>> this is a really important question. what do you think of a one -- a run for president by governor barbara? -- governor barbour? >> that is one question too many. marshall thinks that is a bad question. >> i think it is a good idea. [laughter]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> coming up on "the communicators," interviews with the attendees of this year's digital media conference of northern virginia. later on "america and the courts" highlights from the confirmation hearings of judge sonia sotomayor or. >> technology expert walt mossberg on gadgets he will be using in the future. >> the northern virginia area of washington, d.c is a hub of

high-tech companies. recently a conference call the digital media conference was held there, where a lot of these companies got together to talk about some of the issues that they face in this current economic environment and about some of their new products. "the communicators" attended that conference and did several interviews with the participants. we want to show you some of those this week. first we talk with the organizer of the conference to will be was a broad overview of what it was about. then we spoke with best buy capital about some of the investments the company is making in some of the products you may see on your shelves in the coming months and years. we also spoke about some of the legislative and regulatory issues that companies face, and blip.tv about their business model and where they see their

growth. >> net german is with us. his -- he is that -- ned sherman is with us. >> what are these conferences that you put on, and why you put them on? >> there is a real need in the industry to focus on business models, legal issues, financing surrounding digital media. we are really a forum for bringing together to top executives in entertainment, media, and technology companies together and focus on industry issues as well as provide a forum for deal making. >> what kind of trends are you seeing in digital media? >> the most exciting thing we have seen is social media. social media has really taken off in the last three years. this year it has been fascinating. we have seen facebook overtake myspace.

it is the top trafficked social network. we have also seen the emergence of twitter, which hardly existed a year ago and is the third most traffic social media destination. >> how do you make money with twitter? >> that is the $1 million question. there's a lot of focus on that issue right now. we have seen facebook get into a little trouble with this issue, because they are trying to bring ads into that community, sir of ads, and in that process they are getting more aggressive with what they are doing with the data they are taking for all the community that uses facebook. we saw this just a couple of months ago when they attempted to change their terms of service. there was nothing short of a revolt on the part of users to those efforts. >> is it fair to say that craigslist is old media? >> good question. craigslist, the phenomenon has

been one of the most significant developments we have seen over the last five years. it is now a $100 million business, but it has destroyed the classified business at the newspapers used as support and life court of its business. i would not under state what craigslist has done by any means. >> here at this conference, are we seeing the status companies or start up companies? is there a trend in either direction? >> is a healthy mix. we are seeing established companies, big media coming here and trying to understand how they can tap into what has been successful on the part of start up companies in this space. there is no secret that a lot of the companies that have really been able to seize on the

opportunities in digital media have been disruptive to the media and have been able to do it in a leaner, meaner fashion. b. media is trying to figure out how they can profit in digital media. >> when you bring together these business folks, do you bring in the sec or legislators to talk about trends in congress also? >> on occasion we do. at this particular event, the focus is on business models. if you were in the room during some of the last sessions, there was a lot of discussion about what is going with the obama administration and what will be the big issues coming up in digital media from a policy standpoint. there are a lot of lawsuits out there that can change and make or break a company. these issues are central to business models.

ned sherman, thank you. you have probably been to your local best buy store, but you have probably not heard of best buy capital. cookie is here at that conference and he is the vice president of best buy capital, which is what? >> it is basically a small company that makes investments on behalf of best buy, generally in companies that are at the leading edge of technology. >> what kind of purchases are you making these days? >> anything that touches the consumer in technology are areas that we have interest in. we have made investments in companies like netflix, shutter fly, burgeon mobile, etc. >> why

would best buy buy an interest in netflix? >> these are minority investment decisions, so we do not control the company. part of the reason is because if you look at our business, it is dependent on technology it life cycles. the more we can encourage the adoption of new technologies, new services, the better it is for our core business. we feel we can execute on that from retell perspective. within the technology ecosystem, there is a lot of vested interest in place that does not necessarily want to see new things come into play earlier than they are ready for. we want to act as a catalyst in looking for new technologies that benefit consumers in a way that provides new value and provide us with an opportunity to create more value for them as well. >> what is a product we might see on the shelves of best buy

that you have invested in? >> it is difficult to get into the specifics of that, but i can give you an example where we made an investment in a voice- over ip related company. i can tell you that it is a very significant driver for that category for us today. netflix would be an older example of a company where we took a small investment position early on in the company and actually helped build that business to a substantial business which is public today. >> where is the growth in i.t. and electronics? >> it is not a business or an industry -- there are very few growth industries these days, but i would say we feel there are some opportunities as it relates to making things simpler. if you look a lot of the products and services that will

be coming out, we believe the emphasis will be on value and simplification of things. some of the voice-over ip type of products i just talked about are the focus of it. making things affordable and easy to use. we see an interesting opportunity as it relates to digital media. obviously there's a transition going on. how do you actually make money with all the different constituents within the ecosystem, and can we build a business model around that? >> we have talked to a lot of folks about mobile technology. is there a large growth there, in your view? >> if you look at the press, we have made a pretty bold statement in saying that we are going to substantially accelerate our mobile business. the real question therefore consumers, we will grow our business by selling more devices and services, but the real question is, how do you

accelerate that growth? there are some fundamental changes that may need to take place. as of right now, strictly my opinion here, the stranglehold within the carrier networks makes it very difficult for certain types of services, innovative services, new business models, to actually arise. we are hoping with the entry of the android platform and other people that are more internet aureate open to the -- enter into the mobile space, that that will begin to change. it is a difficult environment for smaller companies to make a difference. >> you are here in washington, the home of the regulators. what have you learned on this trip? >> i have learned that i am a fish out of water in the d.c. area. what's fascinating is the intersection of technology and public policy.

half the individuals i have met with have some history within the government or within the lobbying environment. that is a bit of a difference for me. it really showed me how public policy to a large extent has an impact in terms of industry. this was a conference where that was really open up to me. >> what is your background in the business world? >> i have a checkered background. i've been in various geographies and spent time both here on the east coast and i grew up in hawaii. i spent a lot of time in the bay area and overseas in correkorea. within the intersection of consumer and finance, technology and finance. >> is their growth and what you do here for best buy capital in

the u.s., or is it an international scene for you? >> technically we will look at investments everywhere. i would like to be more proactive, actually. the reality is, if you look at where the markets are going, there will be allowed growth outside the u.s. i will not say when or a global company, but we are more international. we have significant business in china. we acquired a company that is a multibillion-dollar company right now. we did a deal in europe where we have access to half of the retail warehouse business. my belief is that innovation happens everywhere. it is not just here in the united states. we would like to be more proactive. it is just a matter of resources, as you can imagine.

as executive vice president for nbc universal, rick cotton oversees the companies legislative and regulatory agenda. what is tops on your list right now? >> i would say looking at the emergence of the new digital distribution world, which is in everybody's focus at the moment, and thinking through the policy implications of that. in particular, we are committed as a major content company to utilizing the digital distribution capabilities, making content more and more available on the web through ip enabled and distribution and making sure that our content is not being stolen also on the web. that is the big challenge. >> is that part of why hulu came about? >> these agendas go hand in

glove. hulu is a leading example of how major content companies are looking to make content more easily accessible in a high quality and convenient manner to internet users. it has been enormously successful. has become the second most widely used video site on the web. it is certainly the most used in terms of professionally produced entertainment videos. it has generated a huge following. >> how does that prevent piracy, or how does it for your business model? >> it furthers the business model because consumers want to be able to access content when they want to. it is responding to those consumer demands. if we are to enable these new content access point for consumers, we cannot compete with free.

we cannot have our content being stolen on a widespread and epidemic basis on the web. what we have done is to become very active in working with business partners and with the government in terms of trying to ensure that we move to a world where technology since the internet users cues that certain access point such as pirate sites are inappropriate, but at the same time we are working very hard to provide them with easily accessible, legitimate sites like hulu. >> when you talk with the fcc and members of congress about that issue, do you feel that they have the tools necessary to keep up with the technology? >> you have to take a step back. of the last 20 years, in terms of physical counterfeit products as well as digital piracy on the

internet, we have seen simply an epidemic. the u.s. economy is driven by our technical invention and creativity. if we are to realize the economic benefits of that, which is our global competitive advantage, we have to protect our intellectual property, which is what drives all of those aspects of our competitiveness. congress has been very responsive in both the prior administration and the incoming administration. they both recognize that it is important for us as an economy to really pay attention to what preserves our global competitiveness. i think we have seen action by congress last fall in passing very significant intellectual property enforcement legislation, and i think the challenge will be to implement that, both in terms of looking at reducing counterfeiting on

the physical product side as well as piracy on the internet. >> is the piracy global? is it mostly in the u.s., or is it global? >> it is global. it is in the u.s. but also overseas. that is part of our competitive dilemma. we need to shake strong action here so that we are a model and an example of how to reduce both the counterfeiting and the illegal file sharing. what we have seen in recent months is france and great britain taking very strong public policy positions in terms of the need to reduce internet digital piracy. >> when it comes to a trade agreement, piracy concerns are taught for you. you other governments have the same tools worldwide that the u.s. may have? >> what we are seeing is that all of the government's globally to see their economies

as heavily dependent on technical invention, innovation, and creativity, are working very hard to understand both what technology tools and what policy tools are available to them. that becomes part of trade agreement discussions. it becomes part of law enforcement exchanges. i think we are seeing governments both in the u.s. and globally recognized that the scale of this problem has now gone so great across two dozen sectors of our global economy that strong action is necessary. >> you gave a keynote here at the digital media conference. you talked about cable companies everywhere. >> what you are seeing is companies recognizing that consumers want access to content through multiple ways, many of them on the internet.

they are not locked into old distribution systems. the announcement or the discussion that has been ongoing in terms of cable programming is how to cable subscribers access to their cable programming in multiple different ways? the most recent announcement is an indication that the cable networks and cable distributors are starting to think that through and are clearly committed to developing ways that their subscribers can access content multiple ways, including on the internet. >> do you support that? >> i think it is difficult not to be in favor of consumers having additional choices. i would say conceptually, each company is going to make this decision in terms of how it is implemented on its own. it is up to individual companies

to decide how to participate, but the goal of taking subscription cable programming and making it more widely available to cable subscribers, so that access is enhanced, is clearly a desirable thing. >> rick cotton is executive vice president and general counsel for nbc universal. >> what is blip tv? >> we hose, distribute, and monetize 46,000 original webb shows. is everything from a guy doing a woodworking show in his garage in minneapolis to michael eisner who is producing 68 high- quality original sitcoms and dramas every year. we are an open platform, but we

do 100% focus on shows. our platform is really cater to people who are creating original, essentially tv shows for the web, and billing of an audience for themselves within their own brand name. it is more like a tv show that a viral video. >> who would your competitors be? >> in terms of platforms that are focusing on shows, i guess maybe you could put hulu in that category. they are focused on professional content that is being produced by nbc, disney, or newscorp. >> we are focused on creating original shows for the web. youtube and liquor are at the bottom, and we are in the middle. -- youtube and flicker are at

the bottom. it is a way to distribute content throughout the web. >> would nbc2 be able to put 10 minutes of a program on your platform, or would a private citizen be able to contribute a music video? >> if nbc wanted to put a produced show like "the apprentice" on, would we except it? that is an interesting question. as long as they have the rights to the show, so an official in bc person has the rights to that punted, then our platform would accept it. it might raise alarms, and we would call them to make sure they had the rights and it really was nbc, but the platform would accept it. to the other question about a music video, if the person had the rights to the video, which

is incredibly important, the video and audio, then we would accept it. it would be cater to people who were uploading a series of music videos. if there is a rock star that once to highlight -- that wants to highlight a charity mission they are doing, or in building up a consistent audience over time, then we've been platform for it. we are all about shows, not about people doing one of videos. >> an amateur group wants to put together a weekly series that builds on a plot or two. is that the type of programming have? >> that is exactly right. is that type of content that we have 46,000 people creating. it has been amazing to see the quality and range of the content. we have fashions of who do we have shows about fashion,

sewing, surfing, gaming and everything you can imagine. we have shows that will reach a few million people. in that sense it is not like every show reaches 15 people. we have shows that might be called hits online. they have built up a steady and loyal audience, just like a television show would. >> how are you supported? >> we match individual shows with advertisers and then split the advertising revenue 50/50. our goal is to make money for ourselves, but to make money for content creators. >> where did you come up with this philosophy or the idea for this? >> we saw that text blogging back in 2005, that they were

starting to take off. a few were starting to do audio blogs. we thought that going from text to audio to video could be a natural progression. that is when we created this platform to serve people who are creating original content for the web. in terms of our vision, which is important along the two dimensions, one that we are very open and friendly in terms of rights to content creators, that they retain 100% of the rights to their content. they control where it is distributed. they choose to to syndicate to -- who to syndicate to, all the places we can let you syndicate content to. we let them be in control of that decision. that philosophy can for my co- founders to come from the idea of openness and doing the right

thing. the other philosophy that is important is the idea of distributing content everywhere, rather than just making people come to your destination site. that is just part of our egos. >> or your regulated by anybody? >> we are in washington d.c., aren't we? you do not need to remind me of that right now. it is an interesting position to be in. if someone of los -- we have content from war-torn areas of the world or troubled areas around the world. if you have contents that could be perceived as disturbing to some people, it is up to us to make that decision about whether this is something we want on our platform not. it is not up to the fcc.

we exist in an economy of plenty, not a scarcity, as the broadcast networks do. i believe we have made the right call with decisions about what videos are appropriate or not for our platform. there have been times when we have open it up to our audience and said that this was something of violence that took place in a war-torn region of the world that may or may not be appropriate. what do you think? we are open to comments and feedback from the audience as well. we may not always make the right call, but we certainly try to be thoughtful about it. >> where you see growth with blip.tv? >> there is an explosion of content that is being created right now that is high-quality content.

the quality is getting better and better, and just a range of content is almost mind boggling. you could pretty much name a subject and i would say we probably have one show there and more likely we have 50. in terms of the quality, when we started in 2005, our average video was summoned taking out a camera and filming their commute to work, which may have been interesting to their friends and family but was not that interesting unto itself. the fact that we now have a plethora of highly produced unscripted traumas and sitcoms that have producers and directors and hair and makeup people is amazing this early in the medium. the second huge area of growth is in advertising. for three years we were just pitching the medium of web video. now we get to pitch