(Reuters) - A U.S. copyright board on Wednesday raised music royalty rates that Pandora Media Inc (P.N) and Internet radio stations will pay, setting new prices at a range Pandora called "balanced" and sending its shares up 20 percent in after-hours trade.
Radio companies and the music industry had lobbied for sharply different schedules on payments, which are a major cost for Pandora and an important source of income for artists.
The three-judge U.S. Copyright Royalty Board said Internet radio operators will have to pay 17 cents per 100 plays in 2016 as royalties for ad-supported streaming, up 21 percent from 14 cents now.
Pandora had asked for the rate to be lowered to 11 cents per hundred plays while SoundExchange, which distributes payments to record labels and artists, had asked for 25 cents per hundred, according to tech news website Ars Technica.
“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,” Pandora Chief Executive Brian McAndrews said in a statement.
The new rate will come to effect on Jan. 1 and be valid for the period of 2016-2020.
Pandora shares rose to $16.22 in after hours trade from a close of $13.44.
Reporting by Subrat Patnaik in Bengaluru and Peter Henderson in San Francisco; Editing by Bernard Orr and Cynthia Osterman