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Termination comes after RIAA and MPAA "went ballistic"

While corruption in Congress is nothing new (see: Lincoln), with the rise of modern lobbying things have reached impressive new proportions, as chronicled on OpenSecretsMaplight, and other well-researched online voter resources.  

I. MPAA, RIAA Get Republican Staffer Fired

One of the most active lobbying influences in Washington D.C. have been media corporations, represented by trade groups like the Motion Picture Association of America (MPAA) and Recording Industry Association of America (RIAA).  Recent estimates indicate that big media paid 10 percent of members of Congress's total reelection budget in the previous election cycle -- and the payments almost paid off as big media's Orwellian SOPA (Stop Online Piracy Act) was only struck down in the eleventh hour amid a storm of citizen lashback.

Now comes word that a top traditional conservative (or in some source's words "Libertarian-leaning") staffer on the Republican Study Committee (RSC) has been terminated for his stance on copyright reform.

The fired staffer's name is Derek Khanna, and he turned heads in mid-November when he authored a pro-reform memo [background], which was thoroughly vetted and published by the RSC, a key advisory body to the conservative wing of federal Republican Representatives in Congress.

RIAA Steal a Car
In his memo, Derek Khanna took issue with the RIAA's traditional rhetoric that piracy is a crime worth punishing with fines of up to $150,000 USD per song. [Image Source: RIAA]

In the memo (available below), Mr. Khanna argued that punishments of up to $150,000 USD per work for private citizens found guilty of filesharing are grossly out of line with reality.
Republican Study Committee Intellectual Property Brief

According to TechDirt's sources:

As soon as [the Khanna memo] was published, the MPAA and RIAA apparently went ballistic and hit the phones hard, demanding that the RSC take down the report. They succeeded.

RSC director subsequently complained that the memo had been published without adequate review, denying that the vetting process (which did occur) was sufficient.  He essentially bowed the RIAA and MPAA demands, disavowing the Libertarian/reformist memo.

Representative Steve Scalise (R-Lous.) recalls being "approached by several Republican members of Congress who were upset [about Khan's memo]", according to The Washington Examiner and ArsTechnica.  Among those representatives (according to The Washington Examiner) was Rep. Marsha Blackburn (R-Tenn.), who according to The Center for Responsive Politics (OpenSecrets) received more money from the music industry than any other Republican Congressional candidate.

Rep. Marsha Blackburn
Funded by the music industry, Rep. Blackburn demanded Mr. Khanna be sacked for his comments, which offended her corporate masters. [Image Source: AP]

In the wake of the not-so-invisible hand exerting its influence on the elected officials, Rep. Scalise reportedly successfully pushed the RSC to fire Mr. Khanna, who will not be returning when Congress reconvenes in January.

II. Disavowing the Conservative Wing to Placate Special Interests

The move potentially puts the end to the career in the Republican party of the prominent-tech savvy 24-year-old, who many viewed as among the faces of young conservatism in the party.  Active in Republican politics during his undergraduate education at University of Massachusetts at Amherst, Mr. Khanna's first official post was working as an advisor to Sen. Scott Brown (R-Mass.).

Mr. Khanna has international experience, having studied in the Middle East, and was a key advisor to the RSC in cybersecurity with his resume [LinkedIn] citing his interest in "building computers and beta testing software" and experience in "C++, Backtrack, Python, Sql, Java, Dreamweaver/Photoshop, statistical modeling".

Derek Khanna
Derek Khanna, former RSC staffer [Image Source: ArsTechnica/Derek Khanna]

The firing represents a key schism in the Republican ranks.  After all, Mr. Khanna may be singled out as the sacrificial lamb in the face of RIAA and MPAA wrath, but his sentiments were clearly shared to an extent by fellow staffers who vetted the memo.  

Conservative authors and IP analysts Chris Sprigman and Kal Raustiala echoed Mr. Khanna's sentiments in a post-election commentary, suggesting the Republican Party shift to a position of copyright reform to court young voters and libertarians.  Likewise, Jerry Brito, a scholar at the conservative/libertarian Mercatus Center think-tank, has just published "Copyright Unbalanced: From Incentive to Excess", a book which was honored by a special discussion panel by another top conservative/libertarian think-tank, The Cato Institute.

In other words, Reps. Scalise and Blackburn may have succeeded in firing one voice of reform, but their actions are dividing the Republican Party from its conservative/reformist backers.  In that regard the copyright reform question is perhaps a microcosm of the more macroscopic search for identity and the balance of special interests with principles that is occurring among Republicans on The Hill.

Sources: The Washington Examiner, ArsTechnica, TechDirt

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By quiksilvr on 12/7/2012 11:43:47 AM , Rating: 3
I was always under the impression that most (if not all) of a movie's "value" is reached when it is out in the theaters and they rake in the cash at the box office.

Even without pirating, how significant would legitimate disc/digital sales actually be in the grand scheme of things? Is it worth losing all this money on lobbyists, DRM, and bad PR?

Honestly, if all movies/shows were available for streaming for $25 a month, I'd buy that in a heart beat, and I'm pretty sure a significant number of people would too. Why not rake in the dough this way instead of kicking and screaming about how the world is moving to the 21st century?

RE: Confusing...
By someguy123 on 12/7/2012 12:01:36 PM , Rating: 2
Depending on territory disc scales can be extremely more profitable per sale since they aren't negotiating rates with theaters, and since the costs are much lower for stamping/shipping discs. I doubt it's actually worth the money wasted on these campaigns, though.

This is just about power. They don't feel in control of the consumer so they'll keep on lobbying until they can manage to get one government worker in every household monitoring your computer habits.

RE: Confusing...
By Shig on 12/7/2012 12:12:39 PM , Rating: 2
It's happening slowly quicksilvr, Netflix just inked a major deal with Disney to start supplying their content. It's the first time a major studio has picked the internet over paid cable.

At 150,000$ a song, most people would owe them billions of dollars, seems legit.

RE: Confusing...
By RufusM on 12/7/2012 12:36:04 PM , Rating: 4
Yes, disc sales can be huge since many times it's global in scale and reaches more markets where film distribution doesn't.

After trying all manner of DRM solutions, they have come to the realization that there is no technological solution for their "problems" so they seek a legal solution to control the market.

Never mind that breaking DRM and copying/distributing copyrighted content is already illegal and has very stiff penalties, they don't want to have to do things like: show proof, perform investigations, etc. They want to setup the legal system so the infrastructure providers become their watchdogs and policemen.

Bills like SOPA and the others is like mandating road construction crews need to document all passing motorists they see speeding. If they don't then they themselves will be charged with a crime for not following through with reporting. Ridiculous!

RE: Confusing...
By x10Unit1 on 12/7/2012 2:49:08 PM , Rating: 2
they don't want to have to do things like: show proof, perform investigations, etc. They want to setup the legal system so the infrastructure providers become their watchdogs and policemen.

Considering this is the path the legal system is headed toward, I don't see what makes MPAA/RIAA's request unreasonable.

RE: Confusing...
By StevoLincolnite on 12/7/2012 12:11:52 PM , Rating: 2

They should be giving incentives for people to want to buy their product, not forcing them to buy it with new laws and regulations. (Failing that, suing them for all that they are worth!)

They need to make it so movies and TV shows are readily available, cheap and easier to access than torrents and provide other goodies to make themselves an alternative to the free copy.
Enter: Steam.

Things like Netflix is a good start but again, it's not available across the planet and it's selection is going to be limited and... It doesn't always have the best quality and price point for people... And it's competition isn't any better either.

For example I like HBO TV shows like Band of Brothers, The Pacific, True Blood, Game of thrones... But guess what? However I can't buy it or rent it pretty much anywhere online. The alternative? Pirate it of course.

Mind you, I buy the Blu-ray once it's out, but new discs aren't always guaranteed to work in my Blu Ray player, due to the excessive DRM and the fact I am forever updating the device (Which I would be happy for not to be internet connected). - Talk about not making it easier for a paying consumer.

RE: Confusing...
By GatoRat on 12/7/2012 1:24:25 PM , Rating: 2
It isn't. In general the US theatrical release pays only for the production costs of the movie, sometimes the marketing costs as well, though not as often as you may think. The overseas theatrical release and presales to networks/netflix for showing the movie pre-DVD generates the net profits. Granted there are exceptions going both ways. Some movies make a huge profit in theaters, other never make a profit.

(The movie Cleaopatra from 1963 took ten years to break even. John Carter (2012) tanked in the US, but made money overseas--for example, it sold out in China--finally breaking even.)

RE: Confusing...
By ComputerJuice on 12/7/2012 4:05:38 PM , Rating: 2
1: John Carter was crap, despite breaking even should have lost money because it was not a good film. That may be subjective, but I believe the collective wallet of everyone in the world sort of drives that point home. Basically its called a bad product and thus should lose money. I wish I could have had my $17 refunded for watching that mess. Movies do not deserve to break even just because they are made.

2: Cleaopatra from 1963??? Why does a movie from that era have any bearing on this discussion? Distribution models, profit, marketing, production etc. were completely different in the years between 1963-1973.

Simply, major studios do bank on ticket sales to "break even". Everything else is profit. Thats a very simplified example of the model but it is the model that is used.

However, the argument here is about content profitability and how much those profits are actually impacted by pirates & illegal DL. Which has always been the debate. From the content provider every pirated/illegally streamed movie/mp3/tv show is lost profit. The providers count incomplete DL & streams as lost revenue. 1-bit of content does not mean someone would have paid $1-$25 for a movie/song/tv show nor even completed the DL. This is where the real disputes lie.

RE: Confusing...
By Stuka on 12/10/2012 10:21:58 AM , Rating: 2
I believe his point was that Cleopatra was an Academy Award winning film and John Carter was a complete artistic failure. Yet Carter reached the same financial milstone within months of release that took Cleo a decade. More to the point, you can easily argue that as we speak right now, Carter is 1000s of times more pirated than Cleopatra is even to this day. In the MPAA universe this would constitute a causal link that piracy actually stimlates sales.

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