Who's Afraid Of the HK Movie Industry? Pay Or Get Sued

Taiwan's China Post has an article about the Film Industry Response Group, a HK industry group that is clamping down on movie piracy, threatening to sue 42 illegal downloaders, which they can avoid by paying US $ 3,000 and never infringe their copyrights in the future.

In May Hong Kong's High Court ordered four Internet Service Providers to disclose the identities and addresses of the people who illegally downloaded "Fearless" (Huo Yuan Jia), "McDull, The Alumni" and "The Shopaaholics" (Jui oi nui yun kau muk kong). So far for customer privacy.

According to Agence France Presse (AFP) it was the first time Hong Kong film companies have taken legal action over illegal Internet downloads.

John Chong, deputy chairman of Media Asia was quoted saying that the illegal downloader could not hide and they were not tolerating more illegal actions.

BBC News quoted what film producer Charles Heung said to Reuters: "The government should be ashamed that we investors have to put up money to play police officer".

You can find China Post's AFP article here, and BBC News article here (with a picture including Chong left and Heung in the middle).

What would be the advice you would give to the HK industry group? Is sueing (potential) customers (infringers can be actual customers at the same time) the way forward to protect your rights, or will it alienate them from your products? Is it as Heung implicitly stated the role of the police and not of the movie makers? What's your opinion?
If the illegal downloaders are fearless, as the movie they have downloaded, they might decide not pay anything. That way they have a chance they will not get sued at all, and if they will, they have a chance that the fine will be lower. Then again, the risk is that a HK court will set an example and fine these small time infringers extra. What would be your advice if you were defending the illegal downloaders?