So you're saying that DVD rentals, DVD (CD, BD) sales, TV broadcasts, merchandise, advertising, cinema, live shows, publicity concerts and shows (eg Oscar broadcast rights), payTV, purchased downloads (iTunes) etc will all die? If they all die well then their system will collapse. They will have to adapt or die. No more Britney Spears? So what.
Wrong analogy. Imagine a Hollywood Movie script for a film dealing with the intricacies of the human condition after say the Iraqi conflict. The effect of the war on a couple in Iraq. No explosions, except for some off screen action, no violence except for some simulated effects thereof, just deep introspection, inter human conflict, frustration, mistrust, denial, hate etc. Now imagine this film features George Clooney - charges $50mil and Nicole Kidman $50 mil plus production costs $50mil. $150 mil. Now imagine that out of 300 mil Americans only 10 mil want to see this film and that the rest couldn't give a monkey's behind because it's not in 3D, does not Jessica Alba in it (Kidman is hot but getting old and in this film she stays dressed) and there is no real action to compensate for an action flick. Take home pay for $10 movie ticket is $100 mil. The movie makes a $50 mil loss. Now imagine that such a movie gets made -- heck NO, it won't get made. Why? Because it costs too much. It's cheaper to pay Clooney that money and have him blow up some busses, planes and make $300 mil profits.
Here is your explanation. Hollywood does not make movies which make losses. That's why most stuff out of Hollywood is garbage. It is garbage for kids to watch and pay - cheap entertainment. In the same vein, if only 10 mil ($100 mil revenue) people will buy a movie - make it for $5 mil or don't make it at all.
If they decide to stop making movies - well tough. They won't be losing money ne? They however won't ever do that, because people will still buy and most people still buy - and when they price it right - cheap - even more will buy. Plus you can't beat the cinema experience with a warez'ed MKV file and you can't beat a live concert with a 128kbps mp3. Adapt. Sell your stuff for less or go out of business, but don't restrict our freedoms.