The threatening letter on the doormat about licence fee non-payment might soon be joined by another from your local internet service provider. At least it will if you have been virally spreading Coldplay without permission. Bereft, perhaps, of enough incidents of dangerous dogs to merit new legislation, the government is attempting to cut illegal downloading activity by up to 80%. In an initiative involving the record industry trade body, the BPI, the film industry and the government, a memorandum of understanding has been drawn up that will potentially see the half-dozen largest internet service providers in the UK sending out around 1,000 letters a week as a warning to those who use their bandwidth to illegally download, or worse, upload and share music and films.

The move echoes 80s campaigns that tried to persuade students buying bootleg tapes in Camden that their £2.99 would immediately go into the pockets of the IRA or the National Front. But, as the warnings are of a less altruistic and more personal nature - carry on doing this and we will cut off your broadband - the effects might be more immediate and long-lasting. While nobody should endorse illegal file-sharing, the issue of monitoring internet use is controversial. It reminds people there is an ability to monitor and store data about individuals at the most granular and unwelcome level. Obviously, this happens all the time, but the increasingly public reminders raise some very uncomfortable questions about personal freedom versus commercial compliance in the future.

At one end of the thinking on intellectual property, law and the internet, best represented by the US lawyer and open-access campaigner Larry Lessig, the view is, not unreasonably, that the current version of copyright is so broken that we need to rethink it rather than constantly try to enforce it. (Although only two weeks ago, Europe's internal markets and services commissioner, Charlie McCreevy, outlined plans to extend copyright on recorded music to 95 years from the current 50.)

Can the free-content genie of the internet really be forced back into the bottle? The answer will depend on how hard companies want to try, how much they are prepared to spend on it and whether they are happy to risk audience extinction. One of the facets of the viral nature of the internet is that reach trumps revenue - and might occasionally undermine it - but it doesn't completely collapse the value chain. We are all in the music business now: we have to accept that the value of content is going to be essentially nil, but that the opportunity to monetise the experience through live gatherings, merchandising, hard copy sales and new advertising models might partially make up for the end of the distribution monopolies.

The record industry, and the ISPs for that matter, might reflect on the fact that neither they nor governments and regulators have had the greatest effect on reversing the decline in paid-for music. It was Steve Jobs at Apple who came at the problem with a new model that put the audience at the heart of the equation. Writing on the Guardian's website last week, the musician Billy Bragg noted that artists who want to be paid for their efforts are nevertheless uncomfortable about the idea of their fans being harassed or even penalised for listening to their music. But his suggestion of a kind of licence fee for music evokes images of more letters on the mat.

If the campaign succeeds, then what? The free downloaders will not replace the illegal sharing with paid-for music. They might be less inclined to populate the festivals or buy the T-shirts. They might turn off their computers and learn an instrument instead or, more likely, find a different online activity to fill the void.