filibuster on our own. there are not enough of us. none of us are talking about filibusters'. it is all in response to questions from the media. we are not proposing this. as you point out, it would be difficult to pull off unless the democrats joined in. >> sunday at 10:00 a.m. eastern here on c-span. >> at this week on "the communicators," a discussion on digital media and how it affects the publishing industry. >> this week on "the communicators," the president of the digital media investments. joining in the questioning is greg piper. could you start off by giving us

a brief snapshot of your company. >> it is a major media company based in germany. our key divisions are in television and television production. we are the largest broadcaster in europe. we are very active in the magazine field and we are the largest magazine producer in europe. we have a very large service company. it provides all kinds of media services for reproductions of dvd's to the printing of books and electronic payment services like google and microsoft and others. in the united states, we have random house which is the world's largest consumer book publisher and we have a number

of other printing concerns here in the u.s.. we are also a producer of "american idol." >> and you are for vice- president of random house. -- you are former vice president of random house. what do you look for in the president? >> it looks for mostly early stage investments. to give you an example, from the publishing side, some years ago, we pioneered the digital downloading of audio books so that people could enjoy them in devices that played things like in the three imp3s.

we are the largest audio book producer in north america. it gave us an idea of how to do this in the digital realm. at the same thing applies in broadcast television. we tried to pick a show the way forward for some of our core businesses. there is a distribution relationship. in any case that will show something about how these markets will develop.

the same thing is true with amazon. people are getting comfortable reading full books on screen. this kind of behavior is certainly fascinating and how it is mapping the changes in our culture over all, but it is also fairly concerning. as things switch to digital, there is the danger of that a

lot of value can leak out of the industry. we will not have enough revenues to pay for our own infrastructure. in the recorded music industry, it has declined quite precipitously. it created a market that was smaller than the former market. the same thing is true in the newspaper business. when you look at where these papers are today, based on where they were five or 10 years ago, the revenue model is under serious threat.

in many cases, they have consumed it already. it has not figured out the right revenue model yet. it is succumbing to this economic circumstance. what we are trying to do is make sure they do not suffer that same fate. we were in the business and had a first row ringside seat. >> isn't there an entire generation of folks growing up expecting free music?

>> that has led to a self reinforcing behavior were the industry could not adapt because you cannot compete with free. in other industries, it is not yet decided. in the book industry, we find an enormous number of people that are interested in buying books legitimately and reading them on their kendall device. we do not necessarily see that industry transforming into a piracy oriented atmosphere that we see in the music space. in television, the model is not yet broken at all. we still have a robust broadcast

television atmosphere. although it is not at its highest, it is still an enormous business. it is not clear whether other brands will become more prevalent or simply walk along with the core broadcast business over time. i think there is an expectation that television will be free, but if you look at the cable penetration in north america, you can see that 80% of households pay a fair amount per month for their television. there are different models that you can apply. one of which is that you pay each time you want to watch something or read something or you pay each time you want to listen to something. or you can pay and all you can eat, the payment per month that you watch as much as you want.

>> why is that? >> the book has some special characteristics. the first is that the cohort, the audience that consumes books is perhaps as broad as in the as you can find. it goes from ages 0 to age 99. the light different kinds of books, religious books, nonfiction, self-help, literary, mass market, it is a huge variety. that spectrum that we have in publishing also means that it is slower to change radically as the music industry did. the audience changed very rapidly and they could reinforce themselves without audience more easily.

the second reason that books are different, and this is not a subtle reason, the reading of books on devices is want to be a slow transition over many years. it has not even started in other countries. that is because there are a lot of devices that cause eyestrain that is more significant than a normal page. many reading devices have very low eyestrain but not the same kind of contrast, so you need decent like to read it in. people like to have books. it is a very sticky medium. you have seen it this way since the 15th or 16th centuries.

there are a lot of psychological reasons for that. i find books are the intellectual for richer of your life. when you move, you move with that intellectual bircher. when you read something great, you wanted to be an heirloom product. with digital media, it is more difficult for that to be true. you cannot be proud of a book shelf of that is a memory stick. i do think that we will need a very long hybrid. were there will be an awful lot of reading electronically and a lot of reading in print. the difficulty for the book publishing industry is that we have to support both simultaneously. that can get expensive. >> is the risk of the book industry turning to the music industry and becoming reliant on a single provider?

the music industry has tried to create alternatives to it by tunes. go they become dominant players and put terms on you that you will not be comfortable with? >> it is a fair question. we are in a difference a chelation from where the music industry is. -- we are in a different situation from where the music industry is. we also see a number of other strong players as current competitive players. such as, we can start with sony. then you go to apple, and with the iphone, people are starting

to read on that medium. i think you'll see enormous numbers of other cell phones over time become reading devices as they have in korea and japan. i have not done yet. -- i am not done yet. some companies may see this as a vibrant enough market. we have one other thing that is important. in music, there was standardized pricing for a long time. when you guys were buying kelpies, or when you were buying cds, they tended to have a very narrow band of price and -- buying records, or when you're buying cds, they tended to have a very narrow band of pricing. when i tunes came out with a 99

cent price point for a single track, that became quite standardized. we do not have a history of that. if you look at a hard-cover, it might be $25 and a paperback may be $14 and a children's parbooky be $5. you have a pricing that is truly all over the map. we might have some condensation uprising but we do not see the uniform tity of pricing. we will not be locked in by a single competitor as the news industry has been. >> you were speaking at a summit and you said you had seen consolidation of a price point of $10 for books that come through kendall. will consumers not get used to

that? how much control to you have and what kind of expectations are you trying to build? >> that is a fair question. when i mentioned that, i think that the coalesce and price is an average price. you can see that amazon is pricing almost every best seller at $9.99. there are a large variety of titles that are priced above $9.99. honestly, if you are selling a math book at 600 pages, that is not a $9 book. it never will be, digitally or in print.

if we are doing it 192 page romance, that may not be a $9 book either. it may go the other way. there is enough difference in the content. these are not like songs that are just one link. -- one liength. i think we're in a place where it is not going to be a single price point for the publishing industry. i do not feel that. i support, to some extent, consumers understand what the prices are -- understanding what the prices are. i would hate to have everything priced at $30 and have people think that they are not willing to pay that and then they would find out an illegal way to get it for free.

we have to establish consumer behavior that is legitimate. like all media, the book industry and the television industry and the music industry has already have this. you have to really bad outcomes on either side and you try to navigate through that. everything is born to be free and there is no industry left. on this side, your pricing too high. you have to have enough revenue volume to maintain your industry, so you cannot price too low because did you have no industry left in there is no money for the creators and they stop creating -- and there is no money left for the creators and they stop creating. over time, the music industry has come back.

i hope the music industry gets it right from the beginning. i hope they can navigate this fairly well as well because the outcome is a negative outcome if we get it wrong. if there is really no economics in these creative content industries, there are going to be no industries. that means thethat they will not find this to be an attractive industry to participate in. we really need to make sure that consumers understand the value of contents and do not expect it to be free. they're comfortable with purchase mechanisms by have value to them and i would submit that these are examples of that. there are other examples in the music business.

>> is the google book settlement a way to navigate between piracy and the high prices? >> i believe it is. with the google settlement which is a settlement between the authors represented by the authors guild and the publishing industry and google itself and bindi libraries from where google copy of these materials. it is an important settlement as a precedent for media market. it does allow for a brand new market to come out of nowhere for the content creators and for google. in other words, they were engaging in a behavior that we thought was illegal. they were copying books and libraries and then they were taking those copies taking

pieces of them and then giving copies back to the libraries. all of this copying is exactly what copyright is about. you cannot do this without the permission of the altar. there was a lawsuit that was a class-action. we joined in that and to gather week sat around a table. this was not quick. this took years. how can we take this situation, which would end badly for all of us. if google had won, what it would have been able to do is to take all of these books, copy them, give copies back to the library's and then serve out pieces to the public to show what pieces of these books were to the public so that you could search and find little pieces of your books. that is all they would be able to do. we viewed that as unlikely because we thought we had the

better of the argument. that would not be able to make these copies and make them available for the public. that is a loss for us. what these guys were digitizing and what they have digitized are many books that are out of print and essentially inaccessible to the public and in accessible to researchers and universities. police, for the united states, and -- at least, for the united states, we would have a new life in our culture and our society where once it is digitized, you would have access to these as a consumer and browse them and see if your interested in buying them and then you could purchase them electronically. in the case of institutions, you could get a subscription to all

these works so that your students and faculty could have the world's greatest library. it would be available to their students and faculty is, not just by going to the library and taking a physical copy out, but in their dorm rooms and in their offices. it would be an absolute revolution of scholarship. it would be a really big change for american educational institutions to have that capacity. a married to that, we would create an economic model so that it would be available by subscription to these universities. all of the creators of that content would be compensated for these subscriptions that the institutions would be engaged in providing for their audiences. that is a brand new market for us. >> there have been serious

antitrust concerns about google's role in all this and this may actually tied up a settlement. it might be rejected by the justice department. were these conditions avoidable? there were things that were precluded by law because they did not have the exemption that google had. >> this exemption applies only to works whose owners cannot be found. in the works that are claimed, of those works can be licensed by any competitor that wants to provide the same service. when it comes to the works that are never claimed by anyone, the class action mechanism gives google the capacity to do certain things with those works that would be difficult to

replicate. however, we think that is quite temporary and not particularly meaningful. let me explain. these books that we're talking about, there is a concern that google would have a monopoly on these works. these works are a nnot possibleo be exploited. in order to harm google servicing these works is a societal good and it is good for the rights holders. that is who we're trying to service. the settlement provides that. the second reason it is not exported is because the author

wrote a long time ago and there were payments being made. you'll have fewer and fewer of these orphan works overtime because there is a mechanism for payment. at the last thing is that they will be reviewing legislation so that they can have the same kinds of licenses, legally without the class-action mechanism. we could not do that as we see it today. with the legislative action, it could be very easy to do. >> why did you say this deal would be limited to the u.s.? >> because this is a u.s. lawsuit. the only use would be in the west. outside the u.s., none of these files would be usable by anyone,

including google. >> let me ask you about the two different approaches that have emerged in the print world. you have several organizations who have tried to get advertising to share some of the revenue that is being generated by the unauthorized use of their articles. on the other side, you have the associated press, which is taking much more of the recording industry style campaign to actually go after and try to prosecute some of these places that are running their articles without permission. do you see any of those approaches -- is there a history of this being very pro- active? have they tried to cooperate pirates service? >> it is a complicated issue

and. there can be a kind of a forced sharing of our advertising revenues from sites better not legitimately paying anyone. that is an enforcement regime that is pretty hard to figure out. i am not sure that it is desirable. the more desirable way to go is with the internet. france is saying that there is no god-given right that anyone has to use the internet exactly as they used -- wish to use it. there are certainly possibilities as far as the nature of the internet.

>> unfortunately, we have to leave it there. thank you very much. thank you for joining us on "the communicators." your name is a name that is known in communications. why do we know that name? >> my grandfather's brother was head of rca. he was part of the development of radio and television. that is why the name as someone familiar. as we can now see, television.

it worked for many decades. thank you. >> how is he spent funded? >> advertising or products. >> public money, i am sure. >> how does he spend funded? 30 years ago, but they created c-span as a public service. no government mandate, no government money. ♪