True Blood, Bernie will be watching within a few hours.' />
A new law to stop the illegal download industry begins in September. Andrew Laxon discovers who might get caught - and who still might get away with piracy.

When the fangs are bared in the latest US episode of Anna Paquin's True Blood, Bernie will be watching within a few hours.

The 24-year-old Aucklander doesn't wait for the New Zealand version of the show, which is weeks behind the fourth season in America.

He downloads a copy illegally from the popular file sharing site Pirate Bay, which allows millions of people to collect free movies, TV shows, music and games online.

In a typical week Bernie - who did not want to use his real name - takes about two or three music albums, a couple of TV shows and two or three movies.


He also likes to get free copies of the latest software programmes such as Photoshop and editing programme Final Cut Pro, which are worth hundreds of dollars as legal downloads.

Bernie is among the 31 per cent of 15 to 30-year-olds in this country who admit they regularly watch movies online without paying for them.

At a conservative estimate, New Zealanders are now illegally downloading at least 10,000 songs, movies and TV programmes every day, prompting the entertainment industry to claim huge losses and the Government to respond this year with a new law that aims to crack down on internet piracy.

From September 1, if you download copyright material you could receive a notice asking you to stop. If you continue, you will receive a second notice warning of legal action. If you ignore a third notice, you will have to prove your innocence at the Copyright Tribunal, which can impose a $15,000 fine.

The change, driven by the big US-based film studios, will target people downloading brand new films, such as the latest Harry Potter movie, or a hit TV series like True Blood.

But a month away from the start date, the new law is still bogged down in confusion. Critics are still furious at the impact on civil liberties - especially the presumption of guilt until proven otherwise - and predict chaos in finding the real offenders at home and business computers with multiple users. internet service providers (ISPs), which have to deliver the infringement notices to their customers, say it will cost them far too much time and money.

And the most prolific offenders are expected to sidestep the new restrictions easily by hiding their true web address or using services which can evade detection.

Bernie says he would set up a proxy server, which hides the downloader's internet Protocol (IP) address behind the IP address of the US-based server.

The 24-year-old business analyst and student is heading overseas so he isn't too worried about how the new law will affect his computer use. But if he was staying he would only slightly change his downloading habits.

"Definitely (I would) with the bigger things like software because you know they're going to come after you because of the sheer value of it. But most of the music I download is not produced by the big labels so I wouldn't be as scared when it came to that."

Alfred, a 30-year-old businessman who also did not want to use his real name, argues that downloaders like him are the entertainment industry's biggest customers. "I'm going to films at Imax and spending money on DVDs and going to the film festival. My mother watches TV and goes to Video Ezy when films are a dollar - she doesn't download anything."

His downloads are dictated by his 20 gigabyte monthly limit, which means about 20 hours of TV shows, the odd movie and occasionally some music.

He concentrates on TV shows not available in New Zealand, such as Game of Thrones, a mediaeval fantasy series on American network HBO.

Like Bernie, he says his main motivation is convenience, not cost. It could take six months or more for the DVD to reach New Zealand but the online community is talking about the series now. He already uses software that identifies likely spies for the film and TV studios based on their IP addresses and refuses to trade files with them.

Technology blogger Thomas Beagle says many downloaders will also avoid detection on sites such as Rapidshare, which don't use peer-to-peer file sharing. However he thinks entertainment companies won't mind the low hit rate because the real target of the crackdown is the general public, rather than serial downloaders.

"To be honest the rights holders have given up on catching everyone and getting their money back," says Beagle, who runs the website Tech Liberty NZ. "What they want to do is slow people down and make everyone a little bit scared."

Sony Pictures general manager Andrew Cornwell agrees, although he puts it more tactfully.

"You're never going to stop it entirely. There will always be some hard core people who want to take on the system and get a lot of pleasure out of defeating it and proving they're smarter than the next person.

"The whole thrust of it is aimed at middle New Zealand who might do the occasional download.

"A lot of people perceive it's like getting a parking ticket or a speeding fine, rather than actually stealing something. And if you can change a significant number of people in terms of that perception then you're part of the way there."

The battle to change that perception could be difficult as downloading free stuff has become a way of life for many New Zealanders. internet service provider Orcon says about 10 to 15 per cent of its traffic is on peer-to-peer sites. Chief executive Scott Bartlett says this is not necessarily all piracy, as file-sharing can be legal.

However entertainment industry figures suggest at least 10,000 illegal downloads a day in New Zealand of music, films and TV programmes.

Last year about 160,000 illegal file-sharing transfers of films and TV programmes occurred each month, according to the New Zealand Federation Against Copyright Theft (NZFact), which represents the US-based Motion Picture Association. The downloading was split roughly evenly between films and TV shows.

The Recording Industry Association of New Zealand (Rianz) says it found almost 5000 illegal downloads a day during a two-week survey in 2009 of one of the most popular file-sharing sites, Limewire.

The total is likely to be higher with the addition of other music websites, plus downloads of games and software - estimated at 15 per cent of all illegal downloads in a 2008 British survey.

Films and TV shows are seen as especially vulnerable as download speeds improve. In May, a survey of 4000 users of the movie site Flicks found 51 per cent downloaded films regularly (at least once every two months) but 87 per cent of the regular downloaders did not pay for their films. Downloading ranked only just behind watching DVDs as the most popular way of watching films at home.

A 2005 study for the Motion Picture Association estimated the film and TV industry lost a quarter of potential sales - $70 million a year - to piracy.

However Treasury officials who advised the Government on the new law said that while illegal downloading was clearly harming the entertainment industry and should be tackled, the scale of the problem was unclear and the industry's reluctance to offer digital content was partly to blame.

Their regulatory impact report said international studies suggested lost sales through piracy could range between none to 20 per cent for music and between 2 and 9 per cent for film and television.

It estimated that between 1000 and 2400 cases could be taken to the Copyright Tribunal in the first year.

Cornwell is well aware that any heavy-handed cases brought by film studios will be seen as "the big ugly multi-national clobbering the little guy". He hopes most people will stop when they get the first notice, so relatively few cases make it to the tribunal.

"It's an education thing as much as anything else - you won't see it as a big hammer coming down, it'll be more of a gentle prod."

Alfred remains sceptical. He predicts some less confident downloaders will hold back for a while when the new law starts. But once they realise no one is going to be "dragged out of their homes" under the new law, the lure of their favourite shows will draw them back.

"It didn't work with music sharing and I don't see why it's going to work with movies. It's just going to alienate the people who are really keen and won't really solve the problem at all."

How the watchdogs will catch you

How does the new law work?
The Copyright (Infringing File Sharing) Amendment Bill will allow record companies and film and TV studios to pursue internet users who download copyright material from file sharing websites. Downloaders will receive up to three notices warning them to stop or face a Copyright Tribunal hearing and a fine of up to $15,000.

Can my internet connection be cut?
Not at this stage. The Government dropped a plan for a six-month internet disconnection. However, this could be introduced in future, if it's decided the law is not working.

Will I get a notice for watching copyright shows on YouTube?
No. internet NZ reported last week that the Ministry of Economic Development had clarified that the new law was aimed only at peer-to-peer networks which download files from one computer to another. It will not cover video or music streaming services or downloading from file hosting sites such as MediaFire and 4shared.

How will downloaders be caught?
The New Zealand Federation Against Copyright Theft (NZFact) runs the policing operation on behalf of the major film studios. Executive director Tony Eaton says an independent company will find illegal downloaders by joining the "swarm" of users who log on to sites like Pirate Bay to share files.

The spy computer will record the downloader's internet Protocol (IP) address - which identifies the computer being used - and the section of copyright file it has received.

The detection company then gives the information to the copyright holder, which can send an infringement notice to the downloader via their internet service provider (ISP). Only ISPs will be able to match the IP address with the computer's owner.

What's the threshhold for sending out a notice?
Eaton says he is still negotiating this with the ISPs. Several have complained they will be swamped by the workload, so he wants to make sure the new law doesn't get bogged down with too many infringement notices. He says the law does not allow copyright holders to tally up the number of downloads from one IP address over a certain time, so the system will target the latest hit movies and TV shows, rather than numbers.

Can they see what people are downloading already?
No one is saying but copyright holders have been able to detect illegal downloads since at least 2006, when a trial run of pirate-hunting software found 1153 users attempting to download the hit children's movie Chicken Little at 10am on a Monday. One American study found 15 per cent of those trawling the internet were from the Government or the recording industry trying to catch illegal downloaders.

Clarification - Tony Eaton said on Monday that the number of notices was still a matter for discussion between NZFact and the ISPs.