The Oscar-winning head of the body which distributes films in the UK today called for new methods to be employed in the battle to defeat internet piracy.

During a keynote speech as president of the Film Distributors' Association, Lord Puttnam said young people needed to be educated at an early age that it was wrong to illegally download copyrighted material.

"The concept of intellectual property and its value needs to be embedded inextricably into the school curriculum," he said. "We need to establish beyond doubt that if people want films on offer in a variety of ways and formats, as we hope and believe they do, then they are required to pay a fair price."

Puttnam, who won an Oscar for best film in 1982 as a producer on Chariots of Fire, highlighted a recent FDA project aimed at the vital "tween" generation of 8 to 11-year-olds, a teaching resource designed to stimulate classroom debate about why copyright existed.

"Today, it's encouraging to report that this resource has been supplied, free upon request, to almost one in five primary schools in the UK – that's 4,000 out of a little over 20,000 schools," he said.

Speaking afterwards to the Guardian, Puttnam said the film industry itself also needed to adopt new ideas, if internet downloading was to be defeated. In particular, it should follow the example of the music industry and make limited content such as film clips free to viewers, he said.

During his speech, Puttnam challenged TV producers to come up with a successful show to capture the imagination of the British moviegoing public, which he said had powered the UK and Ireland box office to an all-time high of £1.06bn last year, up 11% year-on-year despite a 4.8% shrinking of the European economy over the same period. He said broadcasters should not be put off by "the well-rehearsed arguments regarding clip clearances", when there was a genuine opportunity to capitalise on the UK's current love affair with movies.

"Where on earth are the edgy magazine shows or the contemporary panel shows or the audience participation shows themed to the movies?" Puttnam asked. "The mass public interest in films – enjoyed by millions of people every week – is all but ignored in the current output of our national broadcasters. Here's a gap crying out to be filled with a smart, modern format."

"When TV producers are having to negotiate a fee for the clips they want to show – that's barmy," Puttnam said, after his speech. "Either accept that there's not going to be a programme of this kind on TV, or give them the bloody clips and be thrilled that they're being seen by millions of people."

He agreed that the industry needed to follow the example of the music industry, which routinely makes some content free to bloggers and online audiences in order to attract music lovers to check out new acts."These are the nonsenses that this industry has always been susceptible to," he added. "You are building the next generation of audiences and they should be all over it like a rash. It's this inability to see the big picture, this narrowness of thinking, which has for many many years muddled matters."

Puttnam suggested that the government's new digital economy bill, which is partly aimed at reducing internet piracy, might not be capable of bringing a halt to illegal downloading in its present form.

"For me it's a staging post," he said. "One of the mistakes made is allowing the ISPs to pretend they are not part of a retail chain. If you or I wanted to open a chemist shop we would have to pay attention to health and safety and the nature of the products that we sold. We couldn't just serve anyone, for instance. Somehow or other we've allowed the ISPs to drift into a mindset that's allowed them to think that they are somehow inured to the forces of the law. Government has failed to get that message across."

Puttnam said he felt that one of the best ways to encourage film fans to make legal purchases was to ask popular film-makers to join the education campaign. "You've got to get Ken Loach out there, Mike Leigh out there so that people understand that this is a cycle of finance," he said. "If you cut off their ability to raise money there aren't going to be any movies. There's a generation of film-makers who audiences have respect for, that have got to come out and make this clear."

During his speech, Puttnam suggested a rather more direct approach, in the shape of a change in the law to make the use of camcorders in cinemas specifically illegal. He also said film content must be available legally online "in ways consumers want, and at prices they can afford" if people were to be dissuaded from using illegal download sites.

"I don't believe for a second – and see no evidence – that today's young generation of consumers is inherently evil and has no intention of ever paying for anything," he said. "But multi-channel broadcasting and the web have brought a massive proliferation in viewing options and an explosion of choice, and as we've learned to our cost, content in a digital form is relatively easy to transfer and copy."