To me the problem is that they cannot control distribution. So one solution could be baking adverts into the tv/movie. Has the obvious flaw of poisoning art with advertising, but if done well might work?
What does everyone else see as the pragmatic solution?
My ideal pragmatic solution would be a platform (or two, or five) that acts like a dumb pipe for content providers to license their content to, and receive some form of compensation every time it is watched, prorated into the amount of the episode/movie is actually watched.
However, given the difficult licensing issues found for every country, that's probably not going to happen any time soon.
That's why cable companies bundle channels together instead of letting you pick and choose the ones you want.
If it wasn't for this, the industry would become even more risk-averse, and we would see a lot less diversity of content, or risky unproven ventures.
In the end I believe this would be a net loss to everyone.
Obviously, the cable/satellite/telco video companies of the world don't want to get disintermediated here; so most of them have been building IP video platforms for the last few years. It will still likely require a cable video subscription (though maybe with a slight discount as you won't need to rent a cable box.)
Basically, make a product that can actually compete with the solutions that piracy offers, from a technical and experience perspective, then price it at what people are prepared to pay.
Or you will die.
I'd be happy to trade in subscriptions to Usenet et all if there was something even several times the price of it if I knew my money was going to the authors (and even the middlemen that get it to happen, providing they are actually providing something good as opposed to being greedy and backwards).
The old business model doesn't work.