What are they loosing? There doesn't seem to be much evidence of them setting anything free at the moment.
I think there are valid questions about what happens when the bulk of consumers are people who aren't used to paying for media but in many cases there are alternatives.
There have been a great many times in history where, for instance, movies were going to be killed - the introduction of the TV, the introduction of the video recorder and so on - but they're still going strong. Cinemas got nicer, screens and sound better, the whole thing became more of an experience than watching the movie at home and people kept going to the cinema as a result.
Similarly the music industry has changed it's revenue model to focus on live performances and merchandising rather than album sales. Even if album sales fall significantly they're relatively well placed to cope.
There are valid concerns (I'm not sure what an author does if people stop paying for books for instance) but if the free markets most of these corporations regard so highly mean anything then surely if there is a demand for something (say books) which someone else wants to make (say an author) then the market will, if it's possible, make it happen.
And if it doesn't then maybe we just don't want it that much after all.
The music and movie industries have tried their best to make it as hard as possible to consume legally bought media on anything other than what they want you to watch it on. Some of this is due to piracy concerns, some due to various contracts (you will only allow this movie on Starz for the first 6 months), but all of it is in their control.
Conversely, downloading a movie via bittorent will play on anything powerful enough to process an HD movie; downloading some MP3s will play on any device thinkable. The files require no complex codes to put into crazy websites, no additional software to install, no additional devices to buy. Being free is just icing on the cake.
Case in point: I bought Pacific Rim on blue ray when it was released a few months ago. Waited for it to arrive in the mail. Defeated its stupid plastic wrap. Popped some popcorn, turned the lights off, put the disc in my PS3 (the only blue ray player I own) and... nothing. It could not play the disc without connecting to the internet to download some new blue ray decryption keys or whatever. Never had this problem before, and sadly my PS3 is not connected to the internet. This disc was useless to me. Enraged, I downloaded an 18GB HD rip of it and had it playing on my $35 raspberry pi in an hour. Has this experience soured me on buying blue rays? Of course it has.
To me it sounds like a PS3 specific thing, rather than a problem with Bluray. I get that to you the experience is poor regardless but the problem to me sounds like Sony rather than Bluray.
I don't know how this is handled on older, unconnected players.