Still seems like a false dichotomy to me. Subscribe to Netflix and pirate your content if you have a firm believe in being DRM free while rewarding the creators of content you consume.
Last I checked, the most effective way to pirate content is via a protocol such as Bit Torrent which requires you to also distribute pirated content. And that has legal ramifications, which then requires non-trivial methods to obscure your activities (paid proxy servers, etc). Most of us use Netflix not for ideological reasons, but for the pure convenience of it. Compared to Bit-Torrent,with Netflix you can easily browse titles, watch a bit, switch to another one, or watch whole seasons without waiting for multi-hour or multi-day downloads.
If you are not adverse to piracy, or you believe you have a valid fair use right to access the content, but you don't want to be guilty of distribution (a much higher penalty) then Usenet is probably the best bet.
They seem to be making it tricky to rip DVDs/Blu Rays these days (dirty tricks to screw with Handbrake/VLC) so the only way to get a movie onto my media server is to dl from somewhere after I bought the disc. Ironic, no?
Encryption just makes it difficult for your ISP to automatically throttle your torrents. Anyone can still download the torrent themselves and see that you're an uploader.
They would have to get all their pieces from you, breaking protocol. They'd also have to be doing this on a large scale. They'd also either be breaking whatever laws you might be breaking, or they are providing you an implicit license.
> They would have to get all their pieces from you
Unless you are sharing some packed and/or encrypted media, it's probably streamable and even sharing a part of it is enough to break the copyright laws.