Before anyone starts jumping down my throat about how great Pandora is, how bad the RIAA is or how this is all about restoring our rights as consumers let me say this….

Pandora is a great service; and one that the other 95% of the world would love to use as well but that isn’t able to. I; and the rest of the world outside of the US, loved using Pandora up until it was chopped off at the knees by the music industry as they used copyright laws and their royalty system like a chainsaw. Even though this latest call to arms was due to yet another trade association trying to kill off any competition it doesn’t change the fact that this Pandora publicity is only a minor part of a much larger issue.

The actual Webcasters Bill that is being raised above the crowd like some flag of victory doesn’t change anything even it is passed. Take a look at the summary of the actual bill for the short form explanation of what the bill actually does (you can read the whole thing here)

SUMMARY

H.R. 7084 contains technical amendments to the Small Webcasting Settlement Act of 2002 (P.L. 107-321) which will permit commercial and noncommercial webcasters to negotiate royalty rates and terms other than those determined by the Copyright Royalty Board (CRB) in its May 2007 decision.  That decision was the basis for legislation introduced last year and is currently subject to a legal challenge at the D.C. Circuit Court of Appeals, which has, thus far, upheld the market rates and terms set by the CRB.

The key line here is …which will permit commercial and noncommercial webcasters to negotiate royalty rates. Wow, now US webcasters can negotiate with music labels outside of the US centric royalty structure contolled by the music labels. Well big whoop-di-doo – just because you have been given a right to negotiate doesn’t mean that the bloodsuckers on the other side of the table give a shit about your offers or that they will even come to the table. As with all things to do with the music labels and the RIAA (and now the NAB) they don’t care about what the webcasters want. They only care about how much money they can suck from you even if it means you going bankrupt.

The fact is that webcasters are being held up against the wall with a gun to their heads. They are being forced into a position where they have to pay more in royalties that what they can ever hope to pull in by advertising or subscriptions combined and still make a profit margin. It doesn’t matter if it is a serice like Pandora or a music loving fan streaming their favorite music on the web and not making a cent. Even though Corvida in a post on ReadWriteWeb liken this latest event to being a huge success; which I highly question, she also points out that this is only a stopgap measure

While this is a huge success for web radio broadcasters, it’s not everlasting. The Act will allow web radio broadcasters to negotiate with the music industry only while Congress is out of session. They have until February 15th to settle upon a new royalty rate. While four months may seem like a long time, we understand how much of a hassle the music industry can be to the world of all things digital.

I would suggest that the last sentence is nothing short of a big understatement given that this doesn’t change the fact that the music labels and the RIAA would be just as happy to negotiate webcasters out of existence and royalty rates are their best weapon. Like Paul Glazowski points out over at Mashable

Rates which, in short, are what can either ensure the continued existence of such services or drive many to go belly up just as their collective popularity is increase

In addition this does nothing to address the biggest problem for webcasters in the US – they are being cut off from the rest of the world. They can cut all the royalty deals they want and exist on literally penny profit margins but that doesn’t change the fact that they are still isolated. As a result both the webcasters and the users are being held ransom by the music labels and the RIAA. So remember this while you are all slapping yourselfs on the back over this short lived victory – it doesn’t matter to the rest of the world because nothing has changed.