Simple, they do it illegally. They obviously have not been warned, or don't care, or have the money to pay the fines, I don't know.
I am sure if the proper authorities were notified, they would get a letter from a lawyer failry quickly. I am not one to rat however. I would sure like to know why and how we were singled out.
I know of several sites that have been warned in the past. This is the same reason we had to stop using player photos on our wallpapers. Tons of sites still do it, but quite frankly I am not well off enough to risk the fines.
Then there is also an issue of bandwidth, and video uses ALOT.