There’s a big 2nd hand market for people sharing Plex servers with people for money on eBay and stuff. Idk if Plex goes out of their way to hunt those down but they are violating tos. I’ve seen pictures of servers with 200+ active users before. It was a bigger problem when Drive had uncapped storage because you could duplicate a blob with a click and link a new Plex instance to it and leverage Google’s servers for just about everything.
So I doubt it’s just families snitching. It’s probably copyright holders hunting down these and other streaming websites and figuring out where the stream is coming from and reporting to Heztner. That’s standard mo. They don’t send you a copyright notice they send your ISP a notice and vaguely threaten them. And then your ISP tells you. That’s always how it worked.
There’s a general sense of you should try to ethically pirate. Like no one cares if you shoplift from Walmart, but you’re a dick doing it to the local mom and pop grocery store who’s barely getting by.
On a more selfish level, paying for the things you enjoy shows whoever made it they’ll get money for it. Simple as that. If you really enjoy something stealing it isn’t going to convince them to make more. There’s been more than once where a game or show got pirated more than bought legally and it’s killed any future projects for it.