>> rose: welco to the broadcasto want. the heal care debate continues tonight in washington, wtalk to a key plar, senator ken nrad, democratf north dakota >> i think the psident is ing toucceed, and his succs will be our country's success, becse his failure would be a fl ruhr for the nation. lookwe are headed r the cliff, medicare is going to go broke ineight years. agai, we are a circumsnce in wch were already spending twice adds much per person as any other country in the world and we're headed for a circumstan in whic one of every three llars in this onomy goes to health care. that cannote aowed to happen. and fore that would happen, here's what wod our. we would have not just 45 million people uninsured, we'd

have 100 million uninsur. our businesses would bome even less cpetitive. our trade defit would skyrket because our businesses simplyould not comete effect ily in the world economy. and more thanthat, t federal government could not finance itself bause it couldn't borrow enougmoney to floatthe boat. rose: and we connue with jason killor. >> i'm a big believer media is an impulse busines you dot need 0 rock" to live another day. it's n like food and clothing and shelter. i love "30 roc and is discretiony. the fact that 's an impulse business means that me if you can make it easie to consum, people will consume more of it. so t ah-ha moment forthe consers was they could consume "30 rock"hen they nted. when t kids went to sleep. or in the morning when they went to break. and that's big pa of the

hulu value proposition. >> rose: healt care andulu xt. captioning sponsored by rose communicatis from our studios in new yo city, this icharlie rose. >> rose: the health careebate in washingn has entered a critical phase. recentolls show the that public suprt for the

democrs' reform plan have declined. last week, the hou energyand commerce committee voted along party lis to pass a reform bill. the senate, a bipartin group senators are negotiating a sepate bill that would replace the public oion with nonpritooperatives. but as congress appaches aust reces, many questions still remain joining me in washington, senator kent conrad of north dakota. he's aember of the senate finance commtee and the senate budget committee. i am pleased to have hi back on this progm. tell us, senator, thank you for ming and give us sense of where yothink this isheaded anwhat the final version is going to look like. >> well, i suspect that in our group, six members of the financ committee-- the democrats, three remembers-- we're headed ithe direction of a plan that wld cover % of the american people. at would be fullyaid for and that would ben the ct curve in the right w. that is, it would pvent the

explosion health care costs that are continug that threatenmerican families, our businesses and en the government itself. >> rose: will there be a public option? well, in our alteative, we have an agement... nothing is reed to unt everything is aged to and everything has not yet beengreed too things could change. but i say the greater likely shood that some sort of public interest cooperative would will likely be e choice. and that is an entity that would provideompetition for the for-prof insurance industry but not be government n and governnt controlled, it wou be controll and run by its mbership. >> rose: and themembership woulbe... who would be in the mbership? people who decide to buy into ese plans. you know that's t way a cooperative works. cooperatives are rally ver

broadly used across the country. iometimes read that cooperativesan't be big enties and yet landakes is a cooperative, it's $90 entity. i read that co-ops are only in the midwest. there are co-ops in ery state in this nation. 47 states he rurallectric cooperatives. ace hardware is a cooperave. opates all over the count. true value hardware is cooperative. the associated press i a cooperative and,f course, in health care out in washington state they have a health care cooperative that's got 600,000 people i it competing very successfully. i thin that given the reality th we confront in the senate, that reality is simply this: there are not the votes for health care reform if a pure public option is part o it. that just the hard reality. every republan save one is agait it.ç

and there ara number of democrs who are as well and so if you do e math it's very clear there simply is not suort for pur public optn. i think theris support for th publi interest option called a kooptdlan. >> rose: where does the presidt stand on cooperatis? >> well, i understan the other day he indicated th it could be an acceptabl public interest option t him. i can't speak for him, i don't know if he was misquote but i've heard tha he's said tha in an interview. >> ros will he run in trouble with some of the people who were passionate in their suppt of him both in the primary and clearly in the geral election? >> well, again, i can't speak for him. but t me just say i've certainly run in resistance to somef my close friends who've said "kent, what is wng with you? y are you oposing something other than public option?" look.... >> rose: and the answer... go

ahead, i'm sorry, i d't mean to interrupt. >> i was given this assignment by the g-11roup, that's the airman and ranking members of the keyommittees dealing with health carwhen it becam clear there aren't the tes in the unitedtates senate for plic tion. so thewere looking for some alternative that would cture some of the strengths o pubc opti and t the oright opposition of all republicans. so at's how i got in this position a, look, th cooperative model has en ccessful across many business lines r a very long period of time in this country. sot wouldrovide a nonprofit competitor to e for-profit surance companies that, in many states, simply face no competition and lf the states in this country, charlie, there is no effective competiti. >> rose: howard dn said "it's a shame, reall, because democrats argoing to end up ing responsible for kilng th bill. if we stick together li the

republicanare, we can get this passed. but unfortunately, that doesn't seem to be the case. this coromise doesothing expt it will reform insurance. that's a good thg to do, but they ought to strip the money out of it cause 've formed insurance like ts in veont 15 yrs ago. it's a fine ing to do but it doesn't insure me people. the senate finance commiee is really in troue." >> wl, iust disagree with that. look, have greatespect for howard dean, count him as a frnd, but the fact is our propal covers 95% of the people in th country. rember, the co-op proposals just one piece of a mh larg alth careeform bill. and the coverage expansion tt is in this bill is very significant. 95% of the people in this country would get covered under thisegislation and that's separate and art from the cooperative feature ofthe bill. number two, congressional budget

ofce says in their preliminary anysis of ourlan that it is paid for and i do bend the cost curve in the right way. and rlize that isbsolutely imperave, because we're spending twice as much per personn health care as any other country in the world. on in every six dlars in th onomy. and wee headed for a circumstance in which we're going to spend one in ery three dollars in thi economy on health care if westay on the rrent course. at is utterly unstainable. there's sbility in a plan that would tak one in eve the dollars in this enomy for health care. >> rose:ack to cooperatives, though, ich you... many people seemo see as the way to get beyond thepublic option i, in fact, they're notillinging to do what howard de says. ja rockefeller. would be darned if i wou be allowed to me forward to the extent i could me forward with somethinthat sounds use friendly.

what to worry about is are cooperating going to be effective taking on these eye dant can insurance compani? from everything i knowfrom ople who represent them t aner is a flat no." >> wl, let me just say that we've go to the best experts in the country, theest tuaries, the best insurance industry experts, peopleho are not the insurance industry but are experts about it. and here's what they have said. they have said that th plan that whave on the table would veryquickly get 12 mlion members, it woulbe the third biggest insurer in the country and would provide very meaningful competion to the for-profit insurance compaes. remember, whatay is talking about is the status quo. he's talking about the current insurance market ueformed. in other parts of this legislation, we are gog to dramatically rorm the surance market. they're not going to be abl to deny based on p-existing nditions anymore. they're not gointo be able to

engage in a lot of t prici gas that they use now to extrt profits fro consumers. and this is going t be a very different mket. at least that's what the actuaries tell us. and as a rest, wn you couple rerm with million w entrants wita co-opodel that has been so successful across so many differe business lines i is country over 90 yea, the say you'regoing to have a very effectiveompetitor. >> rose: i don't know how ask this question bu here it is. all other things bei equal, would you pfer if both the potical viability of either way was the same, would you be for cooperives o the public option? >> younow,sy really belve the cooperative approach is a superior one for the reasons i've given i think will provide very stng competition tothe for-profitnsurance market. i also believe that it is

politically vile, that it can t the votes. i also believe that this is a model that has worked ver well for many years i thiountry and becausets membership-run meership-contrled, has a special way ofconnecting with the ople it rves. >> rose: the idea of budget neutrality. some argue the only y to achieve that is tax on health care benefit. you say? >> no. that's really no the cas you can achie budget neutrality over the ten years with other revue types what is very hard to do is beyond the ten years bendi the cost cur in health care the righway without taking o some of the massive tax subsidy there is for health care in this economy. sofor example, the income tax subsidy to health care over the nexten years is $2.4 trillion.

and virtuallyvery economist that has come before us has said "ts is sometng you simply must address if u're going to bend the cost curve for healt care in th right way. if you're going to prevent these burgeoning, spiraling cos that threen coverage for eryone." so i thinke've got to pay attention to tt advice. >>ose: some people also say that ifou're going to deal with the defits, you have to reform fm subsidies. >> yes. and the last farm bill we passed had more refor in it than any farm bill inhe history of the united states congress. >> rose: but was it enoh? >> excuse me? >> ros was it enoug >> it's a ry good start. clearly we're goingo have to more because we look across thecountry,we understand we're head for the cli as a nati but let's be ve clear: agriculte is not the pblem.

the last farm bl was fully paid for, did not add a de to the decit. if evebody was as responsie as we were and that s done in part aty insisten as chairman of the budget commiee, i insisted the last farm bill be paid for and it was. ifvery other partof the budget was as responsible as we've been, we woul't have a problem. >> rose: someepublicans argue at it has the possibilities of being waterloofor the president. >> i don't think it going to be a waterloo for t president. i thinthe president isoing succeed and his success will b our country's success because his failurwould be a failu for the nati. look, we are hded for the cliff. mecare is going to go broke in eight yea. again, we are in a circumstance in which we are already spending twice asuch per person as any other country in the world and we're headed f a circumstae

in which one of every three dollars in this economy goes to alth care. that cannot beallowedto haen. and fore that would happen, here's what would occur. we would have not just 45 milliopeople uninsured, we'd have 100 milln uninsed. our businesses would become eve less competitive our trade defic would skyroct because our business simply could not compete effectively the world economy. and more than at, the fedal gornment could not finance itself becse it coun't borrow enough mone to float t boat. so we've got to get real as country. we're on a course thatis utterly unsustainabl >> rose: you are a member of what they ll the gang of six. i think it s "the econist" magazine who saidhat the finance coittee and the gang of six is the last best hope for sensible refor this year. do you think that's accurate? >> well, i... (laughs)

charli i'd hesitate to say group i'm part o is the last and only hope. no, i don'teally believe that. i do think tha we offer a very serious alternative here and, u know, some of our colleagues y, gee, i'm not in theroom, i'mpset by that. and i understand that frusation. but we're n the deciders. is group of six-- tee democrats and three reblicans, all membs of the finance committee,wo of them e prominent membs of the health mmittee as well, the health committee-- we see the ligation that we have to make a proposal to our colleagues. our colleagues will be the decirs. our coeagues will be the one that offer amements and vote and ultimaty dide what happs. >> rose: wt will happen before cess? >> what will happen before recess in th senate is that we

will not have a mark in the finance committee because we' no ready. anmore important than any tificial deadline is getting thisight. we met for hours again today. we'll be meetg everyday before e break. we will beeeting during the break. we have a full agendaf issues t to be decided. i can report that the initial indications from the ngressional budget office are that we're going in the right direction, thawe have a oposal that can be fully paid for an wil bend the cost curv in the right y and that will also cover 95%f the amican people. that's a pretty good beginni. >> ros and how would you asure what some are calling that there's bn a floff in public entsiasm f the president's propol, which is not really proposal because he waiting, ithink, forwhat the senate will do? >> yeah, ihink that's very unfair to the preside. the president has given congres

th leeway to come u with proposals and, y know, some of the propols weren't paid for d the people read about that and said "it a minute, that's not what we had in mind. other proposa not onlywere not paid fo but be the cost curve in the wrong way. i soliced thattestimony in a... an appearance before the senate budget committee that i chair by the head the congressional budget oice. d, again, the arican people understand that we'r headed in a direction th simply is unsustnable. soending the cost cue in the wrong way is really not an option here. >>rose: what do you think abou the bartisanship argument? >> here's the hard reality. the demoats have 60 ves in the united statesenate. that's true. senator kennedy and nator byrd haveeen absent due to illness for an expended peod of time. and we all understand that and we resct them deeply and hope

r their quick return. buwe will be i a circumstanc when we stt to vote in which there wi be many dozens and dozens and dozens of votes. so i don think you can count on both of them being there for that entireroceeding. so that takes you to 58 votes. aumber of mocrats have publicly said they wou not suppora reform proposal if it had public option included. that takes you dn another three tes. now you're at 55 vote you need 60otes to advance a proposal in thunited states senate that tells me you've got to have republican support if you wa to be successful. if you ju want to take your position anday "it's our way or the highway," you can go in a dierent way. of course, another possibility is the us of reconciation. >> rose:ight. >> that aids a filibuster. but there are major problems with ronciliation. fit of tm being

reconciliation reqres the legislatn to be paid f over five years and every year thereafter. under the budgetesolution, health car reform could be paid for over t years. that is very, very big difference. and for those who say they want universal coverage, they better check very, very carelly. what willhappen under reconciliationo their goal covering t vast majority of americans? second, under reconciliation, yore subject to what'called theyrd rule. the robert c. bd rule. the robert c. byrdule was desied to prevent reconciliation from beg used to writeajor substantive leslation because reconciliation was only intended for defic reducti in which you chan the spending numbers and the renue numbe butot wre substabive the policy. and so he put specific les in

place to pvent writi bstantive legislati. and so under the bd ruleany provisn that does not score for budget purposes is subject to strike. anything for which the score is only incidental to theolicy changes subject to automic stri. what doethat all mean? parliamentarianists saidf you try to wri health care reform legislation and reconciliation, you'll be left with swiss cheese for legislation. those who say bthely "we'll just go foreconciliation," i don't thinkhey've done the ho work about what that really means. >> rose: senator kent conrad of north kota, a democrat who serves on the fince committee theudget committee and is a member of the ga of sixtrying to find an acceptable compromise for health ce refo. back in a moment. ay with us.

>> rose: jon kilar is here, he's the e.o. of hulu, an onlineideo service gting increasingraffic and increasing attentionment. they offer free tevision shows moes and clips. kilar is aormer amazon executive. he was brought to hulu by per er unanimous formerly of newscorp and jeff zuck of nibs universal. here iwhat they said on this program about hulu at earli time >> so the piracy opportunity, what i thought about was ultimately the more me i spent on it is, well, i think that the are things.. legal thing and enforceme things, et cete, et cetera, they are not the meaningl way tofight piracy. the meaningful way to fight racy is you need to give consumers legitimate portunities to get wh they want. and then i h also been thinking about the pay televisionusiness and the fact that hbo had de a great job of aggravatin everybo's content. i think athe same time, jf

zucker, ad of nbc universal, had been thinking out the same sorts things. >> the bigst challenge we fe on a dailybasis is just how agmented the mediaorld is and how 're going to make this transitionrom the world that you and i have grown up in, this analog wld where really we programmed to the viewer and we tol the viewer when the movie would come out and all of those things to ts new digital world where,rankly, everything's available wherever theviewer wantsit, however they wt it and navigating that new worlis really t big challenge of anybodyn my position. >> rose: abc h also announced that it wod join andecome a partner of hulu. many of their proams include fare from e three netrks "family guy" "30 rock." also progrs like "the daily show with n stewart." th have also talked to this prram about being includedin hulu. m pleased to welcome jon kilar tohis table for t first time. whose brai child was this? >>he first credit absolutely goes to peterher unanimous d

jeff zucker combined which is interestinin that both jeff on his own and peter on his o fe that aggregation was important and they metime this colusion on their ownnd they eventually met and talked about it and suck a hand shake agreement andnnounced in the march of 2007. so the fst credit absolely goes topeter chair unanius an jeff zucker. >> rose: wasart of the stulus to do thisthat some people were unhpy about what was bein put on youte? >> yes. there was a number... if you take a lookt their content, their most precious asset, it was being consud on the inteet, just not in ways that they were actually involved in, whether it be bit torrent client directorys or other venues. >> rose: what is goin to bethe business model for the monetizationf content on t we >> number of things. when you lk at hul today we have a free asupported model and i ink that happe to be the biggest. if you look at t way the premium content is monetize ere's a lot of different

models o there. sometimeyou pay for individual episode, for emple itunes, other timesou pay for a subscription. other tis it's fe ad pported. if you lk at just in the u.s., it's about a $57 billion industry with regas to ad-supported premium content. that the biggest pond. >> rose:hat is definedas premium connt? >> the way i definit is it's done by people who dohis for a living. which don't necessarily mean it has tbe on televion. there's a great example called premium content called "dr. horrible sing along blog" whicis done by joss whee n, he created "fffy the vampi slayer." he did that during the writer's strike. that's pmium conte. you won't find it on telision but 's premium so i thi you'll see flavo of it. there ll be free ad support whichad i think is the most ubiquito one and the largest one in dollar terms but tre's othemodels that will be a part of monization on the web including a la carte, subscription a variae thereo >> rose: how are thosehat are

paid for work out when you pay for coent other than itus? >> so itunes has been out there for a whil where youpay a couple dolla to getting acces to a commerciafree version of an episode you can y an era dollar to get an h.d version of the same content. but i could see a lot of diffent models where again, this is all aboupeople deciding what do with their time andollars, which is,ou ow, there's a great price for ad-suppoed content, which is free in genel. andhere's also varnts wher you can pay d have ad-free. so that'she way you see people make decisions. there's also opportuniti for high definitionersions and portability and all these wonderful things. i definitely think that tre's not going to be justne mod but many models becse consumer deserve choe. >> rose: l me look at your career for a ment. you went to universi of north carona. >> i sure di >> rose: worke for dney. >> i d. rose: and were working fo amaz. >> yes >> rose: jeff bezos ha an inflnce on your life d looking at him as a mento >> that's an underatement. jeff is a rare bird.

has the highest professional judgment of anybody i've just met. rose: what does that mean? >> there's... again, i use the term "odd bird" because you don't run to people like him normfully that he's got a combination of a nber of different things tha most people don't have in one body. he has the disciple and the patience to plant seeds and know that it will take ars for them to bear fruit. he's got the inventors neuroses of sorts in tt he likesto invent new this and push the envelope with regard to technology and hs got to sobrie to know that the things take time and they take very much a bi of candor to be honest with yoursel and your team membersn terms of what it's going to ke. he's also got the energy to quite frankly be the energizer bunnof sorts to work for long periods of me very, very tenaciously to get tohere he nts to go. >> ros are you surpris that hulu has ctured has viewers as it haso quickl >> inome ways i am,es. but the reason why i hitate is

that the reason why the hulu am gave up a l of thei lives d reloced to get gog because we had such nviction that the world need a service like ts. so inur private moment wes certainly ve very, very bitious expectationsf ourselves, far larger than anybody else outside the coany. so i hesitate because you know, in o sort of prive moments, the team and mylf we have ver big belief in terms where ha this can go. but interms of expectations externally, think it h exceed most people's expectations if not all. >> rose: and why is that? obviously there was a pt-up demand. >> well, it started... you know, the genes of hulu was that it had a temrary name called new co. anpeople in some cam started to cl it clown cobecause the history of a venture where you've gotig trational media coanies behind it as a joint venture,articularly on the internet, the there's not a long

history ofreat successful ventures that ha those characteristics. and so the exptation were very low at the start bause we were called clown co. and in some ways thawas a blessing for us becaus ere's noere to go but up when people are calling you clown co. and so i think in many ways t bar walow given the hisry of these kinds ofventures and th think people sudden when they actually used the produ set aside all that negate vibe and all that negative history and said that they actuly liked the product and it truly made an pact on the >> re: they liked tt they could see premium-quatyideo material at on source? >> at one source. so there... i'm a big believer that mia is an impulse buness. you don't ed "30 rock"to live another day. 's not like foo and othing anshelter. and i love "30 rock"ut it discretionary. so the fact that it'sn imlse busiss means that to me you n make it easer to consume, people will consume more of it. so i thinkhe -ha moment for consumers was that basicly they could consume "30 rock"

when thewanted, when it was convenient after the kidwent to sle or in theorning when they had a break and that's very liberatg. it's very empowering and i think at the heart that's a big part of the hulu value propositn. >> rose: how much of t video in the next decade is going to move online? >> ithink the fullness of ti l of it moves online. every sile piece of pressional content, not just current content but historical contt moves online. >> rose: wt's the flness of time? >> i think ten years is a asonable period of time. now, let me caveat that b saying it doesn't mean the destruction of other venues at quite frankly,are very good venues. so cable,atellite, tell coprovided connt. thatoesn't go away. there's a long htory of that venue specifically i the living room whereeople are comfortable wi that, there's a human behavior element where it kes a long time to chan. that said, the iernet is such a powerful force, be ableo leverage that pe and deliver content to various dices, whether it be computers or

mobile devices or other devices quite frankly, monitors that hang on wal, that's coming. and what i think sometime peopleet wrong is how long it will takein certain enronments. because it...ou know, thes things take time. anything thahas hardware asciated with it takes, quite frankly, long, long time in terms ofriving change. sflup we moving to a pnt where there ll be no aointment television, no realtime television? >> we we to fast forward, programing is always going to be a healt mix of event programming and on deman programming. there's certain thgs like scripted drama tha.. they're eier tical or such water cooler momentshat i think they'll be consumed within 48 hours. you don't ve to consu them at 9:00, but youant to csume them within the first couple days so you can talk t your friends about it the susan boyle phenomen on "britain's g talent." yo neededo consume that within the first 4 hours to be in the kw. i think thator high-quality scried content, that will be sortf an on-demand environment

but you look at a lot of programming toda there's a move to having it be an event program becausthere's value in that. "american idol" i a great example. the finale of "amecan idol", that event television the super bowl, that's event television. not just sports but there's ao a g swath of entertainment that also event television. >> rose: so y know that the associated press and the "wall street journal" have th expressed some concern that theimaterial is on, say, google, with advertising that google gets paid for alongside their content. >> thas true. >> rose: make them enormous unppy. >> yes, itdoes. >> rose: how will thatesolve self? wspapers who object to content being put where someone else derives the income >> it's interting. so i'm of e intnet. my whole career on the inrnet. and so seehe nundrum that the content owner, in this case wspapers, are in. which is they see a company ining into that will h created

tremendous mart cap and value for their shareholders and you're right, there ar extracts that come on those pages and you see vertising next to it. that said, gooe also creates a lot of value r the content owner in that they're sending people to consum those full articl at that web site. so it's an extract. it's not the full article. anso it's a bit o a...you can't complainbout just one sidef the coin, you haveo actually think about thether side which is that the's a lot of traffic tt comes tothese web sites from a service like google. >> rose: you were in the content business, whether you were king movies or at a newspaper or as i do a televisn show, how would yo inooking forward nt toistribute it and monetize it to t most number of people? >> so.... >> rose: or the mt revenue sweet number of people. >> i ink at... i'll start by saying that if you'r good at it you can eate high-quality entertainment that people wa to consume,hat is a ry valuableusiness a the reon

why ihey ishere's a lot of businesses outhere where they're not incredibly defeible because you can get a similar like service from other people. that sd.... >> rose: what'san exple of that he? >> so if you want a good iced tea, you don'thave to go to snapple. you can go toipton and t good iced tea. they're substutes. ifou want "30 rock" you can't go anywhere but to the people that ownshe rights to "30 rock." so no ebs is in good position beuse they have a hard-earned monopo on "30 rock." soith regards to wher this goes, if you can create gat ntent in the next ten years, you're going to have a lot more opons to monetize th conte en you did over the past ten yes because.... >>ose: and how will you make the decision between subscripti, say, and on the other hand aertiser supporte i think there will b a lot of testin whh is... clearly if you're looking for ubiquity in terms of an audience you' going go free ad support. that the easiest wa to make a hi you want to ma sure the brdest possible people can

consume it, make sure there's as little friction as possie to sample it and that's what free ad-supported ctent derives. th said, there's also the hbo model which says "i'm going to charge a subscription tgetting access to shows like the s ran knows sex and the city"o i think that has to be thoht very carefully, wch path do i want to go down. and ultimately it's a series of tes before you know "i want to go down this set of paths for this contentnd this set of paths for that content." >> rose: sthe people who create entertainment programming don't have the se issues that people who own newspapers do because people w own newspapers have paynormous expenses n only for pri bug correspondents and reporters a editors around the world >> tt's right. >> re: so therefore that window of revenue is closing on themnd the other revee window is notopening fast enough, th're between a rock and a hard place. >> thesure are. at's not the case in video. (laughs) that said, tre's a lot of smart people working o the

newspaper side of theoino develop new mels. >> rose: what's your bt guess thway that will end up so, i think thathere's ing to be devices. kindle gets a lot of press right now. >> rose: it does. so... gohead. deservey so. they are creating a modelthat has people get a very valble thing-- which newspapers like th"new york times" and the all street journal"-- on a device wrever people want to consume it. whether on the subway or wha t. and they char people f it. so that'sthe beginnings of siness model. i know there's a lot contenti about well, who gets at, how much does amazon get, how ch does the newaper get? >> rose: the contention is not so much who gets what, it's how much amazonets and how little they get. >> there there y go. >> rose: as you know, you were there. aughs) i'm aware of both sides. so that will play itsel out and i'm sure there will be plenty of drama but these thing do so themlves out. think there's good news, by the way, in that future. >> rose: and a l of people ling up, including google/sony

combinations and other peopl sayi the kindl can do do i, we can do it better. >> gat ideas attract a lot of people to that marke >> rose: and there is this question which has lingered for a number of years. the utube and facebook. >> yes. >> rose: monetizing tm. >>es. >> rose:hat's the probl ther >> well,y assesent.... >> rose: is it a different problem? a different problem versus newspapers? >> rose: no. among the two of them. these aces that have enormous number of hits. >> that's te. that's true. >> rose: and not the revenue that refles that numb of hi. rit? >> i thinkhat is ir to say. that is fa to say. and i think there's nuance between the two. ey're not... and this is just my aessment, ithink you would need to ask them forheir thoughts on the top. when i take a look at it, e situation is, as you say it. which is an enormous audience but another an ermous advertiser recepti yet with regards to those companies.

on the oneide with youtube, i think a lot of it these do with the environment d the conte in tt advertisers tend to want to be associated wit a certain type of contentwhich is that they know ver well it has a certain quality associated with ithat quite frankly tha quality has a halo affect eir brand and brand message. sthup's th window you guys found? >> tt's exactly what we focus on. so thas the distinctiothere. on the febook side, i think it's a bit of an evolutn in that that company, whic has clearly done amazing things, wa i beeve, as an outder looking in was found on a culture th was obsessive about users anthey built a service that is very valuae for users and that is to be appuded. i think challee for facebook is to devel a culture thatas the advertiser and the ad service being as strong a part of their culture as the ur obsession is. that i a trick because cuures are t easy to cha they're sometimes aost impossibleto change. but that i tnk is the chalnge. >> rose: whas the way out for

them? >> theway out is for mark zuckberg-- and he's doing , i believe-- is to make sure that'sart of the culture. the quality of the advertising service and the efficy of the advertisinservice has to be talkedbout as much internally the user experience. on when that you have sort of obsessn over both of the customers that are actually a part of that business well, think you have a great, great traction othe advertising side. >> re: how would you do that, though >> you leady example. i'll describe little bit of hu, for example, a day in the lifef hulu. we have thr ctomers. we haveusers, we have advertisers, ande have content partners. we have three customers. weon't have oneustomer, we have three. and weake all of our disions in balanceday and by the way, our rallyi cry as a compy is to make sure that we deliver a seice tha users, advertisers and content owners unabashedly ve. which means that the design of e service has to delht advertisers as much as it delights users a we're not willing to settle for less than love, to be quite ank.

and so thas an entirely unique culturbecause it means that you're boxing your decisions and that you have toake sure that the design o the servic is very aesthetically cle for users but alsoocus for advertisers. and i'm not saying it's easy, but weconstantly live that delicate balance between o thre customersnd not sacrifing one out of thethree two out of the three. that's huge part of our culture. if y ever stop by the office, i think you'd feel that advertiser focus. you'd feel that user focus and feel that content focus. sthup so you're i the busess finding content where it's "chaie rose" or "jon stewart" or30 roc or "60 minutes," whateve it might be. >> y. >> rose: es hulu want to say "no onlyo we wanto show you material created by other people some of whom are our busess partners, t also we want to eate original materi for you to cpete with those ys. we're very... a big part of our culture is that we're hule

and wee very se-away, i guess you coulsay. fancy ourselves pretty good at w site desig and prett good at technology. very good at creating advertisinservices that work. we happen to tnk that we ar unique unqualified to create content. we don't write scripts, we don't produce televisio shows. we are uquely unqualified to do tha so ion't see that happening. we certaly don't have the capabity today nor dwe have thembition to do that. i think th there's so many tanted people out there that should be dog that as opsed to a bunch of technology gee, which what you fd at hulu. >> rose: let me tk about how you put is together whichis interesting, and correct me if i'm wrong. >> okay. >>ose: you knew of some very, ve bright i think chinese software eineer. >> his name is eric fang. a good friend from my seattle dayshat i spent ne ten yes.... >> rose: azon and microsoft. >> amazon and miosoft are both in seatt and he and i play texas hold 'em on my front deck in queen ann neighborhood in seattle. so he was in mrosoft redmond

and th he went over to china. >> rose: whe they have a huge research cente >> huge research cter. he's a fantastic talent. he's one othe sharpest guys i know and so humble andjust a great person. he was over in being and i got a call about whatas at the time called new co. and.... >> rose: you got a cl from him in? henew you were goi to be the guy? >> iot a call from fox andnbc and i started toalk to peter and jeff and as was havg those conversations, i reached out to eric. so we had a sers of dnight phone calls because of the time differen. so i'dall him at :45 my tim at nht. >> rose: it would be 11:45 in the morning for m? >> exactly, the next day. so we wod have a sies of nightlphone calls abo "what do you think?" and we talked a lot abou the vision for the company,hat the requiremen would need to be and that led to h and i jumping into this thingogether. rose: he stayed in beijing? >> it'sinteresting. so that story is... before i started at what was to become lu, i flew over to beijing to

pick him up. so iflew over there and acquir his.... >> rose: pick him up whatoes th mean? that's right, he created a softre company. he lt microsoft to create a software company. >> right. and i wen over to basicalldo due diligencon his team he hired of fantastic engeers and made an offer to him to acquire his teamasically, his company, and brought hi back to be c.t.o. of hulu. >> rose: chiefechnical officer? >> chief technicalfficer and he runs the audience business so he was... it wa very much an "oceans 1 type siation where i was call manager i friends saying "come on, we have to get this thing going." >> rose:so you brought the team? >> i brought the team... we welcomed them to the organization, should say. >> rose: they're not forsale. not a product. >> (laughs the engines stayed in beijing. we started developments or there. it thrives today it's a fantast.... >> rose: a they're there and eric's wherever you are? >> he's in santa monica in uthern california. he relocated. we pickedp our hea of

commications. >> ros from beijing, too? >> she was from beijing. so she in santa monica in southern california. so we got the company going. >>ose: tell me wh this phenomenon mea? explain to me the cultural signifance of what you jt descbed. and the twhoorld we live in today. >> the way iould describe i that tent has... kns know geographic boundaries. we'r relentless a ruthls about going to where the talt is in the interest of our mission. we've certnly dened ourselves as a glol siness. if you lk at the tm, we have a lot of different backgrounds. 've lived a lotf different places. ouinterest is to create a global serce and that doesn't mean that we need to be exclusivy located in silicon lley or southern california. so i think the cultural significance is ou ambitns aninterests are toe a global service. coming from amazon, i know nothing else. the internet is a global serce therefore hulshould be a glob service. so i think the cultural signicance is that we don't

worry abou things like your nationality and what your passpo looks like. >> re: hulu can be seen in china? >> n yet. we're hard at work on being able to bring hulu as a rvice across the global. >> re: what's theroblem? >> intellectual rhts are the problem. (laughs) which isn't a prlem, it's a good thing if you hpen to own them. t it's a gnarlly process legally to make su you unlock the market by marke by market. >> rose: what dohey want to know? >> the owners? >> rose: no, the chine government >> s, wit regards to.... >>ose: they want to know what's coming through the hulu web site, do they not? >> f sure. and our first focus inteationally is not china. we happen to ve developnt occurring in china.... >> rose: billions and billions of people. >> it for sure. and i tnk it's going to be a very iortant market, i'm stating the obvious. and certainly would be very disaointed ifhulu was n visible in china in theuture, but to set expectations, that's not our first focus internationally. >> rose: and your first focus in eupe?

>> the bigge markets are western europe. so clearly without goi into details r competitive reaso, europe is a big focus fo us. >>rose: theother thing that's interesting to me abouthe idea of this is that it's a perfect example where old media and new medicame together in a smart way. peter chernan. >> yes. >> rose: and jeff zucker were wise enough tosay "weave the content, we createontent. we d't know how t put the content on the internet, we are not going to te somebody who creates contenthere and pu him in charge of a companyo put content on the internet, what we need is sebody like you wh understands the internet and knowing that hhas a source of content can ke it work." so it is one of those examples where theld media got i

rit. >> thedid. >> rose: and understood how to make the merger. >> this isso unusu. and the reason why i tnk it historically hasot... you don't see a ng line of ticles about successesn that space is because imagi if your mostrecious asset, if you we... you know, you had to make a decision to take you most precious asset that took hundreds of llions of dollars to cate, if not more, and you're going to handt over to some cra couple of guys from seattle? everybody would say you're nuts! but that's what they d. to peter and jeff's crit, they took their most precious assets and took a l of heat internally at ea of their companies, byhe way, and handed over e keys to a couple of guysfrom seattle. it's almost unhrd of. >> ro: by whose sary they are paid. absolutely. but is... keep mind.. >> rose: o income. >> if u were to take a loo at the lture of hulu and t set of hu and the... it couldn't be more different than the cuures of nbc univeal and

news cp. now, the cultures of newscorp.... >>ose: in every way. >> by that i mean thathe cultures of nbc universal a newscorp aredeally suited to theimission, but hulu's mission is very diffent, which by saying th it necessitates a very diffent culture. we all f coach clas we eat popcorn corn. like we have cardboard bes that hold up our monitors. very ver frugal. that is nded forhe culre. thother thing is everybody at hulu ian owner inulu. that is soifferent tn the cultur in traditnal media. but that culture.. >> rose: hows everybody in hulu an owner? meaning all your partners are owners? all the people that provide the contt are owners? >>o. >> rose: youmean the people who work at...so your team from... >> my assistants an owner in hulu. anthat's the way it should be. becae if we're fortunate to create upside and to create value fo hulu, i think everybody at hu should particate in that upde. >> rose: what's the pr xaer son betwn the percenta of ownership of your assista and

your percentage of ownerip? >> it's different. but no unlike, for example, if yore at google or amazon or what not. clearly it's not all the same in terms ... with regards to that. >> re: but if it very important if youere withhose two places and you were ther in the beginnin >> there certainly a ris profile. so with regard to theeople... ic is a great... eric fang, thgentleman that i cled in beijin this guy took a tremendous leap of faith and he relocated his familynd came all the w over here. at is going to have a reward to it because he took the greatest risk. >> rose: okay. y did they take the risk? i mean, is it because wt you are offering is downhe road or in the near term offers extraoinary opportunity for income? ist because itoffers an opportunity to bld something? and what is tha something that they thi they're building? >> i'm very sober and a realist when it comes to answering this question and i thi if you were

to get t know our teamhe vast majority of folks, if notll of them, are hu because they see the prise of a rvice that they so dearly wante themselves growing up. there's something ve powerful about at hulu c doin terms of making media avaable on your terms. and to me that's why the people e at hulu. theres a kicker to it. which is if wre able to create a truly speal company,here should b a financi benefit and a significant oneif we're able t create somhing truly special. but i think th the financials, if that'shat motivates you, you ould go work on wall street, nowork atulu. rose: or used to work on wa street. >> mbe so. but the daily satisfaction and the smilwes get are on looking at designs and gradients and the responses on twitter about o dave matthew band cce that we live stream. thosare the things that t a smile on our fe and you can go to bed le at night and say "i'm creatg something special." >> rose: you just mentioneddave

matthews. what d you do ther >> dave matthews had a coert here inew york and it was our first effort, actually live stam agooncert. d so we actually prevented the dave matthews band the live concert the beacontheater on hu live. nowt's available onulu on dema. so if you wanto see it, it was a fantastic show with their new albu >> rose: is thatomething new? >> brand new for hulu. that was the first time ever live streamed.... >> rose: might youo supporting events and other things? >> we sure wou love to. there's so manyhings we' see in the future. (laughs) >> rose: i'm sure you would le to yes, you would "time" magazin cover story. twitter. >>es. i've heard of that. (laughs) rose: is that an enomic model? >> notet. and i say. i stress yet. i can tell youhat it is a business that has tremendous utility. i use it at leas 20 times a day. 's.... >> rose: wt do you useit r? >> what i do is i go to search.twitter.com and i search

fothe namehulu" ando that 0 times day. the name "hulu" gets written on twitter abou2,000 times day. is up but yo can't read 2,400 times of material, can you? >> it tns out you caas long asou look at it every 0 minutes. so iave a blackberry d look at it every 20 minutes. so i'm not the only one. almost everybody ahulu looks at search.twitter.c for the word hulu. and the reason why wedo it is it that it i realtime feedback on theuality of customer experience we're delivering. so we're able to knowif we're doing something right and double down on it, we're ableo know if we misspelled a word. rose: you'll kno itantly. >> instantly. so at1:45 at night i'll see a tweet about, say, a word that was misspelled, fo example, on the web site, and i'll be able to send that to our c.t.o. eric and hend i will have a conversationt 11:47 and t te will beixed by midnight. that a 15-minute turnaround where wiout twitter that wasn't possible. it's an amazing transpancy

engine. >> rose: what will twitter be in these years? >> my pdiction is that in the same way thagoogle is an intent revealing service that can be mob tiesed that w, i would think that if were at twitter, i wou focus on the serge searches a pegt of twitte because people are revealing intents. that's very valuable to marketers. so i just comnting as a sideline observerof it, b there's something vaeable in e fact that i'm using it, quite frankly, far l of searches where befe i do not. >> rose: it is interesting phenomenon. we're talking ant hulu, twitter is on thcover of "time" magazine, we did a show with them. it is... theevel of curiosity about al of these things, ether it's youtube or twitter or hulu or so many other new ternet expressions is extraordary. >> and it's beyond... i mean, clearly it is the prince of the youn but is expanding in a... i

find just a fascinating number of ways. not just i terms of the ias buin terms of the consumers. >> there's no better time tobe living, i think. i'm biased, of urse, but we live in interesting tes and a a person that has this odd combination of technology passion and media pason, this is best. this is the golden age of media, i think, because it's leveragintechnology to make it betr and easier to consume. it gets ck to that impulse business. >> rose: fally, two things, someone at you'rein town because yo received an award and jeff zucr received an award at the american jewish federation. humanitarian wd and other things. >> it was veryumbling to say the ast. i'm a complete novic at an event like that and to walk into a room and to just see the typei of peoe there and to be able to hav my name mtion with jeff zucker's it... yo know, i ew my mom up it was so special and she got a kick out of seein that. >> rose: and brought h here.

>> i sure d. she's right inhe green room. >> rose: thank you. thank you for joing us, e yonext time. captioning spoored by roseommunications captioned by media cess group at wgbh access.wgbh.org