>> charl: welcome to the broadcast. tonit ideas for t digital age. first politico. it is the placeto go for ns and politics. we talk to the etors and the publishe >> what you usedo matter about you as a journalt is the way you work >> joe: i'm john harris of e washington post and that's what ttered what came after your name. you needed the ititutional platform in the web it does no matters mu. what matrs is theistinctive abilities the reporters to recognize a good stor promote a good story andse the phrase i often use drive the conversation. there was talk for long time about rolling your own newspaper and cl from vious lotions into a certain degree that's alreadyhere, thas called the internet.

you simply go to the sites you wish to go to. >> and i thought from day one that what will define the presidency the first years is the bigang theoryof taking a cris and thinkg you can do big things and a lot of things simultaneoly. it doesn't lk at sound brilliant right w doing ca an trade and health care reform simultaneously >> the place so watch is the white house the circle around e president and forgn policy there are a few peoples whose names yo haven't heard and dennis mcdonough and i think this is a ue of aot o ministrations that policies being made in the whis rind arl the editor and chief of wired magazine who's new book is

called "fe." there'sfree as in freedom and norice and the imaginin what book called "free" would say and what the reality of the becomeoes say which is very much that notverything should be free or advertising will support everything but t underlying economicsallows you cost to be ino low. >> charlie: politico a chris anderson, next funding h been provided by the following. çó

captioning sponsored by rose communicatis from our sdios in new york city, this is charlie rose >> chaie: politico is a website and newspaperedicated covering all this politics. during last year's historic presidtial campaign it emeed as a symbol of the chaing face of media. today it has more reporters coveringhe white house tn y other news organization and you may ha seen and heard the reporters on telision and radiwhere they make over 100 appearances a week. >> ecutive editor of politico jim vandehei. goodorning. u wore a jacket. >> once i lened there's a dress code a morning sho i was ppy to adhere to it. >> let'salk health care. we got into it a ltle bit in

the last segment. ncy pelosi dring there of some mocrats. the house came out with the bill tha the cvosaid es not cut health care cosnd adds to the deficit and nan pelosi is under a tremendous amnt of pressu from moderate and house democrat. >> crlie: joining me is robert allbritton and executiveeditor jim vandeheind the senr politico corspondent. thiss an interesting show to mr. so ll start with the blisher. how doeshis get started? >> it was a publication we intended to do sarately called capital leader wneirst started under different manament. we alrey staed to hire a staff forhe publicatio and it

became obvious tus we were unsuccessfu unsuccessful in findina good edit and we were not happy with the dirtion it was taking and a distinctly waking un the middle of the night and turning to my wife and saying we need to make chaing and need to make them now? >> charlie: what did she do? >> s said to go back to sleep. wetarted to look aund 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 pos for an oonne j. >> we were thinking wher journalism was going and saw she we transformg and people in traditional nepapers are in a defensivcrouch that wasn't h we wanted to live our lives and

what's more as we wer brain storming there was auge opportunity in the webhat that could be a goo thing and as we were having brain storms we had no abilityo pull tm offnd throughood luck or serendipit weet rort allbritton and th whole deal came together with a few day robert's ideas where mediaas headingsynced perfect to what we were thinking having an impact in the subjects love which is politics and govnment anit was one o those timesn life where the key uocks perfectly within a couple days we decided to lve prey darn good jobs at the washiton post and never looked back ande're having a blast. >> charlie: what was the mission? >> to dominate the coverage of washington p washingto shington politics and like espn. as pple had niche area we

could have a bright future and we thought what if we put together t best reporters we knew and came from the work journal and shington post and johnas at the post years. we wked with everyone in washington and knew notll repoers were created ual and if we uld get ten or elve of the best and someone that worked with us attime mazine andben smith that werep and coming and expertise in prence and put them in one place and focus intensely on politics were pretty confident wcould move tohe front of the liand start to donate verage of washgton if we were focuss. >>harlie: it wasolitics 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 check out fincial news, politics i hope us and sports, people establish invidual relations with the sites deded to t our chip in t particular space. the post a any other tropolitan newspaperan'twn multiple spaces they have to died what th're about and go deep andhat matters mo, i think, tn whether you're distributing news print or on e-mail or mobi device. the point of theatters do

you own editial space and can you monitize it. >> charlie: are you? >> yes. >> the first six months are defined if theorld can like you more and they hed george bush so aone could haveome and the couries would have reted better he'sandled hill self marvelous especially overseas uerstanding the rious diences. he hasn't been tested yet. he's got thrs great relatiships what do you do with tm when push comes to shove d you need to stay in iraq longer can youush them to keep troop there or the criticism do low? what about when you need more troops routed toafghanistan because things get worse or ste down the iranian govement. i think he sets the stage to

have more leverage than george bush will have but we don't know untithe true testcomes. >> charlie: and itay come probably wre? >> what's scary om the world now it n come from koreans and they're worrie about afghistan and worried about how longo keep pubc and most liberals in the housdid not want to prode additional fundg forfghanistan and this year when obama's fing high and everybody wanted to give him what h wants boy doeshis get harder this year and if things get as bad everyone thinks it will it will be harder to fd it and do what he was is is a surge and have an agessive posture towards afghanistan. >> charlie: what's biden's role

in this government? this administraon? like any other vice president. >> like mos the office itsf has a shadow over it. and l vice presidents -- there's tension built intit. i think biden suffers that an all vice presidents have to -- al ge did and he had a first-rate staff and a good relationship with st of the press is a wit clinn. >> charlie: walter mondale. >> dick eney is the only one who hasn't vying for access and influee and credibilit credibil the role that almost by definion is held u to some ridicule i thinhe's doing fine and i think it's real they make fun of him and condescend tohim. i've heard it myself.

>> charlie: they do? >> eah, they do. but it doesn't mean they don't give him serious works. >> crlie: gaffs? >> neediness. >> charlie: neediness? >> all vic presidents ha to vie for time >>harlie: that's a new tm. who ar the emergin stars in the obama administration >> in the administration -- i think it's true of my white houses but the place to watch is the white hoe the ccle around the president and i think in foreign policy the's a small circl of people who's names you hen't cessarily heard,tom donnalin andeff mcdonough and ihink it'strue of a lot of ainistration has

it policies are being made in the white house anpeople at the encies and secretary clinton ha to work hard to get toe heard. >>harlie: what about geithner. >> he'sertainly surved and recoved which is -- after i think they had entirely sought through the fact he hadn'tdone television apprances before he s on the line and i think he leard on the jobut i think he certainly is a treasury cretary which was not absolutelylear he would be a couple mths a. >> charlie: i ep hearing about rohm a his centrality and how the president leansn him more and mo as a reliance factor that goes beyo the role of ief of staff. >> it's stunng. move whoatched dating back to the 1990, i thin at one time he was considered so aggressive and

so angling a now you have recognize he's pbably one of the mostnfluential cheifs of staffs in the hif of the modern presency because he has sh tremendousenergy and accounts. handles the legislative account and always centr when they'reutting the deal and handles to a markable dree e press and media. >> charlie: he and axelrod. >> and the polital account. how e we doing. what are our numrs ing. what's theong term strategy. >> charlie: is he accessible. >> one says tha at your peril. metimes i can't get him when i want him and sometimes i get him i don't want him. >> charlie: have we passed the pping point of the dominance

of online. >> i n't think so. >> that's wh's interesng out suppted media, they're still superior to the dollars going into interne media and when you look at companies like google a the search engines ofiting from it'semarkable there are sites like ours that are profitable off advertising dollars. we have no subscriptions. >> charlieand what aut this person? one interest thing about her isshe h emerged -- i mean she's somebody people like it read about in america and not true of ma congressional leaders. she's not just a washington figu. she's rely -- ahough i think he's proven more ristant caricare and republican attack, there's attpt to cast r ashis sortof wacko,

san fransco character. >> crlie: and more baltire democrat than san francisco democrat. >> her approval ratings are low or lower than dick cheney. >>harlie: it it meanshat she has approval ratengso low? >> the republicans have not turned her into the democrati version of newt gingrich who's name was nked to any r&b republic a democrat was trying to run ainst but that's a problem when one of the fes of your party is as popular as dick cheney. the di't finish that popular at the end of th bush year >> i'm a poweruy not a popularity guy e has power that newt gingri would ha killed for because she's stuff and disciplined and rules that pla with an iron

fist andas the chairman the wants and the position she wan angets what sh wants and people fr her and seem to respecher. shs totally unpopur especially with publicans and with a t democrats but she seems comfoable leing her own moderatedemocrats take shots at her. >> charlie: they like her more than they love her? but she couldt get itone with merta. >> but got everything else. t waxman in theey position and knows how to maneuver and use theinstitution. >> charlie: what's the core of competence. >> is an understanding of how power works. if you look at rom emanuel why wahe so successful? the understa congress and the needs of members. why was tomelay effective derstand the power of fear and what members need. she learned th and watched it and been in leadehip and becomes speaker and applieall

of that and puts the other ople who shenows have the samenderstanding and passion around her a it worked for her. >> charlie: wh is the most interesting question you'dlike to see answered and what's the most interestinghing about president obam >> most interesting thin from president obama fro my point of view how he has transformed re 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 stes then race relations, wle they have a long way t go, have come further than ey have t go for there fob a level of harmony in the united states. question i would like answered, que frankly, when will thi paper wind up winning a pulzer prize. the thini want to kn i guess

about thebama white house stly is you never really kno hothese things work in real time. there was a myth about the bush white house and how darn confident werend dick chen andkarl rove and they loved it each and karen and kl were rking all the time and dick eney was doing what he wanted do. i would like to know how much of that is mythology aeality and is axelrodthe rove of this white hoe? does he havehe broad portlio an influen he has. >> the whole obama presidency i thinkepends on owth. ople are ready to have a much bigger role for governmen but t if it means low growth an huge defici. it will and thas an -- if the

economy lags the whole thing dragon that. >> crlie: people tell me insi the white house those that talk to me at they understand. they have an awarene of the window and an awareness o the risk ty face. but they don't really control as se-confident and poiseds barack obama was. charlie: what do you think the miste was givingoo much power to congress to write legislatn -- >> may small tactical mtakes but what we have a huge stratec gamble. we don't know if it was mistake. th went with a big bang theory and it maye disasterous. >> charlie: ll they have another plan? >> i doubt it. the conservative democrats the people that won in 2006 and 28 by beating republicans from very consertive areas are not enthusiastic about it.

>> when you talk about the biggest mistake it mçó tn out to be the stimus bill and small percentageas been spent soar and if you look athe coverage it's portyed as being spent inefficiently and one of the areeasons theeople are calling in question the health care d cap and trade and saying wait you asked to us rush in to do stimulus bill an now we'll have umployment over ten percent. >>harlie: his argument is it's necessy for the suainability ofhe enomy. >> and the thing that struck me onhe campaign as the most interestinghing about himis his tendency sogo big in response to a crisis and to broad rather than narrowthe eld and i guess i think the intesting thing will be when he hits his firstfailure. right now he respondso that >> chaie: thank you all. pleasure to have youhere. >> great being here.

>> charlie: chs anderson is here the editoin-chief of wired magazine a has a w book called "free, the future of a radical price" sayi businesses can make moy giving things ay, free i'm pleased toave you back at this table. have you them up and arms. you just saw me do a show with them and re comes a guy who says have yoto give it away and pe for advertisg sport and said that's not as easy as chs thinks. what don't w understand abo what chris thinks? >> free is the most misundstood four-lett wd in the english lauage. it has chang in meaning om razors and blades and 21st century, free as in freedom and

free a inno price and then there's the imagining what a bookall free wld say which is like everying should be free and the what the reality of t book does say which is very much not that everying ould be free or advertisi will support evything but the derlying ecomics of digital stuff allows your cost tbe so low that a tiny fraction of yr audience can get it charlie: it's free for most but no all. >> is defined as not so much e produ is free for allbut free for u. gole doesn't show upn your credit cd statement. we're aware o what they're enjoying now and there's a new mol called frmiumiving one percent ofour brownies as an example. >> charlie: as a lost leader.

>>ou give out99% ofour product digally for free. sohink icker or flicker pro or if you're a g-mail user and want extra stora you'll pay for that that only possible with digital uff and when you look at e are vcs ying i'mot going support an advtising supported business model igree but ireasingly movi to freemium like may here's free version and here's the pay version. e free version is a great sample and if you convert to paid is because you use itnd liked it and youe loyal and thbest form of advertising around. >> charlie: that's the premium. >> that is the way free -- the firswave of the internet wa bud a big audienc use the low marginal cost andhrow ads

against it and the secondave of the intert was we're going to he a new kind of add and it's me effective a that's google and th third wave ofhe internet is buding a big audienceo sample productnd upsell ten percent of them to the paid version and that's like the video game wld as it goes from a box you buy for fifty bus to a freeo pay onli game thinkenguin or secon life and then itecomes free to pay d youant a pet for ur penguin, you want a hat, you want to py on the cool glacier over there you have topay. >> chaie: the premium model is the one going forward. >> the fir really new business model it's not easy. have you to think of a two oducts a free andaid one and people are ping you money but only a ten pernt or twenty

percent. >> charl: what's the confli betwee you and malcolm that wrote the reew and you responded. >> i didn't respond onwire that would be abusin my position i respond in my own blog. maolm owners that if the poster child of frees ggle video formhat would be utube h mind was i youtube was a bank it wouldualify for tarp nding. he says free is a bubble and the fact that xrouad youtube i not making moy is thechickens argoing to comeome to roost anthis is anothersubprime scenario waing to happen. >> charlie: whadoes the think is goi to happen tha youte. >> ulmately that businesses ke youtube are not going to make moneynd the revenues you can get maybe advertising. >> charlie: do you tnk the same for facebook?

they're spending money to ve other friend. >> malcolm says it's all pon scheme and a buleand that soon or later band width bills e going to come in and th mpanies will go bust and in adam's economy everything gets more eensive every year and bitseverything gets chear so whatever youtuost iwill st half as much a year from now and halff that and never have we seen ann dus dustrial economy get cheaper and what volume gets you atttion and retation and the actu cost so youay lose moy this yr but won't lose mey next year. what malco don't undstand is google doesn't buy band width

whol sale. they're buying dar fiber and printing plants. >> charlie: they go the wor putting up these. >> ty're losing a lot less than peopl think and i suspt th'll break evenoutube this year and not only is not a bubble but as the advertising modelearns to find licenses thway video is on utube wel see an economic enge as powerful. >> charlie: the argent is people don't wan to be next s me of the things that are on youtube or next t some of the things on facook. the beauty o text is that yo have an infinite diversity of text darrownitting blogs and you can creat knitng ads and the a and the content are perfectly mahed and relant and wn they're perfectly matche everyone's happy. the user -- it's content and

the aertisers feel it's effeive. the problem th video is you can't make as much video as adrtisers as the users can create and you need a sodderg tutori ad. we haven't figured it out. the smallo small. the intert is the first small to small medium a broadcast waeasy. big audiences, big ad. great for coke andcars. thenternet allows the content to be broad ornarrow. we figured out the brd ds, we han't figured out the narrow ads en the do the television industry is gog to restructure. charlie: how are newspapers andrints goingo restructure >> would you thi we'd know the answery now. some print is dead and some is

not. the question is doesour print add value to the internet and the audience wan it now and not 18s hours from now and the proble isthere's nothing wrong with newspap news but the print and th ink on your fingers and we're monetizing a one-fifth and newspaper journalively is beingead more than before. we like wh they make. that's good. >> chaie: we like the proct of newspapers. >> like the product and value journalism and don't kw how to charge for it. >> chaie: so you're the new york times. >> they' be fine. you kno >> charlie: becse they he such an international classy brand th in the end they can get they'll pay for it becae it's that valule. that the argument isf t?

>> the number ones in eve sector will be fine. >> charl: and the question is how can they come up with engh revenu to pay for penses which made it a quality product in theirst place. >> ectly. >>harlie: what's the answer. >> let's say the cosall by half as u move online. > as you switch from priing paper online maybe half your costs go away but your revenues fall by four-fifths. little problem there. i think e wall seet journal and papers like them and the new york times will fine. not quite yet. the walltreetjournal has a good model where it's free versus freemi. >> chaie: you get some free and some you pay. en't they prepared to do that

-- they had somethg called select. >> the questn is not fe and y. of course it's the answer free and pay but wh's free and what's paid. the firstime they said the column wants to beree because you wa to be in the conversationnd if you're not present if you'reot easyo get to you'll lose your influence. your videos are free online for exact that reason. one reason is sohe conversation -- charlie: i don't know who would y for they will. >> it's portant for ur place as a blic intellectual. >> charlie: someone cam know and said the otheray you he figure out a y you'll do mething about this remaable archive and property you he and that's continuing th stream notnly continuing but

moreich than it's ever been and you do somhing valuadded that make it premiumroduct whatever that is. >> there is f all of us. the audiee wants fe. we need paid. sowhat's the pet for our penguin. so the question is not how do we go down in price, how do we go up end price. so we're wir. we hav three pricings, zero the bsite and 80 cents an issue and the news stand. what's the other versions. >> crlie: what do you think it is? >> if you're radio headyou're giving away you're musicor free and get you a big audice in samplin and then say so with they will $100 versi is the

box set and then the vinyl and then the $350 versi is the front w seats at the concert. the questi is for med so you can stick to me of your contend an maybe the new york times can charge for the ipn ip app. >> charlie: do you thi that will be enough? >> no. >> charlie: so there i a weness in the argument right there? >> well, we don't have the answers t. we know free is here t stay. we have not figur out - we demonetized one industry >> charliethe answer we go free a i don't have an answer with a revenue stream to allow you to survive. that's where you a? >> we figured out free is here to sy and very to replace the renues we lostwith sometng else andeverything business h to figure itut differently.

google answered that and makes lots o money. >> charlie: seing information for advertising >> that's a good answer. i suspect faceok will answer in the next ye two? >> charl: how do you suspect? >> with bette ads a twiter will d that with premium serviceandhe wall street urnal seems to hav answered it pretty well already and new yo time times not yet. and eryone has to figure out who their pet for the peuin is. >> charlie: i'm not sure the wall street journal could survive based on t revenue they get. >> among newspapers? who's figured it out? >> charl: anybody. who gis away theirproduct. >> softwa companies. that's another business tha up the physical b and as moves

online they're with the service with 2.0 companies. once upon time come april 15th you go and buy e product, turbo tax and now it's online and you go to turbotax.m and it's n free, however,nce you've tyd all your informion and it's like oh, 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 chieffficiency and other thin. >> that's al these clichesnd scale. like y get whatou pay for. sometimes thanks t globalation, china or whatever, you can get higher quality at a lower price d thers a great ample of h stupid we are about price. free is out psyclogy. not about price because the price is zero. >> charlie: is this a more importan lson for the book >> free is a bigger theme. theme predates thpredates the i it's ubiquitous. i thk every indury will have toave a strategy and it's no 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 d 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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