According to a submission made to the New Zealand government by the major studios, the mere threat of sending out an infringement warning halved movie piracy in less than a month. After years of battling for "3 strikes" the studios haven't sent out a single warning, but nevertheless insist that to reduce piracy further they'll have to send out thousands. The recording labels want to do the same at a greatly reduced cost, but the ISPs want to charge four times more than they do now.

The Copyright (Infringing File Sharing) Amendment Act 2011 was finally implemented in 2011 after years of complex lobbying, but the idea behind it is simple. Internet users spotted uploading copyright material are first sent two warnings via their ISP. On receipt of a third, copyright holders can take the Internet account holder to the Copyright Tribunal where they face hefty fines.

New Zealand’s Economic Development Ministry is currently reviewing the fees the recording industry and movie studios pay ISPs to send out infringement notices. Submissions sent in by the entertainment industry as part of that process and later obtained by Fairfox under the Official Information Act have turned up some interesting claims, not least that the movie industry has sent out a grand total of zero warnings.

But despite ignoring the system they lobbied to have introduced, the Hollywood-backed Federation Against Copyright Theft told the government that the illegal viewing of the top 200 movies by New Zealanders dropped from 110,000 instances in August to just 50,000 in September 2011, a better than 50% reduction.

However, NZFACT complain that progress has since ground to a halt. So in order to reduce piracy further they’re going to have to do what they have failed to do so far – actually send out some warnings. What is stopping them doing so, they say, is the high cost. Currently the price they have to pay ISPs is $25 NZD (roughly $20 USD) per notice, but the studios want this cut back “to pennies” each.

And the studios aren’t the only ones complaining about the costs either. RIANZ, the Recording Industry Association of New Zealand, said that in order to do something about the 41% of locals who access copyright infringing services, they would like to send out 5,000 notices per month, up from the total of 2,766 they sent between October 2011 and April 2012. But to make that cost effective the price would have to be cut from $25 NZD to just $2 NZD per notice.

But the indications are that in their submissions the ISPs are pulling in the opposite direction. Telecom said that the fee per infringement notice should increase four times over to $104 NZD each. The ISP said that it had spent more than half a million dollars putting the three strikes mechanism in place but had sent out just 1,238 notices since it began.

In addition to the movie studios effectively boycotting use of the entire system, it seems that the recording labels have no appetite to go through with the punishments they demanded for the most persistent offenders. Three ISPs report having customers on their “third strike” and due to go to the Copyright Tribunal to be fined up to $15,000 NZD. But the labels let all of their cases lapse meaning that they now have a completely fresh start.

InternetNZ chief executive Vikram Kumar told Stuff he was glad that no one had been fined, and that the answer to the piracy problem lies elsewhere.

“Make material available in time, in the way people want it, and most of the problem will disappear,” he said.