New Zealand's contentious 'three strikes' law targeting copyright infringers effectively halved the number of times popular movies were viewed illegally online in the first month, according to the rights lobby group the Federation Against Copyright Theft (NZ FACT).

In a submission to a government review of the legislation's efficiency, NZ FACT claimed New Zealanders illegally viewed movies in the top 200 online 110,000 times in August last year — the month before the new law took effect — but only 50,000 times in September.

Fairfax NZ first reported the claims after obtaining the information under the Official Information Act.

Despite the drop in the first month, NZ FACT noted there had been no “discernible progress” since then.

Another lobby group, the Recording Industry Association of New Zealand (RIANZ), argued 41 percent of New Zealand internet users accessed “copyright infringing services online” in February this year, compared to 28 percent on average globally.

Dubbed “the Skynet” law by some members of Parliament, the act allows for fines up to $NZ15,000 ($AU11,550) on individual users if found guilty by the Copyright Tribunal.

The New Zealand Government had back-tracked on plans to terminate users' internet connections if found guilty of infringement however.

But rights holder groups remained unhappy with the $NZ25 fee payable to cover internet service providers' costs of processing notices.

The regime for the notice fees is currently under review by the Ministry of Economic Development, with submissions sought from providers and rights holders.

NZ FACT said it had not sent out any infringement notices because of the fee, and called for the fee to be reduced to a few cents per notice.

RIANZ had sent out a total 2766 infringement noticed to ISPs between October last year and April 26, 2012, to be forwarded to customers allegedly downloading music from artists such as Lady Gaga and Rihanna.

Of the notices, 58 were challenged by those accused of infringement. Only two of the challenges were judged to be valid, however.

A reduced fee would allow RIANZ to send out 5000 infringement notices per month, it said.

The current low level of notices effectively rendered the law impotent, the group argued, as public fear of receiving a notice are minimal.

ISPs and telcos have continued to push for a higher processing fee however, with incumbent Telecom New Zealand suggesting a $NZ104 ($AU80) per notice fine.

The company said it had spent $NZ534,416 ($AU411,705) to comply with the “Skynet” law, sending out 1238 notices, at an individual cost of $NZ431.68 ($AU332) to the telco.