The country's copyright law is to get its first overhaul in a decade.
The government confirmed on Friday it would carry on with the previous government's plan for a review, and it would start in April next year.
It is likely to look at the issues of fair use, safe harbours and illegal downloading.
In a high-profile case recently, the National government was found guilty of using music that sounded too similar to American rapper Eminem's song "Lose Yourself".
New Zealand Screen Association managing director Matthew Cheetham said the rights and revenue of rights holders were "gradually being whittled away". The association represents film and television content and distribution companies in New Zealand, including major Hollywood companies.
"In New Zealand piracy is almost an accepted thing, because no one's really doing anything about it, because no one actually can do anything about it." Mr Cheetham said.
"As new technologies have evolved, the law has struggled to keep pace with those new technologies and to make sure that the law is fit for purpose in the digital age."
He said the law should allow for websites responsible for illegal file-sharing to be blocked, as is the law in Australia, Singapore and the United Kingdom.
"If the site is infringing [a court] can order internet service providers to block access to that site. Forty-two countries around the world have recognised that blocking access when it's carefully defined is a perfectly legitimate avenue for rights holders to protect their rights."
That would not solve piracy issues, but would be a start, said Mr Cheetham.
He said Pirate Bay was the 22nd most popular website in New Zealand, as listed last week. "It's an indication that piracy continues to be a major problem here. The easiest thing would be to block access to that site."
Three strikes law little used - INZ
The Copyright (Infringing File Sharing) Amendment Act 2011 - also known as the "three strikes law"- came into force in September 2011. Internet account holders can be fined for illegally downloading and uploading copyright material, after being warned three times.
Mr Cheetham said the amendment had been too expensive to use and hadn't done anything to stop piracy
"It's $25 a notice, and when you've got tens, if not hundreds, of thousands of people infringing per month, the cost of $25 a notice quickly becomes prohibitive."
The handful of fines under the law, the biggest of which was around $1000, weren't going to act as any kind of deterrent, he said.
Internet New Zealand deputy chief executive Andrew Cushen had "no doubts" piracy would be up for debate, but it was not as rampant as it used to be.
"We've seen a huge explosion in paid-for content models. I'm pretty sure that if you look at the stats around music piracy, thanks to services like Spotify and their compatriots, the amount of music that is actually being stolen is far less than before."
He said the three-strikes law had sought to give content-owners the legal means to protect their rights, but was hardly being used.
"We have an entire regime that allows copyright holders to seek and send notices to users that are committing piracy and actually have a process in a court-based system that allows remedies to be pursued. None of them are using it. Why would we now look at a wholly different solution that none of them are going to use as well."
He said site-blocking was not reasonable. "It's just against the way the internet works. Site-blocks are actually a really poor solution because they can be evaded by pretty simple technological tools."
'iPod law in a smartphone world'
Mr Cushen said New Zealand should also consider its fair use which was not in current New Zealand copyright law.
"We think New Zealand is out of step with the rest of the world. When I look around the majority of OECD countries there is some form of fair use provision and it, frankly, makes the law far clearer and far easier to implement.
"We're seeing the ramifications of not having a fair use provision play out in New Zealand right now with various parties taking each other to court over whether or not they can use footage from things like the Olympics, and that seems a bit silly to us."
Mr Cushen said technology had outpaced the law and it needed to be principles-based instead of too specific about certain technologies.
"The current law is not a good match for the current world that we live in now - it's an iPod law in a smartphone world."