The settlement ends one of the longest-running and fiercest copyright disputes of the Internet era, in which the entertainment industry spent millions suing Sharman Networks Ltd. It also will offer licensed entertainment for a price, and it agreed to pay more than $115 million in penalties to leading music and movie companies.

Settling lawsuits around the world, the company behind software called 'Kazaa' said Thursday it will redesign its pioneering file-sharing program to block customers who try to find and download copyrighted music and movies. Indeed, Kazaa representatives tell the Morning Herald that they think customers will be “intrigued to go back to a brand that they spent a lot of time on and lived with for so many years.WASHINGTON - One of the big guns of the Wild West days of freely downloading music and movies over the Internet is going straight. The strategy makes sense, considering that the peer-to-peer services have big name recognition among a demographic that may have aged slightly but certainly remains interested in music. Kazaa seems to be replicating Napster, which was relaunched as a music subscription service after its own legal troubles, and is now part of BestBuy. But, as Geg point out in his story, to turn on the option in Kazaa, you have to provide your social security number, something bound to spook users. This payment through phone company or ISP has been the discussed for years, as a way frinctionless way for users to pay for these online services. Update: points out that users have the option to pay for the service through their phone bill. They also get to download unlimited ringtones to one cell phone. For $19.98 a month, users can download unlimited music and play it on up to three PCs as long as they keep on paying up.

Kazaa’s website outlines how it will work. Kazaa will announce a digital-music subscription service Tuesday, according to a report in the Sydney Morning Herald. The company announced plans to go legit in some unspecified way three years ago when it settled its outstanding disputes with the music industry for more $100 million, but seems only now to be getting around to launching the effort full-force.

The latest peer-to-peer downloading service to try its hand at a legal music-subscription service: Kazaa. This story was written by Joseph Tartakoff.

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