>> charliewelcome to the broadcast. tonigh ideas for the digital age. first olitico. it is the place go for new and politics. we talk to the edirs and the publisher. >> what you used t matter about you as a journalis is the way you work >> joe: i'm john harris of th washington postnd that's what maered what came afterour name. you needed the instutional platform in the web it does not matter amuch what matte is the dtinctive abilities ofhe reporters to recognize a good story, promote a good story and u the phrase often usedrive the conversation. >>here was talk for a long time about rolling your own newspaper and cliprom varus locaons into aertain degree that's already here, that'

called the internet. you simply go to the sitesou wish to go to. >> and ihought from day one that whatill definehe presidency the firstears is the big bg theory taking a crisisnd thinkin you cano big things and a lot of things simultaneous. it doesn't looat sound brilliant right no doing cap andrade and health care eform simultaneously. >> the place so watch is the white house the circle around thpresident and forei policy there are a feweoples whose names you haven't heard and dennis mcdonoughnd i think this is a tr of a l of adnistrations that policies being made in the whi ndn a>>u theditor and chief of wired

magazine who's new book is called "fre" >> there's ee as in freedom and no pce and the imagining what a book called "free" uld say and what the reality of the become ds say which is very much that not erything should be free or advertising will support everything but the underlying economics lows your cost to be in s low. >> charlie: politic and chris anderson, xt. funding has been provided by the following. çó

captioning sponsored by rose communication from our sos in new york city, this is charlie rose. >> charl: politico is a website and newspaper dicated vering all thing politics. during last year's historic presidenal campaign it emerg as a symbol ofhe changg face of media. today it has more reporters covering t white house tha an other news organization and you may haveeen and heardhe reporters on television d radio where ey make over100 appearance as a we. >> executiv etor of politico jim ndehei. good mning. yowore a jacket. >> once i leard there's a dress code an morning show i was hay to adhere to it. >> let's tk health care.

we got into it a lite bit in the last segment. nay pelosidrawing the ire of some democrats. >> the house came out with the billhat the cvo said does not t heah carecosts and adds to the deficit andancy pelosi is under a tremendous amou of pressurerom moderate and house democrat. >> chaie: joining me is robert allbritton and executive editor, jim vandehei a the senio politico correondent. this ian interesting show to mr. so i' start with the puisher. how does ts get started? >> it was a publication we intended to do sepately called capital leader whe w fst started underifferent managent. we alread start to hire a

staff for t publication and it became obvious to we were unsuccessfu unsuccessfulin finding good editornd we were not happy with the direcon it was taking and a distinctly waking uninhe middle of the night and turning to my wife and saying we need to make changg and need to make them now? >> charlie: what did she do? >> sheaid to goack to sleep. we srted to look arod and we encountered jim and john through mutual acquaintances and the idea clicked between us quickly. >> charlie: had you been think of do this leaving the post for an oonli job >> we were thinking where urnalism was going and saw she web transforminand people in traditional newspers are in a defensive ouch that wasn't how weanted to live our lives and

what's more as we were brain storming there was a he opportunity in the web tt that could be a goodhingnd as we were having brain storms we had no ability t pull the off a through gd luckor serendipity we m robe allbritton and thishole deal came together within few days. robert's ideas where media w heading nced perfectly to what we were thinking having an impact in the subjects weove ich isolitics and goverent and was one of those times i life where theey unlks rfectly within a couple days we decided to lea prett darn good jobs at the washingn post and neverlooked back and wre ving a blast. >> charlie: what was the mission? >> to dominatehe coverage of washington po washingto waington politics and like

espn. as peoe had a niche area we could have a bright future and we thought what if we put together theest reporters we knew and i came fromhe work journalnd waington post and john w at the post 20years. we word with everyone in washington and kw not all porters were created equal and ife could get ten or twelve of the bestnd somee that worked withs at time magazine and ben smith that were up and coming and expertise iresence and put them inne place and focus intensely on politics we were pretty confide we could move to the front of e line and startto dominate coverage of washington if we were cussed. >> charlie: it was politics not government or can you make that statemen >> i think to begin with it was mpaign because that wasthe huge story 2008. that's what i snt my time covering but people we coved on theampaign are now runghe cotry and the pocies and

government. >> at the time we put the whole thing together inbout three months becse we knewhere wod be intense intert in that campaign and knew you'd probably s hillary clinton, rudy guiliani and b barack ama anat that time we focussed moly on campaign and now it's a peri of governce and the politics a pernal dynamics and the gossip which makes it a fun blication and iortant. you need to be both. >> charl: where are you going? what's the gl now? >> we wantto dominate the space. if you care about politics and gornment in washington and i think as we continue to brain storm beyond wasngton we want toe the place. charlie: your competition i everybod the washington post, new york times,t's the wall street journal, washington po -- >>ome days it's someby on sunday it may be a blogger

working out of hi living room some whepulling on a good read or story and we wt in on that. >> charlie: w do you get in on that? >> the thi with the web and this is the big difference for somebody like me who grew u in an institution. what used to matter about you as a urnalist is the place you woed. i'm johnarris of t washington post and m of the new yo times. th's what matteredas wh ca after your name d the plform and in the web the platform does not matter as much. at matters is the distinctiv di ilities of the rorters to promote a go story and use the phrase the one i use,drive the conversation. en i was making hiring decisions at thewashington post i ran a blog a that's the kind of guy we would hi.

>> he ha't covered the governnt like i had. hadn't come fr the philadelphianquirer andhe traditional stf that used be importa to journalists as they try to work their way in the stitutions. what he did have and he was one the first people he hired was the ability to drive the convsation in new york. people who wer following politicsnd did youee what ben posted tay or we got to get this to ben or can' believe what's uin ben's column. he worked for the new yk observer but peoplweren't coming in into t new york obrver but tuning i to what ben wanted todo aren't m firm belief in thiseb era is jim said not allreporters are created equal some reporters drive in this arena and have pe hgs per

ceiveness. >> is there going to be one politico that's going to emerge a dominan dominant force onlin? >> i don't think so. the nare of the internet is to ha multiple fors out the. i thk it comesown to a matter oquality and the ality of the reporting and writing invoed and that's what differentiates ufrom other publications o there. there waa lot of talk for a long 250i78 of bei able to roll your own nspaper and clip om various location and to a ceain degree it's already here it'salled the internet. you go to the sit you want to go to so you'll be judgedy the quality of the repoing and writing of each invidual publication. >> and we're making a differen bet. e huffgton post trying to become a mass body and we think

e future i in having nhe sites. find t people who have the sa onniveness f politics a it turnsut it's ahuge audice and feed that and make sure yore better th your competition on this. i think there will always be a ton areas of competition and we've seen mo change in urnalism in the last o or threes thawe saw in the next 30 years before and in the next three years i ink we'll see more than the pa three years. it's an amazin period of transformation that l of us will look back on , 50 years from nownd say w. charlie: what's interesting to me and maybe thiis not portant, it is like this prram, you guys -- it' the depth of the rorting, the mediacy of t reportingnd not just the videolip that makes a difference >> ght. in some ways we have a luxury of

writing for thehighest common denominators and n thelowest and assuming you readers know as much as you know and that's incredib fun. >> >> give me a report card on the president. >>n the spring d late winter maybe as new presidents do but more dratically got what h wanted, ranhe ble, everything seemed to be goin well and that has worn off and thin have gotten hard and he's sweating, things are hardhe's had rebuffs at home andabroad. >> charlie: les stay wit alth care for example, do u thk he'soing get it done? >>ost think thers abetter than even chance he'll get it done and the demrats the hill ctrolling majoritynd nt to get it done. >> i very skeptical he'llet done and i thoug fromay one what will define this

presidency the first year or fit couple years will his so-called big bang theory of taking a crisis and knowing people are uneasy and thking you can a big thing and lots of things i' simultaneously and doesn't look to brilliant doing cap and trade and health care refo and the economy one thing at a time. congressas a hard time doing one thing well a efficieny and doing ree things when y ly have a cple months to do it i very difficult and he's tryi to do it now when you see the poll starting to shift and independts a modate democrats have numbers going up. >> you don't thi he'll gett and not by august 7th. >> i thi it will hard becaus members of congress will go home in augus and there wil be

millions of dollars target for those voters they' already uneasy with the hlth care plan before it gets degogued. imagine their retion when they come back in september, if th're rattled it will be difficult to get anying that resembles theplan he t out to get four or five mons ago. charlie: shoulde have delayed it and fixed the economy firs >> we live in th moment in the litico and we'll see it's brillit if he does it and i don't agreeith jim. with this congressional aritetic they canet something that's a victory even the detai have changed. democrats own the city for better or for worse ey own the city and we' find out if it's for better or for worse in

succeeding elections i think thereill be health care and i think, toe the big question hoverin over barack obama is what happens when democrats take back congre and 2008 huge majority ia historic presidential eleion and was that a reaction to sh or has this country fundamental changed and shift on his axis and we'r just aifferent idlogical country that's a much biggereliever in government and similar to europe our attitudes about the roll government and the private economy. guess i we have made that shift >> charlie: u think we made the sft to a roll of attitude. >> the very funmental way we'rnot living in a rgan or clinton a that in some ways oba is as far frolinton as he isrom reagan. >> wale save our arguments for

off-camera. there ar70 house democrat has it hold seats that bush won in 2004 i think would disagree and dot think the country has fundamentally shifted or think they want big deficitsor quick fast governmentaction. >> charlie: do y have a fundamental shift without bi deficits? >> the barometer are the conservative to moderate democrats because the conservaves won't work with obama and those 70eople are still saying the country has not shifte john could be ght. could besmarter. >> he's are legislators that could be boug. if y have something like a majority you can say y, texas represent you can still keep poting in your district and get the vo. i think they have a figing chan which is remarkable. >> charlie: wi 60 members a fighting chance. >> even but that's big step if

they do it charlie: give me a sse of this administration in tms of tensioand figing within. >> i look at from th point of ew of aocktail part as anything else an they tend to leave those things as anhing else. you ca imane how the staff etings are. >> charlie: when y got washington as the center really of the world, the financial world has mod from new york to washingtonnd all these majo questions have moved to washinon. we kind of like that as a washington newspaper that depends oneople for advertising trying t influence the washington debate >>harlie: who are you trying to reach? >> we're tryingo reach washington influentialsand shape policy and think we do a good job. >> charlie: ifou can nvince a bunch of add ver tidedvertise

online tread you arehe pele that make the decisions it. >> and we have if not the most one of the most infential people reading us and to our adrtisers -- >> crlie: number of tes of day? >> reactg to ourtories and understande're up in the rning and tryingto own the morning and iving a conversationf what peopl are coring on cable and at other nepapers and people wa to be -- it's not easy toreach ose people. theye busy and we offer the e st effective and efficient way to reach t audience and it works for us charlie: everybody talks about theontent and what's going to happen to content an newspapers a what do you thk? what's the mod for the future? >> i think the mos interesting ishe democrat in little rock and there's a paper down there where they gave away free

clsified advertise ich is effectively caed craigslt and those people out of the market and he does not allow free access to the websit yore a subscriberou get the website and paper. and it's kept that newspap in that market mh more t center of the conversatn of what's going on in the news and more relevant. charlie: are serious looking at that. >> therere lots of different models for the fute. for largeretropolitan newspape it's a more diicult process because there an incrible coststructure. manufacturing wspapers is a business pursuit as the a huge infrastructure t mntain in ple to physically deliver the hard py product on th ongoing sis. >> chaie: will the washington post survive?

>> the cnges wilbe painful to make bu whe they make them the end result will probably be more vibrant than tod. >> charlie: and they have to do what to survive and be more vibrant. >> they ve to decide the topics they own. the sear rock model with sports re and mens wear here is over. you i'm sure have a sight to politics i hope is us and sports, people establish indidualelations with the sites we decid to pu our chip in thearticular space. the post and any other meopolitan newspaper c't o multiplepaces they have to died what theye about and go deep and tt matters more i think, tha whether you're distributing news on print or on e-mail or mobile device. e point of the mter i do

u own editorl space and can you monitize . charlie: are you? >> yes. >> the first six months are defined if the wld can like you more and they hat george bush so anye could have ce innd the countes would have reacd better he's hdled hill self marvelously especially overseas undstanding the vaous auences. he hasn't been testedyet. he's got threegreat relationips what do you do with the whenush comes to shove an you need to stay in iraqonger can you ph them to keep troops there orhe criticism down low? what about when you need more troops routed to ghanistan because things get worse or stardown the iranian

governnt. i think he sets the stage to have more leveragehan george bush will have but wedon't know until e true test comes. >> charlie: and it m come obably whe? >> what's scary fr the world now it ca come from koreans and they're worried about afghantan and worried about how long t keep publi and most liberals in the house d not want to provi additional fundinfor ahanistan and this ar whenobama's flyg high and everybody wanted to give him what he wants boy does ts get harder this year and if things get as bad as everyone thinksit ll it will be harder to fun and do what he want is is a surge and have an aggrsive posture towards afghanistan. >> charlie: what's biden's role

in this government? this administrati? like any other vice president. >> like most. the office itsel has a shadow over it. and al vice presidents -- there's a tension built into . i think biden suffers that and all vice presidents have to -- al gor didnd he had a first-ratetaff and good relationship with mo of the press is a with clinto >> charlie: walter mondale. >> dick chey is thenly one who hasn't vying for access and influencand credibilit credibil the role that almost by definiti is held up to some ridicule. i think 's doing fine and i think it's real they makefun of him and condescend to him.

i've heard it myself. >> charlie: they do? >> yh, they do. but it doesn't mean they don't give him serious works. >> chaie: gaffs? >> neediness. >> charlie: needins? >> allice presidenthaveo vie for me. >> charlie: that's a new ter who are the emerging stars in the obama administration? >> in the administration -- i think it's true of man white uses but the place to watch is the white housthe cire ound the president and i think in foreign policy thers a small circle of people who's names you hav't nessarily heard, m donnalin and jf cdonough and i tnk it's ue

of alot of admistration has policies are being made in the white house and ople at the agcies andecretary clinton haveo work hard to get to bheard. >> crlie: what about geithner. >> he's ctainly survid and recoverewhich is -- after i ink they had entirely sought rough theact he hadn't ne television appeances before he waon the line and think he learneon the job b i think he certainly is a treasury seetary which was not absolutely car he would be a couple mons ago >> charlie: i ke hearing about rohm andis centrality and how the president leans o him more and mores a reliance factor that goes beyondhe role of chf of staff. >> it's stunnin move who wched dating backo the 1990, i think at one time he

s considered so aggressive and so angling and now you have recognize he's probly one of the most iluential cheifs of staffs in the hift of the modern presidcy because he has suc tremendous ergy and accounts. he handles the legislative account andlways central when they're cting the deal and handles to a rerkable dege thpress and media. >> charlie: hend axelrod. and the politic account. how are doing. what areur numbe dog. what's the lg termstrategy. >> charlie: is he cessible. >> one says that at your peril. sotimes i can't get him when i want him andometimes i get him i don't want him. >> charlie: have we passed the tiing point of thedominance

of online. >> i dot think so. >> that's what interesti abt suppord media, they're still superior to the dollars going into internet mediand when you look at companies like google and the search engines priting from it's rarkable there are sites like ours that are profitable off advertisingr dollars. we have no subscriptions. >> charlie: d what abo this person? >>ne interest thingbout her is e has emerged- i mean she's somebody peopleike it read about in americand not true of many congressional leaders. she's not just a washington figure she's real -- altugh i think he's proven more restant to caricatu and republican

attack, there's an attem to cast he as ts sort wacko, san francio character. >> chaie: and more baltimo democrat than san francisco democrat. her approvalratings are low or lower than dick cheney. >> crlie: it it means wt she has an approval ratedis s low? >> the republicans have not turned her into the democratic version of newt gingrich who's name was lied to any r&b republican democrat was trying to run agast but that's a problem when one of the fac of your party is as popular as dick cheney. the didn finish that popular at the end of the bush years. >> i'm power guy not popularityuy. she has power that newt girich woulhave killed for because she's stuff and disciplined and rules thatlace with iron

fist and has the chairman the wants and the positio sheants and gets whatshe wantsnd peop fear her and seem to reect her. she's totallyunpular especially wh republicans and with a lot of democts but she seems cfortableletting her own modere democrats te shots at her. >> charlie: theylike herore than they love her? but she couldn' get it de with merta. >> but got everything else. got waxman in the k position and knows how to maneuver and use e institution. >> charlie: what's the ce of competence. it's an understanding of h power works. if you look rom emanuel wh was he so successful? the undetand congress and the needs of members. why was tom delay effecte he understand the powerf fear and what members need. she learnethat and watched it and been in ldership and

becomes speaker and apies all of that and puts t other people who she knows have the same uerstandingnd passion around her and it's worked for her. >> charlie: whats the most interesting question you'd ke to see answered and what's the most interesng thing about president obama? >> most interesting thing from president obama from my point of view how he has transformed rac relations in the country simply by him being in office. i had somebody turn to me saying if this is the quality of the first african-american president in the united stat then race relations, whi they have a long way to go,have come further than th have too for there fob a level of harmony in e united states. question i would like answered, quitfrankly, when will this per wind up winning a pulitr

prize. the thing want to know i guess about the oma white house moly is you never really know how ese things work in real time. there was a myth about the bush white house and how darn confident were a dick cheney and rl rove and they loved it each and karen and kar were woing all the time and dick chey was doing what he wanted too. i would like to know how much of thats mythology and rlity and is axelrod e rove of this white hous does he have t broad portfoo and influence he has. >> the whole obama presidency i think dends on grth. pele are ready to have a much bigger role for government but no if it means low growth and huge deficits it will and that' an -- if the

onomy lags the whole thing drags that. >> chaie: people tell me insidehe white house those that talk to me th they understand. they have an awaness of the window and a awareness of the ri they face. >> but the don't really control asself-confident and poised as barack obamas. >> charlie: what do you thk the stake was giving too much power to congress to write legiation -- >>aybe small tactical mistakes but at we hav a huge sttegic gamble. we don't know if it was mistake. they went with aig bg they an it may be disasterous. >> charl: will they have another plan? >> i doubt it. the conservative democrats the people that won in 20 and 2008 by beatg republics from very coervative areas are not

enthusiastic about it. >> when you talk about the biggest mistake it mayçó tur ou to be the stimulu bill and a small percentage h been spent so f andf you look at e verage it's portrad as being spent inefficiently and one of the are rsons the pple are calling intouestion the health care an cap and trade and saying wait you asked to us rush in to do stimulus bill andow 'll have uneloyment over ten percent. >> crlie: his argument is it's necessarfor the sustnability of t ecomy. and the thing thattruck me on t campaign as the most interesting tng abouthim his tendency so big in response to a crisis and to broad enther than narrow e fid and i guess i think the intereing thing will be when he hits his first failure. right now he responds t that. >> charl: thank you all. pleasureo have you here. >> great being here.

>> charlie: chrinderson is here the editor--chief of wired magazine and has a ne ok called "free, the future of a radical price" saying businesses can make mone giving things aw, free. i'm pleased to he you back at this table. have you them up and arms. you just saw me do a show with them and he comes a guy who says have you give it away and ho for advertisin support and said that's not a easy as chris thinks. what don we understandbout what chris thinks? >> ee is the most minderstood four-tter word in the engli language. it has cnged in meaning from razors and blades and st

century, free as in freedom and fr as in no pri and then there's the imaging what a ok call free would say which is like erything should be free andhen what the reality the boo does say which is very much no that erything should be free or adversing will supporteverything but the underlyingeconomics of digit stf allows your cost to be so low that a tin fraction of your audience c get it. >> charlie: it's free for st bunot all. it's defineds not so much the pduct is free for all but free for you. google doesn't sw up on your cred card statement. we're awa of what they're enjoying now a there's a new model called freemium giving one percent your brownies as an

example. >> charlie: as a lost lead. >> you give out 99% of your productigitally for fre so think flicker or flicker pro or if you're a g-mail ur and want extra srage you'll pay for at. at's only possible with digil stuff and when you look at the arevcs saying i'm not going sup advertising supported business mel i agree but incasingly movingo freemium like maybe here's a free version and here'she pay version. thfree version is a great sample and if you convert to paid is because you used it a liked it and you'r loyal and the st form of advertising around. >> charlie: that's the premium. >> that is the way free -- the first ve of the internet was buila bigaudience,se the

low marginal cost and tow ads against it and the second we of the internewas we'regoing to hava new kind of add and it's mor effective and that's google and the third wave of t internet is builng a big audience tample product a upsell ten percentf them to the paid version and thas lik the video game world as it goe from a box y buyor fifty bucks to a free to pay line game tnk penguin or sond lifend then becomes free to y and you want a pet for your penguin, you want a hat, you nt to play on the cool glaer over there you have to pay. >>harlie: the premium model is the one going forwar >> theirst really new busins model it's n easy. have you to think of awo products a free and paid one and people a paying you money t

only a tenercent or twenty rcent. >> charliewhat's the conflict between you and malcolm that wrote the revi and you responded. >> i didn't respond onwire that would be abusingy position i respond in my own blog. malcm owners thatf the poster child of free i gooe in video form tt would be yoube his mind was if youtube was a bank it would qlify for tarp fuing. says free is a bubblendhe fact that xrou h youtube is t making mone is the ickens are ing to come he to roost and is is another bprime scenario waiti to happen. >> charlie: what es the think is goingo happen that youtub >> ultitely that businesses li youtube are not going to make money a the revenuesou can get maybe advertising. >> charlie: do you thi the

same for cebook? they're spending money to ha anher friend. >> malcolmays it's all a ponzi scheme and a bubb d that soon or later band width bills argoing to come in and the coanies will go bust and in adam's economyeverything gets more expsive every year and bits, erything gets cheape so whatever youtube ct it ll co half as much a year from w and half othat and never have we seen an i dus instrial economy get cheaper and what volume gets you is attenon and repution and the actual cost so you m lose mone this yea but won't lose mon next year. what malcolm doest underand

is google doesn't buy band width whole sale. they're buying dark fiber an printing plants. >> charlie: they go the world putting up these. >> thereosing a lot less than people think and i suspec theyl break even ytube this year and not only isot a bubble but as the advertising model lrns to find licenses the y videois on yoube we'lsee anconomic engin as powerful. >> charlie: the argumt is people don't wantto be next so so of the things that are on utube or next to somef the things on facebk. >>he beauty of text is that you have an infinite diversity of text an nrow ktting blogs and you can create itting ads and the ad a the content are perfectlmatched andelevant and when they're perfectly mahed, everyone's

happy. the ers -- it's contentnd the advertisers feel is fective. the probm with video isou can't ke as much video advertisers as the users can crea and y need a soering turial ad. we haven't figured i out the sml to small. the iernet is the first small to small medium and broadct was easy. big audiences, big ad. great for coke and cs. e internet allows the content to be broad or narrow. we figured out thebroad ads, we haven't figured outhe narw s when the do the televisn industry isgoing to restructure. >> charlie: how are newspars and prints gng to restructure >> would youhink we'd know the aner by now.

some print is dead and some i not. th question is does your print d value to the internet a th audienceants it n and not 1 hours from now and the prlems is there's nothing wrong with newaper news but the print anthe ink on your fingers and we're monetizing at at one-fifth and newspaper journalilyis being read more than before we likwhat they make. that's goo >>harlie: we like theroduct newspaps. >> we like the product and value journalism and don't kno how to arge for it. >> charl: so you're the new york times. >> they'lle fine. you know. >> charlie:ecause they have such an internationallassy brand that in the end if they can get it they'll pay for it becausit's that valuab.

that'she argument is i no >> the number ones in every sector will be fine. >> charlieand the question is how canhey come up with enou revenue to pay for exnses which made it auality product in the fst place. >> exaly. >> crlie: what's the answer. >> let's sayhecosts fall by halfs you move online > as you switch from printg paper toonline maybe half your costsoway but your revenues fall by four-fifths. ttle problem there. i think th wall strt journal and papersike themnd the new york times will be fine. not quite yet. the wall seet urnal has a good model where it's free versus freemium >> charl: you get some free and some you pay. ar't they prepared to do that

-- they had somethincalled select. >> the questio is not fre and pa of course it's the answer free and pay but what free and what's paid. the first te they said the comns wants to be free becau yowant to be in the conversation and if you'r not present if you're n easy t get to you'll loseour influence. your videos are free online for exact that reason. one reason is so t conversation -- >>harlie: i don't know who would pafor they will. >> it's imrtant for yo place as a puic intellectual. >> charlie: someone came know and said the other d you hav to fige out a way you'll do something about this markable archive and property you have and that's continuinthis stream not only continuing b

re rich than it's er been and you doomething lue-added that me it premium product whatever that is. >> there i for all of us. the aience wants free. we nee pai so what's the t r our penguin. so the question is t how do we go down inprice, how do we go up end pric so we're ired. weave three pricings, zero the website and 80 cent an iue anhe news stand. what's the otherversions. charlie: wha do you think it is? >> if you're radio head you're giving aw you're music for free and get you a bi dience in saming and the say so with

they will $100 vsion is the box set and then the vinyl and then the$350 vsion is the frt row seats at the concer the qution is foredia so you can stick to some of your contenand maybe the new york times ca charor theiphon iphone app. >> charlie: do you thinkhat will be enough? >> no. >> charlie: so there is a weakss in the argument right there? >> well, weon't have the answers ye we know free is here to stay. we have not figured out -- we demonetized one industry. >> charlie: e answer we go free and i don't have an answer th a revenue stream to allow you to survive. that's where you are >> we figured out free is here sta and very to place the revees we lost th somethi else and erything business has

to figure it o differently. google answered that and makes lots of money. >> charlie: sellg information for advertising. >> that's a goodanswer. i suspect facebo will answer in the next year or two? >> charliehow do you spect? >> with better ads and twiter will do that with premium service d t wall street jonal seems to have answered itretty well already and new yorkime timesot yet. and evyone has to figure out who their pet for the pengn is. >> charlie: i'm not sur the wall street journal cou survive based the revue they get. >> among newspapers whs figured it out? >> crlie: anybody. ogives away their product. >> soware companies. that's anoth businesshat up e physical box ands it moves

online they're with the service with 2.0 companies. once upon a time come april 15th you go and buy the produc turbo tax and now is online and you go t turbo x.com and it now free, howev, once you'vetyped all your information an it's likeh, i live in the state. state's not free. state's the pet fo the penguin. >> charlie: what ifomeone says federal and state fe so go with me rather than tur rather . >>eople will race you to the bottom and if you have more compl colicated text you keep segmenting the audience and fin

pele price insensitive an when i ty're inhey tick. >> charl: what's importanto me is th argument for free. wal-mart did. they were ableo offer for good quality product things tha mosteople wanted at a cheer price, a, because volume, buying power, b, because of efficienis an of inventory and w to sell things and what happened is people poured in see them. price as aays been a indicator of demand or has it not? >> price i teific because 's signaling. ice tells you what people value. take softwareoff the table, how loyal are they. twitter has they of the same question, how loyal e customers. >> charlie: as long as quality is there this is not talng about buying something that the product is not as good.

andyou chief efficiency and other things. >> that's all these clhes and scale. ke you get wha you pay for. sometis thks to obalization, china or whatever,you can get higher quality at a lor price and there's a great example of how stupid w are about price. fr is about psychology. not about price becae the price is zero. >> charl: is this a me imrtant lesson for the book? >> free is bigger theme. theme predates thpredates the i it's ubiquitous. i think everyindustry will hav to have a strategy an it's not neat. it's messy. we're midway.

>> crlie: there are a lot of unanswed questions which freely suggest you don't know what the answer will be. >> because the inteet is flashry we'll demoneti end industries beforwe fix them. what we're seeing in the newspaper instry is just the beginning. we'll go through this on televion and it may go through this as products bome stware and switching from physical goods to online things it becomes inevitable and it will yore competing about free or using it and the consequence i eirst wave that you nuke the busine. looks li no one's making money or get a wner take alln the case of google and then over time or craigslist has done to the newspaper industry for every lue they take out of the newspaper dustry it keeps making one million.

the rest where does it go? porized. it will t worse before it gets beer. it's not my oice o ideology. it's just an is free has been around t years and it's growing and what the internet enables. the questi is notree or n free but how do w find business mol models to make ney. >> charlie: eric schmitt said with the cost of distributio driving ward zero he's driving toward thenext big thing. >> the two most dangerous keys on the keyboard, control, d. >> charlie: this is true. people have to be careful. >> we're in a cut and paste era. just screwed up. i think you should site

kipedia. it's not uniform in quality but some of thenntries are the best around and i messedp t attributions but it's all fixed. the gital formy the way e book is free online anthe digital formare -- >> charlie: you go to the your weite or how do you get the book free? >> it's fr on th kindle or ipho ap and skrib. >> charliethe book is "free, the future of a radal price" a questions remain about how itill play out. it's a critical idea people a trying to findheir way out of. thank you. ank you for joining us. see you next time.

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