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RIAA's Rosen courts streaming companies

Streaming media companies are in a race to create sustainable businesses that deliver music over the Web, but they may need to be prepared for more than a sprint.

Streaming media companies may be in a race to create sustainable businesses that deliver music over the Web, but they must be prepared for more than a sprint, a top record industry lobbyist said Thursday.

Hilary Rosen, chief executive of the Recording Industry Association of America, said the music industry is eager to work with online music companies, rebutting long-standing gripes that record labels have been too slow to license top acts for the Web.

We're "ready--we're eager--to run by your side, matching our content with your technologies and, in some cases, your infrastructure. In fact, we already are," Rosen said at the Kagan Streaming Broadcast Summit, an industry gathering in New York. "In the last 18 to 24 months, we have signed licenses that will make it possible to bring more than 1 billion performances online legitimately."

Rosen's remarks came as a federal judge in San Francisco prepares to issue a preliminary injunction against Napster. The wildly popular music-swapping network has been blamed with stymieing the market for legitimate commercial online music services. Streaming companies forced to compete with a free alternative have been hit particularly hard with layoffs and closures as they search for revenue streams.

On Thursday, Rosen acknowledged that Napster took off partly because of the record industry's own inertia in embracing the Web.

"If there is a vacuum in the marketplace, it will be filled by pirates," she said. "Then no one makes any money, but a level of consumer expectation is developed that is hard to recapture."

Nevertheless, Rosen defended the industry's licensing practices, noting various deals with online partners including AOL Time Warner's America Online, Yahoo and lesser known Musicmusicmusic.com. She added that online music distribution has been waiting for legal safeguards to ensure intellectual property rights are properly protected.

Among the key steps in this direction was the recent creation of digital performance rights, Rosen said, arguing that the new rules for online royalties should help rather than hinder streaming companies.

"Protecting the rights of performers protects the incentive to record," she said. "It guarantees a steady stream of content for streaming media. And you can't have one without the other."