Pandora said it's confident it can win later since the appeals court — the 2nd U.S. Circuit Court of Appeals in New York — last week ruled in its favour in a case against the other major publishing group known as ASCAP.
Thursday's ruling would force Pandora to pay 2.5 per cent of its revenue to songwriters and music publishers, up from 1.75 per cent. Last week's appeals court ruling allowed Pandora's 1.85 per cent rate to ASCAP to stay intact.
If the appeal fails, Pandora says its costs could rise by 0.8 per cent of revenue, which would have amounted to about $1.7 million last quarter.
BMI called the ruling a victory for the more than 650,000 songwriters, composers and publishers it represents.
"This is an important step forward in valuing music in the digital age," BMI said in a statement.