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Napster will surrender a bribe of $1 billion to record labels, songwriters and independent artists in exchange for being permitted to continue drawing breath, the company announced Tuesday. The money is to be paid over five years, even if subscription revenues fail to account for it all.

"Major labels will receive $150 million per year for a non-exclusive license, divided according to files transferred. For example if the transfers were evenly divided among five major labels, each would receive $30 million. $50 million per year will be set aside for independent labels and artists to be paid out based on the volume of transfers," the company explains.

Napster expects to pay for all this generosity with a subscription scheme which includes a "Basic Membership" plan with a price of $2.95 to $4.95 per month and monthly file transfer limits, and a "Premium Membership" plan costing between $5.95 and $9.95 per month with unlimited file transfers.

Recording Industry Association of America CEO Hilary Rosen was not impressed, and criticized Napster for "trying to engage in business negotiations through the media."

"Do you really think artists should have to continue to give away their songs on your illegal system until you are ready to convert it to a legal system?" she taunted.

Napster recently announced plans to incorporate copy protection into its P2P technology, as we reported here, and now it's offering to be shaken down by the companies it had lately sought to battle in court.

Clearly, since the Ninth Circuit US Court of Appeals all but ensured that the temporary injunction ordered by the district court will soon be enforced, the company has lost confidence in its own case, and has decided to begin throwing money at the enemy rather than its lawyers. ®

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