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The record industry sued one of the most popular sites for converting YouTube music videos into permanent audio files, a fast-growing form of music piracy known as stream ripping.

Labels owned by the three major music companies—Vivendi SA's Universal Music Group, Sony Corp.'s Sony Music Entertainment and Access Industries' Warner Music Group—sued the German operator of the site YouTube-mp3.org in a federal court in Los Angeles Monday for alleged copyright infringement. The labels are seeking damages from the German company, PMD Technologie UG, and its owner, Philip Matesanz, that include $150,000 for each alleged infringed-upon song or sound recording.

The defendants couldn't immediately be reached for comment.

YouTube-mp3.org has tens of millions of users and accounts for about 40% of the world's stream-ripping activity, according to the suit. Users are prompted to enter a link to a YouTube video and can click a button to remove any ads and create an audio file.

"This site is raking in millions on the backs of artists, songwriters and labels," said the Recording Industry Association of America's president, Cary Sherman, in a statement.

Though stream ripping violates YouTube's terms of service and parent company Alphabet Inc. says it has worked to demote such platforms in search results and remove them from its Android app store, the practice has nonetheless become increasingly popular lately as music-streaming services have grown.

Record companies have licensing agreements with YouTube that permit it to stream much of their music to users in exchange for a cut of associated advertising revenue. But the agreements don't allow YouTube to offer the kind of permanent, ad-free downloads that stream-ripping sites help users create. While streams can be ripped from other music services and sites as well, YouTube's free site is the most popular source given its sheer scale, with more than 1 billion monthly users.

The music industry worries that fans who stream-rip have little reason to buy the songs or sign up for subscription music services on which it's become increasingly dependent such as Spotify AB and Apple Inc.'s Apple Music, which charge $10 a month for unlimited ad-free, offline listening. Streaming services generated $1.6 billion for record labels in the U.S. alone in the first six months of 2016—amounting to about half of their domestic revenue. Record companies' revenues are down 60% from 2000, despite nascent growth in recent years.

Write to Hannah Karp at hannah.karp@wsj.com

(END) Dow Jones Newswires

September 26, 2016 15:45 ET (19:45 GMT)

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