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Pandora co-founder: Royalties win is important, but ...

Online music streaming company Pandora scored a big legal victory, but "this is only a blip on the radar," co-founder Tim Westergren said Tuesday.

"We're looking much further down the horizon," Westergren said on CNBC's "Squawk Alley."

On Monday, the U.S. Copyright Office said that a royalty payment rate agreement between Pandora and Merlin Network—a global rights agency for independent musicians—was a valid benchmark in determining what the legal rate should ultimately be for Internet radio play.

The Copyright Royalty Board, a three-judge panel working on setting a final rate royalties for Internet radio, is expected to make decide the issue in December.

Monday's announcement was considered favorable for Pandora—as the agreed to royalty rate of $0.0013 per stream could make the company profitable. The ruling sent Pandora's stock surging, rising as much as 14.7 percent before closing 5.74 percent higher at $20.83 per share. On Tuesday afternoon, its share price was down nearly 1 percent.

Westergren said he was not surprised by Monday's decision. "This panel of judges is looking to be very thoughtful and deliberate about it and I think we're all very confident that there'll be a rational outcome," he said.

He also discussed the impact Apple Music has had on Pandora's business, saying it has been "very little," thanks in large part to the amount of data the streaming company has received from users.

"We've gotten 60 billion-plus pieces of thumb feedback that have created this engine that is just uncannily good at selecting the right music for the right person," he said.

Apple Music launched on June 30.

—Reuters contributed to this report.