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conference at the Century Plaza Hotel in Los Angeles, and he brought Richardson down to speak in a panel discussion. It turned into Napster's coming-out party, and it was a memorable experience. The panel had other digital firms on it but no one from the record companies. Richardson gave her music-discovery pitch: “We are working with baby bands, independent acts, and helping to build careers,” she said. When someone in the audience asked what contact Napster had had with the RIAA about copyright permissions, Richardson said she'd love to talk to them, that she was surprised the group wasn't on the panel with her. “Shouldn't we be talking here about how this new medium can change the face of music?” In a bit of theater, she added: Is there anyone in attendance from the RIAA? As it happened, there was, a low-level employee named Karen Allen, whom Cohen helpfully pointed out. “Come on up here, let's talk!” Richardson said. Allen was nervous at being put on the spot in front of an unfriendly crowd, and she came across as less open to dialogue than Richardson was. The vaudeville helped Richardson cast Napster as the innovator, dealing with a dinosaur that wouldn't be reasonable.

That wasn't a fair picture at all, since Richardson had been playing dumb with the RIAA. And Cohen soon would learn how incomplete the picture was. He set up a meeting between Napster and Samit for mid-December. Bales came down for the get-together on the top floor of the historic Capitol Records tower at Hollywood and Vine. So, Samit asked him, how does Napster work? What's the business model? “Lay something out for me,” Samit said. Bales explained that Napster didn't have a model yet—it was just letting people get music for free. “I explained that that was illegal,” Samit recalled. “He didn't have any clue.” Bales said he would get back to Samit once Napster worked out a business plan. He never did. “These guys were willing to discuss a deal, and Eileen didn't support any discussion with the labels at that time, so I had to drop the ball,” Bales said.

Bales tried another approach with a Bertelsmann contact. Tom Gieselmann, an investor with Bertelsmann's venture-capital arm in Santa Barbara, California, called Bales at home, saying he thought Napster had tremendous potential. He wanted to meet to discuss investing, and Bales knew Richardson would veto the idea. So Bales went to Fanning and Amram, who told him to go ahead. Gieselmann caught a plane and met

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