However, not everyone who pirates something was ever going to buy it in the first place. A huge portion of the world lives in sufficiently deep poverty that the option was either: have the thing for free or not have it at all. These folks don't represent lost sales.
Luckily though, "price" is not the same thing as "cost". If they watch for free, it doesn't cost us anything.
Just out of curiosity, how certain are you that "piracy is a minority activity"?