You appear to be simplifiying it down to only the 'expensive' aspect. And more than likely that's the primary motivator, but the other factors aren't nothing. Additionally, the customers are paying at least something for this service, so it's not free.
In this instance there happens to be an (illegitimate, but still) alternative that's easy enough for 22 million customers to have worked out how to set up, operate, and prefer.
Apple TV and other TV boxes have aggregated services for a long time now. You can search for content across providers from one interface.
Pirate streaming sites aren’t exactly known for their quality, consistency, reliability, and ease of use. I bet it was more frustrating to use the pirate service, especially for those dealing with subtitles and alternate audio.
This really does come down to expense.
The great ones, that gets a lot of word of mouth recommandations, are definitely better in my experience.
Nonetheless these services are highly successful and profitable. I think one problem is this weirdness of the 21st century where many companies, especially in media, are seen as antagonistic towards their own customers - this provides a major motivation for piracy.
For games, particularly from smaller studios, it's the exact opposite. They generally seem highly concerned with the interest and satisfaction of their players, and so you want to pay them. Many of these studios even sell things like soundtracks (already available in the install folder) as 'pay more' buttons, and plenty of people buy them.
Even though it could be cheaper buying direct, or free by pirating. Turns out the publishers were just either greedy or naive and didn't split the 30% savings to encourage people to move off Steam, and the Steam pricing is low enough that people preferred it.
The same cycle is happening with streaming services, they didn't learn that there is a cutting point where people just dont want to deal with your high priced, abusive shit. Netflix make almost $34 BILLION a year, and yet the most important thing for them is making it really hard for me to help my elderly parents from just using one of my many unused Netflix profiles.
"Nickle and Diming" drives a lot of these folks to figure out an alternative. Because the pirate services aren't going to turn around and restrict my ability to watch on location, or number of streams or decide that they don't like my TV manufacturer anymore and disable the app.