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new version that included better song-blocking and “a lot of really pretty amazing things.”

The old Napster was still running as Patel digested the appeals court’s directive to modify her injunction. But in a sign of how dire things had become, Barry decided to try to give the stalled negotiations with the labels some electric-shock treatment. He called Rosen at the RIAA. “Hank said he had talked to Thomas [Middelhoff], and they really wanted to settle this thing. They were going to go to the companies. Then I got a call from a reporter who told us Barry had scheduled a press conference the next day,” Rosen said. She called Barry immediately, stunned that he would be so amateurish as to make a negotiating offer in public. “It was the only time in three years of dealing with this that I lost my temper,” Rosen said. “I really thought if they played it right they could have settled it. I spent an hour on the phone screaming at him from BMG’s offices in L.A. I said this was going to put them back another year. He told me I was wrong.”

The next day, over Napster strategist Ricki Seidman’s objections, Barry held his press conference in San Francisco, joined by Schmidt and Middelhoff. Before puzzled reporters, they announced that Napster was offering the labels $1 billion over five years, to come from subscription fees on the new service, whenever it was ready. Per label, that worked out to a very small increase in revenue—a few percentage points. Per song, it worked out to pennies. Given the history of bad blood between Barry and the labels, the offer was dead on arrival. “You claim you want to be legitimate and negotiate licenses based on real business models,” Rosen said in a statement. “Act accordingly. Stop the infringements. Stop the delay tactics in court, and redouble your efforts to build a legitimate system.” Richard Parsons, co-chief operating officer of AOL Time Warner, added this: “They need to shut down—then we can talk.” Even Barry later admitted that the press conference was a mistake.

Patel issued her revised injunction on March 6, 2001, and Napster was forced to begin blocking file names listed by the record companies. At first, it did so by each song’s name. It was an imperfect solution, and