Internet radio services like Pandora will have to pay more to artists and their representative groups, according to a decision released today by the Copyright Royalty (CRB). The basic per-song rates paid by Pandora will go from $.0014 per song, or 14 cents per 100 songs played, to $.0017. That's slightly more than a 20 percent increase.

The $.0017 rate will remain in effect for all of 2016 and then may increase according to the Consumer Price Index, a common measure of inflation, through 2020. At that point, the CRB will make another rate decision.

Today's decision resolves a long legal fight in which Pandora was asking to pay a lower rate of $.0011. SoundExchange, which distributes money to record labels and artists, wanted the rate to nearly double to $.0025 per stream.

The decision applies to all Internet radio providers, of which Pandora is the largest. Its competitors like iHeartRadio will have to pay the same rate.

The CRB is a little-known three judge panel that makes decisions critical to the economics of Internet radio. Currently, Pandora pays a bit more than a tenth of a penny for each track that gets streamed: again, $.0014 per stream or 14 cents per 100 songs played.

The $.0017 rate will only apply to "non-subscription" services—Pandora's basic ad-supported radio, in other words. A higher rate of $.0022 will apply for Pandora subscribers, who don't hear ads, and other "subscription" services. Pandora has said about 95 percent of its listeners choose the free ad-supported option.

The copyright decision doesn't apply to online music services where users can choose songs, like Spotify or Apple Music. Those services negotiate rates directly with the music labels. It's only "non-interactive" radio-like services that have rates determined by the Copyright Royalty Board.

Nearly half of Pandora's revenue already goes to paying copyright royalties, most of that going to record labels. The company's executives and lawyers have argued it can't afford to pay more. The company competes with terrestrial radio, which pays nothing at all to musical performers or record labels, an exemption that the music industry has been fuming about and trying to change for a long time.

Pandora Chief Financial Officer Michael Herring told the The New York Times last week that he expected the judges to "come out with a rate that is reasonable, that is in the ballpark of about what Pandora is paying today."

The market reacted well to the moderate increase, with Pandora stock up 19 percent in after-hours trading.

The CRB will release a full written determination explaining the ruling only after the parties have had a chance to review it and scrub out confidential information from the public version.

Pandora's high royalty payments haven't stopped it from making major acquisitions lately. Last month, it purchased the assets of erstwhile competitor Rdio for $75 million. In October, Pandora bought ticket purveyor Ticketfly for $450 million.

The Internet radio company recently made a concession in another legal dispute when it agreed to pay $90 million to record labels for streaming pre-1972 songs. Those songs aren't covered by federal copyright, but copyright owners successfully made the argument that the older tunes still require payment under various state-level copyrights.

UPDATE: Pandora has put out a press release responding positively to the rate assessment. “This is a balanced rate that we can work with and grow from. The new rate structure will enable continued investment by Pandora to drive forward a thriving and vibrant future for music,” said Pandora CEO Brian McAndrews. "This decision provides much-needed certainty for both Pandora and the music industry. We are moving full-steam ahead with our ambitious plan to continue to build the world’s most powerful music discovery platform."

The Pandora response also notes that the subscriber rate actually went down from $.0025 to $.0022, so Pandora's "blended" rate increased by about 15 percent.