Downloading movies - good or bad?

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Please note this is about movies only - things get a little more complicated when you start to talk about downloading media in general, so please see my other discussions for music and TV :) If you're in touch with technology, you'll have heard about it. It's rampant on university campuses, with several campuses even setting up dedicated intranet servers for movie sharing. [Of course, by 'campuses' I mean students, but as they are available to everyone on campus, they are essentially official filesharing servers] Movies cost a LOT to produce - often in the millions. Though mega blockbuster profits are certainly not lacking these days (breaking record after record) what about the smaller films? Are they suffering from movie downloads? And if they are, does it matter? Lemme know what you think :)