Even with a streaming market that’s actually been made more robust by the pandemic, SiriusXM plans to write down the value of its Pandora streaming service by around $1 billion, down 40% from the $3.5 billion price it paid for the company at the close of the acquisition in February of 2019, as noted by Billboard.

The company cited the streamer’s “royalty cost structure” as the cause in a press release that led with good news about SiriusXM meeting or exceeding its guidance for 2020 and adding more than 900,000 self-pay subscribers. The company’s new CEO, Jennifer Witz, said on Thursday that anticipated increases in royalty costs will have “a meaningful impact on Pandora’s profitability,” which will place the streamer in an even more challenging position against the giants Spotify, Apple Music and Amazon.

The Copyright Royalty Board is currently determining the per-play royalty rates for Internet radio services from this month through 2025, which, if increased, could further impact Pandora’s bottom line. Pandora’s dip in advertising revenue in 2020’s third quarter (from $85.33 to $84.46 per thousand hours) didn’t help matters.

The pairing seemed ideal at the time of the acquisition. Witz’s predecessor, Jim Meyer, said, “This is a tremendous outcome for two organizations with complementary platforms and large audiences, and we could not be more excited to be moving forward as one company. With SiriusXM’s subscription-based national service of curated and exclusive content and programming, and Pandora, the largest U.S. streaming music provider with its highly personalized free ad-supported service, under one roof, SiriusXM now reaches more than 100 million people across its audio products.” However, the companies have not kept pace with the changes in listening habits, which have moved toward streaming services’ playlists and shorter-attention-span platforms like TikTok than more traditional radio habits.

Elsewhere in the announcement, SiriusXM’s 2021 guidance includes self-pay net subscriber additions of approximately 800,000, total revenue of approximately $8.35 billion, a djusted EBITDA of approximately $2.575 billion, and free cash flow of approximately $1.6 billion. The company also extended Howart Stern’s contract for five years.

“I’m pleased to have assumed the role as SiriusXM’s CEO this month and even more pleased with the results we posted for 2020, which provide us strong momentum as we chart the course for the year ahead,” Witz said in a statement. “These results highlight the resiliency of our business and the loyalty of our customer base even amid the unprecedented challenges of the past year.  Most of all, I’m proud of our dedicated employees for navigating the challenges of remote work, staying healthy, and taking care of their families while never losing sight of our business goals.”

SiriusXM plans to release full-year and fourth quarter 2020 financial and operating results on February 2.