In a press conference held on Tuesday, the popular music-sharing internet site Napster announced that it will stop offering free service by the summer, moving instead to a fee-based pricing plan.

Napster also offered to pay $1 billion over the next five years to major record labels, songwriters, and independent artists to settle claims of copyright infringement.

Napster's proposal for a new business model involves a two-tiered pricing plan. Users would choose between a premium membership plan, which would cost $5.95 to $9.95 per month and offer unlimited file transfers, and a basic plan, which would place a cap on file transfers and would cost an estimated $2.95 to $4.95 per month.

The announcement comes on the heels of the blow Napster suffered last week in the Ninth Circuit Court of Appeals. The Court's opinion stated that Napster aids its users in infringing upon the rights of artists and producers.

A statement released yesterday on the Napster website explained the shift in policy.

"Now that the [recording] industry has the legal precedent they were seeking, it is time to reach an agreement. If the industry has the consumer and their own bottom line in mind, there is an agreement to be had here."

However, Hillary Rosen, CEO of the Recording Industry Association of America (RIAA), has yet to respond to Napster's latest move.

Before the press conference, Rosen called on the management of Napster to "stop the infringements, stop the delay tactics in court, and redouble your efforts to build a legitimate system."

"Our member company plaintiffs have always said that they stand ready and willing to meet individually with you to discuss future licenses," Rosen said.

It is not clear if Napster's efforts will be sufficient to convince the record label plaintiffs to drop their lawsuit.

Under Tuesday's proposal, five major labels would each receive an annual share of $150 million determined by the portion of total Napster traffic attributable to their works. $50 million a year would be similarly set aside to be distributed among independent music companies and artists.

The reaction from Harvard students to the Napster proposal is mixed.

"It's the right thing to do," said Brad W. Rodriguez '04. "It's not fun, but it's understandable."

But some doubt that even altering Napster will solve the problem of copyright infringement via file-sharing Internet programs.

"Even if [Napster] shuts down, there will always be other places to download music," said Ben G. Hanley '02.

What is clear is that the era of unchecked file-sharing is coming to an end.

"I knew it was too good to be true," Hanley said.