European Parliament has approved a legislation which will facilitate online providers to get licences to stream music in more than one EU country.
The legislation is expected to support the development of online music services for consumers across the region as well as offer better protection to the artists' rights.
The new rules will help online music service providers in the EU to get licenses from collective management organisations representing authors' rights across borders and covering more than one country.
European commissioner for Internal Market and Services Michel Barnier said the directive will serve as a cornerstone of the digital single market.
"It will facilitate the entry of smaller innovative suppliers on the European market. It will also contribute to wider availability and better choice of offers of online music in Europe," Michel Barnier said.
"In addition, the new rules will foster and improve multi-territorial licensing by collective management organisations for online music services (such as music download services or streaming services).
"Going forward, it will be easier for those services to cover a multitude of territories and a large catalogue of music, which in turn will increase the offer available in the EU."
French parliamentarian who is in charge of the legislation Marielle Gallo said the directive will effectively protect the interests of European creators and make it possible for end users to have access to copyright-protected content throughout Europe.
"This directive is a clear signal that copyright can be easily adapted to the Internet. Copyright has an essential role to play in the digital economy," Gallo added.
Under the rules, all collective management organisations will have to see that the artists receive correct royalties and in time.