM, everyone with a subscription would easily grab a copy of whatever they want. And all it would take is copying a file and sharing it with friends/family to have it spread. This might not seem like a huge difference, but honestly I think it would be. It would lower the barriers of sharing to the point that everyone could do it. Only those who hold onto a moral belief in not committing copyright infringement wouldn't participate. I think the past has shown that these people are in the vast minority.
YouTube DL works from the command-line. YouTube videos are not DRM-encumbered. They are just harder to get because they can no longer be requested by a simple HTTP call.
I don't believe that someone would cancel Netflix because they happened to have ripped all of the things they are interested in. The value of Netflix is accessing an enormous library, vastly bigger than you could store (changing all the time!) and watching an item that you feel like watching at this time. A Netflix subscriber can't exactly predict every single item they'll be interested in until the end of time, rip them, then cancel.
Even if there were a few people that did this, they would make up an incredibly tiny proportion of paying users, and they'd likely be akin to the digital hoarders that have TB of movies downloaded.
It takes ~2 hours to play the film, you can't make any noise in the room during that time, and the resulting picture and sound quality will be terrible unless you've got very expensive recording equipment. Content producers would love to get to the point where that's the only way to 'copy' films.
You're right about the time it takes to copy. Whenever I've encoded video it's always been a time-consuming process so I wouldn't see this as a major obstacle.
As for picture and sound quality being terrible, simply not true. Recording from a projected image is one way to do telecine, and it works fine if you can set it up properly. [1] A half-decent telecine is very different from surreptitiously recording a film in a cinema.
The stream will be re-compressed but this isn't such an issue as many people think. Back when TV was recorded on analog tape in the 90s, you were allowed 8 generations of copying and it would still be considered acceptable for broadcast (for news).
http://thepiratebay.se/search/house%20of%20cards/0/99/0
I don't see Netflix going out of business because of this.