Pandora Media is eagerly awaiting a legal decision on royalty payments that may have huge consequences for its business. The Copyright Royalty Board, a panel of three federal judges that rule on copyright matters, is set to rule on changes to the royalty rates Pandora and other similar music streaming companies will pay record companies. The ruling will establish the rates to be paid for the next five years.

Royalties for playing music are Pandora’s single biggest expense. Last year, royalty payments amounted to 44 percent of the company’s revenue. The royalty rates are also the company’s biggest hurdle to profitability, as Pandora is not making any money under the existing rate structure. In the decade since its launch, Pandora has never had a profitable year.

Pandora wants to have the royalty rate lowered. Pandora is currently paying 14 cent per 100 times a song is played to its audience. Those representing the music industry want a significant increase in the rates. Record companies’ representatives are asking for an increase to 25 cents per 100 plays. The copyright judges have given no clear signals of how they might rule.

Internet radio companies like Pandora, which curate playlists of music tailored to the tastes of the listener, operate under a statutory licensing system under federal copyright law. Under the system, rates are set by the copyright board.This system has let Pandora develop at arm’s length from the music industry. On-demand services like Spotify, which let people choose specific songs to hear, must negotiate directly with the music industry on licensing.

Pandora has become one of the most popular digital music services in the world. The service currently has around 80 million regular users. However, the uncertainty around the rate litigation has long depressed its stock. Pandora was very aggressive with years of lobbying and behind-the-scenes battles over rate-setting procedures to prevent rates from rising, angering many in the music industry. The company will soon see if all that work has paid off.