Online piracy has been drastically reduced in New Zealand since the introduction of a graduation response system last year, according to the entertainment industry.

The nation passed a three-strikes law (dubbed "Skynet") last April that works similar to France's policy: alleged first and second-time offenders receive warnings from their ISP, while folks caught a third time risk penalties including the loss of their Internet service for as long as six months and fines of up to NZ$15,000 (about US$12,000).

According to the Federation Against Copyright Theft, that measure immediately halved the rate at which top-200 movies were being viewed in New Zealand (110,000 in August to 50,000 in September, when the three-strikes law was implemented).

Meanwhile, the Recording Industry Association of New Zealand (RIANZ) estimates that the overall use of peer-to-peer filesharing services has dropped 18% since Skynet's rollout. However, both outfits note that progress has plateaued with existing anti-piracy efforts.

About 41% of New Zealanders accessed copyright infringing services in February, higher than the global average of 28%, and RIANZ says it'll be costly to corner the remaining filesharers unless ISPs charge less to send infringement notifications. Currently, the group pays NZ$25 per letter and it has sent 2,766 notices since last October. RIANZ wants to scale this up to 5,000 letters per month at NZ$2 per letter, though that's easier said than done, as ISPs reportedly want to raise the existing price several fold.

Telecom, one such provider, wants the rate bumped to NZ$104 as it spent over half a million dollars to comply with Skynet, yet it has only sent 1,238 notices ($30,950 at $25 each). Despite pushing for more infringement notices, RIANZ failed to act on three opportunities to bring third-strikers before the Copyright Tribunal, which would have potentially resulted in hefty fines. It's also worth noting that the piracy figures don't account for those who continued infringing through a VPN after Skynet's introduction.