In another lawsuit, MP3.com has agreed to pay publishers 10 cents to copy a song to its database, plus a quarter of a cent each time a song is streamed.
The streaming feud is problematic for the big labels anxious to launch subscription services like MusicNet — a joint venture between RealNetworks and AOL Time Warner Inc., parent of Warner Music Group; Bertelsmann AG, owner of BMG; and EMI Group Plc.
Days after MusicNet was announced in early April, Universal and Sony — which had previously announced the formation of a similar service called Duet — said they had struck a deal with Yahoo! Inc. to offer subscription services.
Industry insiders have eagerly awaited subscription services as secure alternatives to Napster, which has seen usage decline as it struggles to comply with a court order barring the trade of copyrighted songs on its service.
The licensing dispute is also critical for webcasters, or online entertainment distributors. Webcasters have claimed that treating streams as reproductions would put undue burdens on the smaller players struggling to survive in this sector.
Reuters contributed to this report.