Under the current rate, Pandora and others pay 14 cents for every 100 plays, and the CRB has heard years of arguments for how that number should be adjusted in an age where radio itself is shifting rapidly. Pandora would like to see that lowered, to around 11 cents. SoundExchange, a group that represents artists in digital rights matters, has been the leading voice countering Pandora. It has proposed raising it to 25 cents — echoing complaints from the music industry that streaming services don't pay a fair amount to artists.
The ruling by the CRB will not apply to all streaming music firms equally. Spotify, for example, is not affected by the decision because it uses a different model for negotiating rights. The core of a business like Spotify or Apple Music's streaming lets users pick their own songs, rather than having an algorithm pick tunes based off of user preferences.
That more radio-like business, which is known as a "non-interactive" model, is the only kind being addressed by the Wednesday ruling.
Copyright issues govern much of how the streaming music industry runs. The way laws apply in different countries can change how, or even if, a company operates there.
It's also crucial when it comes to what music is available on a certain service. Pandora may be subject to rules that Spotify isn't — such as the one coming down Wednesday — but that can work in its favor as well. Its radio model means that it has a general right to broadcast music released in the U.S., while Spotify has to negotiate with publishing companies for tracks. That's why artists can opt not to have their music stream on services such as Spotify, but not others.
As to how consumers will be affected by Wednesday's ruling? That's a little murky.
The company has already had trouble turning a profit — even with nearly 80 million active users logging more than 5 billion listening hours in its most recent quarter. A key problem for Pandora is that growth only means more expenses; it pays based on how often songs get played, so having more users listening to tunes means that it's paying more for them to do so.
Pandora does have a subscription option, but fewer than 5 percent of its users opt to pay for the service. If Pandora finds its business model in even more dire straits, chances are that it will have to adjust its operations accordingly.