'Three Strikes' Policy Targets Illegal File-Sharing

Authorities in New Zealand are currently testing a new "three strikes" policy designed to reduce copyright infringement. It's not yet clear, however, if the idea is having a significant deterrent effect on illegal file-sharing.

The 'test' policy is based on the idea that a customer deserves two warnings about his or her alleged infringements, and then can face serious consequences for a third instance of illegal activity.

In New Zealand, a law introduced last year allows a copyright holder to take a three-time infringer to a special tribunal where they can be fined as much as NZ $15,000 (approximately $12,000 USD).

That seems harsh, but so far only three customers have been found guilty of that third strike. In all three cases, the record companies decided not to take the offenders to the special tribunal. (Source: torrentfreak.com)

Three Strikes Threat Has Overnight Effect

Nevertheless, publicity about the new policy seems to have had an immediate positive effect.

Newly published estimates suggest that the 200 most popular movies on file-sharing sites were viewed illegally a total of 110,000 times in August of 2011.

In September of that year, however, the number dropped to 50,000 and has held at the lower level ever since.

But it's hard to be sure of the effect of the new policy on illegal movie sharing, because movie studios have yet to initiate a single letter of complaint against New Zealand-based copyright infringers.

One reason is that Internet companies charge copyright holders NZ $25 (approximately $20 USD) for each letter of complaint they process.

Internet providers say the charge is necessary because they have invested a lot of money in systems to administrate the three strikes system, and they need to get that money back. Some suggest the fees could actually be higher.

Music Firms Want Lower Piracy Policing Costs

At the current fee level, representatives of New Zealand's music industry argue the companies can't afford to send out as many letters as they would like.

For example, the Recording Industry Association of New Zealand (RIANZ) sent out 2,766 letters of complaint about copyright infringement during a recent six month period.

However, the agency says that a lower administrative charge would allow it to send about 5,000 such letters each month. (Source: bbc.co.uk)

RIANZ estimates that about 40 per cent of New Zealand music buyers are still using services commonly associated with illegal file-sharing.

Without more data, however, it's hard for observers to tell if this number shows that the three strikes system doesn't work, or that it does, and that sending more customers the copyright complaint letters would cut down even more on music piracy.