Three strikes out: Anti-piracy scheme shelved over 'prohibitive' costs

Worried about getting a letter in the mail over your torrenting habits? You may have just been handed a stay of execution.

A three strikes scheme to track down individual pirates and send them warning letters about their downloading habits has been all but quashed, after rights holders and ISPs decided that manually targeting and contacting downloaders would be too costly.

While rights holders have long heralded this kind of "graduated response" as a way to staunch their financial losses in the face of ongoing piracy and save the bottom line, the head of one of Australia's biggest film production and distribution studios has told CNET that the question of costs ultimately stymied the plan.

Speaking to CNET from his Melbourne office, Village Roadshow Co-CEO Graham Burke today revealed that, after months of negotiations spurred on by Government intervention, rights holders and ISPs have officially shelved the scheme.

"We reached the conclusion after having an independent audit firm evaluate the cost of sending out the notices, and we concluded that it was too much of an imposition to ask the ISPs, and also from our own point of view, the amount it would cost," he said.

"So we decided not to push it forward."

A three strikes scheme has been on the table for years in Australia, with the Federal Government saying it could be used to combat copyright infringement in Australia in early 2014.

In December that year, then Communications Minister Malcolm Turnbull announced that the industry (meaning rights holders and ISPs) would be required to introduce their own graduated response scheme or have it done for them by the Government. But after the draft code was released in February 2015, the September 2015 implementation date came and went amid speculation that rights holders and ISPs couldn't come to an agreement over costs.

The concept might sound straightforward: Rights holders detect pirate activity (usually by detecting IP addresses participating in torrent swarms), then contact the relevant ISP connected to that IP address and demand that the service provider send a warning letter to the account holder. If the activity doesn't stop, the notices warnings become more serious (the graduated response) before a 'third strike' allows for the commencement of legal action.

But while rights holders say the scheme educates internet users on legitimately accessing content, ISPs have long warned that implementing such a scheme would be onerous and expensive. And now it seems the rights holders agree.

"At the moment, it's manual," said Burke. "And it's just so labour intense, that it's somewhere in the vicinity of $16 to $20 per notice, which is prohibitive. You might as well give people a DVD."

But pirates haven't been let off the hook just yet. While Burke said a manual system for sending notices has been shelved, rights holders have been appeased by the promise of an automated system to hunt down copyright infringers in future.

According to Burke, rights holders decided to hold off pursuing three strikes "in the spirit of good will," and to wait for an automated system, "which is coming."

"When automation occurs, instead of costing AU$16 or AU$20 a notice, which is just prohibitive, it will cost cents per notice," he said. "In other words, the ISPs will have an automated system that can be done simply, as opposed to at the moment it's manual."

Burke could not give a timeline on such an automated approach, "just that it's coming."

The news comes as Village Roadshow revealed it would be the first rights holder to take legal action to block a website deemed to "facilitate piracy." The legal action has been brought under the Government's site-blocking legislation, which was first announced at the same time the three strikes code was first mooted.

Village Roadshow is seeking to block online movie streaming website, SolarMovie through the Federal Court.

"The Government, by its bi-partisan action, has given us the weapons to begin the fight back against pirates -- and they've had open slather," he told CNET.

"We figured SolarMovie is without doubt a website whose primary purpose is to infringe [copyright], so we chose that one as the first one. It's also a site that's been blocked in a number of other jurisdictions...including the United Kingdom, Italy and, yesterday, in Singapore."