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Bales in the Mandarin Oriental hotel lobby in San Francisco. Gieselmann promised to introduce Napster to Bertelsmann CEO Thomas Middelhoff and others, and he began quizzing Bales about Napster’s closely guarded usage and file-swapping numbers. “I had to give him something to make sure he stayed interested,” Bales said. Gieselmann turned over an envelope and started doing the math. His face turned pale. “He was like a ghost,” Bales recalled. “You guys are destroying the record industry,” Gieselmann told him. “You’ve distributed more music than the whole record industry has since it came into existence.” When Bales reported the conversation, Fanning told him to cut off further contact.

Cohen stayed in touch with Napster and coached the company for another few months. On his last visit to the office in early 2000, he saw whiteboards filled with legal arguments to deflect questions about the theft of music. “It just became apparent to me that their message was not to settle,” Cohen said. In April he gave up trying to convince Napster to negotiate and took the job under Samit. “I still think Napster is the coolest thing I’ve ever seen,” he said nearly two years later. “Had we been able to work it out, it would have grown the music market. But it just got so acrimonious. It’s hard to negotiate with people who are publicly saying they are going to beat you. And the rhetoric from the labels has been just as intense.”

Samit and Cohen were among the first record executives to get a close-up view of how Napster worked and the foolhardy executives in charge of it. Other label people had to be educated by the RIAA. Napster turned up on the RIAA’s radar in the late summer of 1999, flagged by the trade group’s Internet-piracy specialists. That team, which hadn’t been in existence for very long itself, found Napster during routine searches for MP3s in chat rooms and on Internet Relay Chat channels. Some music trading was going on all the time, and the RIAA didn’t have anywhere near the resources to stop it all. Instead, staffers were trained to dig a little more deeply. Who owned the site, and what kind of resources could they put behind it? How large was the repertoire? How many users did it have? And how easy was it to get a song quickly? “If it takes thirty minutes to get a song, I’m less concerned,” said Frank Creighton, the RIAA’s

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