TWiT 184/Transcript

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Info.png This is a transcript of TWiT 184.

Episode 184


This transcript is provided by our friends at Pods in Print

Leo Laporte Bandwidth for this WEEK in TECH is provided by AOL Radio at


This is TWiT, this WEEK in TECH, Episode 184 for March 2, 2009, Hard Times For Hard Copy.

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Leo Laporte This is TWiT, this WEEK in TECH. We’re going to cover a lot of ground today, so I’m going to get going very quickly introducing our panelists, and a great panel assembled today for the show. Starting with my friend, Alex Lindsay, who is in studio with us, from the Pixel Corps.

Alex Lindsay Hello.

Leo Laporte Good to see you once again, Alex.

Alex Lindsay Good to be here.

Leo Laporte Right after the show today, we’re going to have a live concert. Alex is bringing Peter Himmelman in to perform for us. That’s going to be fun.

Alex Lindsay Yes, I was excited. You were on the show. I guess you were on his show.

Leo Laporte Yes, he does a show on Ustream called Furious World.

Alex Lindsay And I mentioned that I really enjoyed his music, and next thing I know he is coming up. He is…

Leo Laporte He is doing a concert in your backyard.

Alex Lindsay Yes, he is coming – I think it’s raining here. So I think he is going to do it in my living room.

Leo Laporte See that’s something Bono never did for me. I told him many times how much I liked his work but nothing, nothing at all.

Alex Lindsay Yes, so I think we’re going to be streaming live from my living room later this evening.

Leo Laporte Awesome.

Alex Lindsay So it should be fun.

Leo Laporte Also with us from it’s John C. Dvorak, the world’s most prolific computer columnist. Hey, John.

John C. Dvorak Hey, there I am.

Leo Laporte There he is, in your clown wig.

John C. Dvorak I’m supposed to have that big finger or something that goes back and forth that…

Leo Laporte “We’re number one; we’re number one”

John C. Dvorak …you sit in the front row at a baseball game, whatever happened to that guy.

Leo Laporte Also with us from the Houston Chronicle, and I think a good time to have him on because he is a Hearst employee, Dwight Silverman.

Dwight Silverman Yes and I would like to keep it that way, Leo, so…

Leo Laporte Well, we shall see, I mean I don’t know if you are going to have the option. We’re going to talk about it. This is the week that newspapers kind of started – the beginning of the end, I think, in some ways. Also…

Dwight Silverman Oh, I don’t, I don’t, I hope not.

Leo Laporte Well, good. Well, this is good. This will be a good topic. I hope not too. I love my newspaper. Denise Howell is on vacation. I am so jealous. She is at Indian Wells enjoying the fine weather but she has consented to join us in her bikini, and it will be a first, I think, we have never had a TWiT panelist in a bathing suit.

Denise Howell Yes, I think I am the only one not on video and that’s no accident.

Leo Laporte Well, we tried. You can’t say we didn’t try. Hi, Denise. Denise is the host of, of course, This Week in Law, and she does the Lawgarithms column and, what is it, Blog and Baggage, which I love.

Denise Howell Bag and Baggage.

Leo Laporte Bag and Baggage, which I love, and has a new page,

Denise Howell Yup.

Leo Laporte It’s your Channel Dvorak.

Denise Howell My lame attempt, yes.

Leo Laporte [3:39] So, we’re all here to talk about the end of times, actually. This was the week that the Rocky Mountain News halted publication. I think really upsetting. I think a lot of the employees there, they said, “Well, you didn’t even try to fire us first.” “You didn’t even try to cut down.” The guy in charge said, “Well, we could have cut the newsroom in half and it still wouldn’t have saved us, even if we have a 40% increase in online revenues for the next five years, it still wouldn’t have saved us. We’re essentially out of luck”. The San Francisco Chronicle, not the Houston, the San Francisco Chronicle also announced 50 million dollar a year losses and they said, “We have got to do some – the Hearst Corporation, their owners, said – we have got to do some severe cutting or we’re going to have to sell the operation.” Something similar to what they have said in Seattle on the Post-Intelligencer, where they said, “We’re either going to find a buyer or we’re going to shutter the doors.”

Alex Lindsay Well, the question is who would buy a standard newspaper these days.

John C. Dvorak Paul Allen.

Alex Lindsay Right.

Leo Laporte He’ll buy it for the tax deduction. But you have a dog in this hunt, Dwight Silverman, because you work for the Hearst Corporation.

Dwight Silverman Yes, and the Houston Chronicle is not quite in the shape that the San Francisco Chronicle is. We are looking at some layoffs sometime in the next, probably 45, 30 days, and so, we already had some, at the end of last year, newspapers essentially are trying to get their staffs and their operations down to meet their revenues, which are declining. The print revenues are dropping because of the economy and other factors, and the web revenues aren’t going up fast enough to meet them although growth is pretty good on the web. So it’s a real sticky situation and a tough time to be in the business.

Leo Laporte What’s killing the newspapers?

Dwight Silverman I think it’s a variety of things. I think kind of the economic seesaw that mention, that is the cost of video, I mean the cost of the web versus print ads, it just doesn’t make up for it. Print ads are a rarity. They are few and far between because of space, but on the web they are a commodity, and so you just can’t charge as much for them. So far, what we have been trying to do is generate as many page views as you can to put ads on them but the value – that causes the value of the ads, you know, to go further down and, of course, in an intense economic recession, I like to call it an economic tesseract. It…

Leo Laporte Which is, by the way, for those of you who don’t know, a fourth dimensional cube.

Dwight Silverman That’s right, and the reference, actually, that I like, is from Madeleine L’Engle’s A Wrinkle in Time.

Leo Laporte Yes, A Wrinkle in Time…

Dwight Silverman Because it kinds of feels like we’re going back in time through this fourth dimensional cube, economically speaking.

Leo Laporte Is it no coincidence, or is it a coincidence that the Kindle 2 came out this week. John, you think that that’s part of what’s going on?

John C. Dvorak Nah…

Leo Laporte Nah.

John C. Dvorak The fact of the matter is the newspapers have been in a slide since the advent of TV news. It has been a slow decline and it was accelerated only recently but they were sliding years ago, before the web. And then now, what the web has done is it has pointed out a couple of – well, there is a couple of things, in my opinion, that are problem. One, I think the newspapers aren’t providing a quality product to their readers and, in fact, if I was – I am looking at the Rocky Mountain News site right now, and they have their covers all online and I am looking at these covers and they suck. I don’t see any reason I’d buy this newspaper if it was on a newsstand. Only one of these covers is interesting but the rest of them are just, like, boring.

Leo Laporte It was a tabloid paper, right? There are two papers in Denver. So, I mean I don’t there’s any markets except New York City where you could support more than one newspaper, can you?

John C. Dvorak I think it’s always possible but not when these papers are so dull that nobody cares but anyway, let me bring in a couple of interesting factors beside the fact that the papers are crappy products and, of course, then they cheapen them as they have to do cutbacks. They don’t put more money into them, they take money out of them, which makes it worse. But it seems to me that what’s always been overlooked and what I think the web-managed to point out to everybody is the redundancy of news. I mean if you are a newspaper and all you do is run AP stories and stuff that you’ve syndicated from the New York Times or even your own syndicate, and everybody and their sister that’s in the syndicate runs the same stories, and if you go on the internet and you see nothing but redundancy, you say “What do you need all these newspapers for?” I think there is just too many. There really only needs to be a few national newspapers and some local newspapers, and these kind of quasi-national papers, which would include the Houston Chronicle, which really only sell into a small and moderate-sized area. I think they are all toast.

Leo Laporte The Chronicle has 330,000 subscribers, the 12th largest newspaper in the country. Is it gone?

John C. Dvorak The Chronicle?

Leo Laporte Yes, not Houston, San Francisco.

John C. Dvorak Yes, it’s toast.

Leo Laporte It’s toast. Which means San Francisco will not have a daily paper.

John C. Dvorak Yeah, they got a couple of these, these free ones.

Alex Lindsay The Examiner still….

Leo Laporte The free ones. Great.

Dwight Silverman Well the one that’s happening in San Francisco is that Hearst has told the unions that it wants serious concessions and is talking about some serious cuts in terms of staffing and they have to get to a certain amount before they can achieve it. They have said they will close it if they can get to that, but it’s also interesting to look at what’s happening in Seattle where it looks like they are going to go with an online-only version. And I am not in the loop in terms of Hearst Corporate. I don’t know anything more than kind of what you read in the newspapers. That’s ironic.

Leo Laporte Or on the blog.

Dwight Silverman Or on the blog, but I am really intrigued by what’s happening in Seattle. I was kind of hoping like that would happen a long time ago. I think Seattle has an opportunity to be a real, a test bed for an online-only newspaper where the brand is primarily promoted by a website, as opposed to print, and I wish that Hearst would do that in San Francisco but I don’t know that the economics are there in that paper.

Leo Laporte Denise, you’re in beautiful Indian Wells with your husband. You’re enjoying a beautiful Sunday. Did you sit down to brunch with the Sunday Times and take hours leisurely reading it?

Denise Howell No, not brunch but we do get the paper every day.

Leo Laporte I love my Sunday paper.

Denise Howell Yes, and we’ll go out and get it if it’s not delivered to the house. That’s mostly driven by my husband, I am a paper reader because it’s here.

Leo Laporte We subscribe to the local small-town paper, the Argus Courier, which comes out on a Wednesday. It’s owned by Times Corporation. We subscribe to the Sunday Times and we subscribe to the San Francisco Chronicle. And, on my Kindle, I subscribe to all the same stuff, including – plus the New Yorker and the Atlantic and the Salon.

Alex Lindsay [11:03] Do you like reading it on the Kindle…

Leo Laporte No...

Alex Lindsay …as opposed to reading it in the paper?

Leo Laporte …and you know what, this is where it’s galling me. I love the Kindle. I am very happy with the Kindle for reading books, but it is not a satisfying experience for reading a newspaper, and…

Denise Howell Why is that?

Leo Laporte There is something about browsing a paper that is a very different aesthetic experience from reading sequentially page after page on a book. A paper is meant to browse. I think images are important. I think scanning is important and the physical, tactical side of it. So, Denise, you are not one of those people who feels – I just, I thought that maybe you were a Sunday paper kind of person.

Denise Howell I am a Sunday paper kind of person but only because somebody else is going to the effort of putting it in front of me. Yes, I mean we subscribe to the paper at home. I am looking forward, actually, to getting the new Kindle, because one of the papers that’s going to be on there is the San Francisco Chronicle, and I just, like you said, I don’t regularly go and check out

Leo Laporte No, it’s not the same…

Denise Howell I used to live in the Bay Area and I do miss that paper, it just, it has a unique flavor all its own and I am looking forward to getting it on the Kindle. So, I am kind of hoping that it’s a better experience than reading it on the web.

Dwight Silverman One of the things about the Kindle and newspapers is that what you are getting is part of the morning edition. In other words, not everything…

Leo Laporte It isn’t the whole thing, is it? No.

Dwight Silverman Right, and it’s only delivered once. What kind of irritates me about newspapers on the Kindle is that they don’t update the news during the day. I think it would be really cool to have a device that you could carry around with you where, just like on the web, you got breaking news, you got things that were happening during the day. I think that’s an opportunity lost on the Kindle.

Alex Lindsay I have a device like that.

Leo Laporte What’s that?

Alex Lindsay It’s called my iPhone.

Leo Laporte iPhone.

Denise Howell Yes.

Dwight Silverman iPhone is an amazing device for getting breaking news. I have been kind of running around our news room and talking to our managers and yelling that we should be doing a lot more on the iPhone.

John C. Dvorak It’s not just the iPhone that you can get breaking news on.

Dwight Silverman Well, no but I am talking about just smartphones. I think mobile…

Leo Laporte Because it’s mobile, yes. I think that makes sense, yes.

Denise Howell I tweeted last night that I want an iPhindle.

Leo Laporte An iPhindle. Well, now, one of the stories that did circulate when the Kindle 2 came out was that maybe Amazon would be releasing this format and making, for instance, an iPhone application possible. I don’t think the form factor of the iPhone is really as easy to read, it might be ironic. You might be right, Dwight, that the iPhone is better for reading a newspaper and the Kindle is better for reading a book.

Dwight Silverman For breaking news.

Leo Laporte Yes.

Alex Lindsay And I find that I got in to the habit of going through the New York Times on my iPhone when I was in San Francisco and I took the cable car…

Leo Laporte Times has a very nice client for the iPhone.

Alex Lindsay Yes, well I didn’t use the client, I actually used their webpage.

Leo Laporte Really?

Alex Lindsay And I was – I took the cable car to work, and so it was really a pain in the neck to open a newspaper because it would blow and be hard to keep track of it while I was reading it and, once I got used to it, I got to a point where that’s actually what broke me away from ever going back to the paper. I got used to having this little box that had all my text in it and it’s much easier to eat your breakfast and read the New York Times on my iPhone than it was using a newspaper.

John C. Dvorak Well, there’s also some – I am sorry but there is sort of a green irony here. The newspapers have largely promoted the idea of conservation and going green and all the rest of it, and when you look at surveys about why people stop subscribing to newspapers, a lot of it has to do with the fact that they don’t like to waste all that paper.

Leo Laporte I admit it, I feel really guilty. And we recycle it.

Alex Lindsay New York times, 70,000 trees a week.

Leo Laporte Oh, my God. I mean I feel guilty when I see that big stack of paper, and the truth is the other reason you feel guilty is you only read a fraction...

Alex Lindsay Right.

Leo Laporte …of what that paper represents. So it really is a waste.

Denise Howell Right and the Sunday paper, I mean for all the good stuff that comes through sitting down with the Sunday paper, all the advertising that you have to throw away when you have that paper is just disgusting.

Leo Laporte Yes. Well, that’s how they were making their living. I am going to submit that there is really three things that killed the daily paper: ink, paper and Craig Newmark. I mean if you don’t have Craigslist – Dwight, am I wrong on the economics of newspapers but wasn’t the classified ad what kept newspapers alive and without that can they survive?

Dwight Silverman There is a real interesting illustration of that. You’re right. In the ‘70s when the kind of Rust Belt was falling apart, people were moving to the south, The Houston Chronicle and the Houston Post’s classified sections were incredibly fat and happy and people used to sell them on the streets of Detroit and other Rust Belt cities, just the classified sections, because they had the ads for Houston in them, we had a huge influx of people coming down in that era into Houston from Michigan and the Rust Belt

But what ultimately has happened is yes, the internet, I wouldn’t say just Craigslist, I think Craigslist had a real impact in San Francisco, less so in other parts of the country. But the internet in general and ways of being able to distribute goods, including eBay, I think, wound up cutting into classifieds terribly. And it’s now very thin, I mean, you look at the classifieds section in our paper now versus what it was in its heyday in the ‘70s and it’s just astonishing.

Leo Laporte What about…?

John C. Dvorak They were putting too many eggs in that classified basket, let’s face it.

Dwight Silverman Oh yes, I agree, I agree.

Leo Laporte What about – really the bigger issue, which is news gathering, they are all saying we can’t afford the big news room. But I look at Drudge, you even look at The Huffington Post and mostly what they do these days is aggregate mainstream media, they are not doing much journalism on their own. If you get rid of the news rooms, if you get rid of the investigative reporters, don’t we as a democracy suffer as well, and when I say we, the U.S. but worldwide doesn’t – doesn’t the world suffer without a free press.

John C. Dvorak I think it’s already suffered. People have already talked about the foreign correspondents are all gone. They’ve been gone for decades.

Leo Laporte That’s true.

John C. Dvorak They pulled them and they pulled – and they don’t have resources for these investigative reports. We’re living in a dream world if we think the stuff even exists anymore. Now it’s just re-doing Associated Press stories, Reuters, whatever else you have.

Leo Laporte That’s a good point. They’re just taking the fees. So is it Reuters that’s got the big news room?

John C. Dvorak Reuters does have a big news room.

Leo Laporte Maybe that’s the solution. Denise what are you going to say there?

Denise Howell I’m going to say, I think of it as kind of parallel to the music industry, the impulse to do journalism certainly hasn’t gone away.

Leo Laporte Yes.

Denise Howell Just like the impulse to be a creative musician, but the business models are all in flux and the older ones are falling apart and the new ones are being figured out. And what I was going to say about The Huffington Post, for example, that’s interesting is they do give a forum for some unique individual voices that you wouldn’t see in mainstream media.

Leo Laporte True.

Denise Howell You have Esther Dyson reporting in from space camp in Russia and just random things that I think are fascinating examples of citizen journalism or individualized journalism that are trying to find their way into this new business model.

Alex Lindsay And I think that – I completely agree, I think that the issue is you are going to end up with less of a professional class of journalists that are more syndicated. So there’s less writers writing about the same thing. Right now…

Leo Laporte Where do Woodward and Bernstein come from, these – in the future? Who is going to pay for that?

Alex Lindsay Well I still think that you are still going to have national brands of people who are writing that are going to end up exposed to a lot of markets because…

Leo Laporte More markets.

Alex Lindsay …because the markets will be – I think that having a local reporter reporting on national or international news will become less and less common because it doesn’t – you just don’t have the money to do that. But I also think that you are going to continue to have this exploding blogosphere where people are able to put stuff up that isn’t necessarily as refined. But this is the same thing we hear every time there’s a revolution. Everything turns over.

Leo Laporte It’s disruptive. Yes.

Alex Lindsay When I was working at a cable network learning how to do pre-press, learning how to do computer – and I have said this before, that the art directors were lamenting these interns that were getting paid 4.50 an hour and taking away their work and that the art direction was going to go to hell in a hand basket because of all of this. And it was bad for a couple of years, as people figured all of that out, but then something else came up and replaced it and I think that we’re going to see that happen again, I don’t know exactly how long it will take but that – it’s exactly the same thing.

Dwight Silverman I wanted to take exception to something John said about local investigative reporting, I think that’s still being done in a lot of markets. Last week we had a federal judge plead guilty to charges of sexual harassment of his staff as a result of stories that we had done in our paper and that – stories like that are being done in major cities and newspapers all the time. The Rocky Mountain News was known for that kind of thing. So I think that that type of journalism is still going on.

Leo Laporte Well who is going to do it in Denver?

Dwight Silverman Well in Denver there is The Denver Post, I don’t know what…

Leo Laporte That’s it?

Dwight Silverman …their reputation is – right. But that’s more than zero.

Leo Laporte Yes, one more than zero. It’s close to zero.

Dwight Silverman One more than zero, close to zero. And I think that – you know, one of the things that we’re doing at The Chronicle is we are trying to provide a platform for the community to cover itself. We allow people to set up blogs and we have recruited people to write about, kind of, their niches, that’s not investigative reporting, but I think that the future of newspaper is to, kind of, find a way to let the community tell its story.

Our traditional past mission has been to go out, get information, compile it, make it understandable and then present it to people and I think now what we have to do is, kind of, go on to the web, go to where people are talking and writing about themselves and doing video about themselves, organize that, compile it and make it understandable to the community, help the community cover itself.

That’s the way I think that we can, in the long-term, go in and provide the coverage that people want in a city from a newspaper.

John C. Dvorak [21:55] So, Dwight what are you going to do after The Houston Chronicle folds?

Leo Laporte Are you going to write a blog?

Dwight Silverman I don’t think that The Houston Chronicle is going to fold. We’re in relatively good shape, compared to the rest of the country. But, yes, I mean, if tomorrow I had no newspaper, I own and I have a few good – other catchy little domains that I’m thinking about. And I would throw up a blog and just go after it.

Leo Laporte I think now is the time, Dwight, I mean would The Chronicle let you do that, would it let you pursue that?

Dwight Silverman Not independently and being – having The Chronicle’s brand behind me is pretty powerful. I make a phone call, I get it returned. That’s kind of the best….

Leo Laporte I just use as a model what I did, because I’ve been through media downsizing and at every stage I think it’s really great if you can transfer the brand to the new media before the old media disappears. It’s a very – just from my own experience, it’s a very useful thing to do.

Dwight Silverman Well and probably one of the best examples of that recently is Harry McCracken.

Leo Laporte Yes, yes.

Dwight Silverman And his Technologizer blog. He started that from scratch and…

Leo Laporte He was still at PC World when he did, too, wasn’t he?

Dwight Silverman No he had already left. He left, he kind of disappeared for a little while and then he came forth with it. I talked to him about it at CES and I think he’s making a go of it. What’s funny is the same day that he quit from PC World, he closed on a new house.

Leo Laporte That’s brave.

Dwight Silverman That’s a leap of faith.

Leo Laporte That’s brave.

Dwight Silverman And so he – I think it shows that you can still do it.

Leo Laporte I want to take a break, Hearst – one of the things that’s happened is that Hearst has announced its own Kindle. I want to talk about the prospects for that, also about Kindle 2, I’ve got one here, I’ll play you the voice. But before we do that I want to mention a brand new sponsor on the show, and really welcome – I’m actually thrilled to have these guys onboard.

It’s a company called SquareSpace at I know you know about them Alex. It’s kind of funny because Alex and I both looked at this independently. And I am blown away.

Alex Lindsay Yeah, It’s a – it really is the next generation, in a lot of ways, of blogging.

Leo Laporte It’s hosting.

Alex Lindsay It does the hosting.

Leo Laporte Fully hosted, so you are not doing the geek stuff of installing software, you’re not – but, boy you get really great functionality, you get the ability to scale very well, in case you get dug.

Alex Lindsay Right and also you get – you are able to, there’s tons of widgets that are pre-built and there’s no code. It’s not like, “Oh, I’ve got to cut and paste some code over…”

Leo Laporte No, it’s drag and drop.

Alex Lindsay It’s literally – I just, I open up my template, I drag something, I want to make sure that this thing is orderable via Amazon, I can input my affiliate, I can add things to Digg me, I can add all that stuff, all the things you would normally want on a blog are all just kind of built into it. I did some research because we almost went with it with TWIP and then Scott had his own people.

Leo Laporte Scott wanted to do his own thing, yeah.

Alex Lindsay But he had his own capacity.

Leo Laporte You know, as somebody who has run now, a bunch of my own WordPress blogs, we are moving the corporate blog over to it. I am looking at moving Leoville over to it. There is a real advantage to not doing it yourself. They’ve got a server…

John C. Dvorak Let me interject since we’re plugging this guy.

Leo Laporte Yes

John C. Dvorak One other thing I think people should know out there is, is it actually employs a kind of dynamic CSS…

Leo Laporte It’s very cool.

John C. Dvorak … which is very interesting to play with, instead of having [inaudible] and you can import your own code if you want to.

Leo Laporte Oh yes…

John C. Dvorak And it’s not like it keeps you locked out, but it’s got this dynamic CSS, it is quite fascinating. I’ve never seen anything worked as well. This WYSIWYG design – it’s quite unique, on the fly while you are live.

Leo Laporte Well yes, let’s say you decide I don’t want that column to be so wide, you drag it.

Alex Lindsay Yes.

Leo Laporte It’s really – these guys are really doing some very – it’s a Yahoo! Interface Builder, I asked a little bit about the underlying technology. They are doing some very interesting JVM stuff, some virtualizing in the servers so that they can throw more servers in place and it spreads the load balances across all the sites, a huge value to using people who are using state-of-the-art technology as your back end. I mean, I like having my own back end. I like having the root log in, but I got to tell you, I have learned my lessons.

We found that today that we are offline for eight hours, my blog was offline for eight hours, because somebody at the server had kicked an Ethernet cable loose, so SquareSpace is sounding better and better. Take a look at it, you try it for two weeks and get 10% off if you decide to stick around your new account at I’m going to tell you the most important thing to you and certainly when you are doing the trial, it will automatically import WordPress, Blogger, MovableType, TypePad and export it. And I was so impressed by this. It is not one of those roach motel sites where you get your data in and you can never get it out again.

They have from day-one had complete data portability in and out. If you’re a photographer, this is why TWIP should have used it. The photo gallery templates – unbelievable. Incredible templates, widgets for Google Maps, built-in search engine optimization, website tracking, permissions, that’s what we’re going to use it because we have multiple editors; the cloud architecture is just mind blowing., you are going to hear more about them on the TWiT shows, I’ve just become a really fan of this and if you’re looking at a place to host your blog, to do a blog that looks gorgeous easily, quickly and affordably, and we thank them so much for becoming a part of the TWiT family.

I’ve talked for a long time to Anthony and Dane who are the guys behind it. It’s really – they are young guys, it’s really kind of neat what’s going on out there.

All right let’s talk about – I have a feeling I can almost guess John’s reaction to the Hearst Corporation saying, we’re going to do a Kindle, ourselves. What do you think, John?

John C. Dvorak [27:47] You’ve already guessed my reaction, why ask? It’s idiotic.

Leo Laporte Okay, thank you I’m right.

Denise Howell It’s fun to hear you say it, John.

Dwight Silverman It just sounds better coming out of John’s mouth.

Leo Laporte Why not do their own? They are making – it’s going to be a larger format, right?

John C. Dvorak Why are they spending their time on this sort of thing? I mean, let’s face it, if you go back to the argument of the contents stink in these newspapers and the mag – and the things aren’t compelling and they are not doing a very good job and they have cheapened the product and this and that and the other thing.

What is going to – that’s not going to change whether you have a Kindle like device or not, and I don’t think the typical newspaper readers, especially the ones who are still subscribers, who really like what you sell, Leo, I in total agreement with this, when you have a newspaper you browse it in a funny kind of way that is very unique to newspapers. This device – you might just want to read the headlines on you iPhone. It’s the same thing, only bigger.

Leo Laporte They say that while it’s going to be black-and-white, because you really stuck with the E Ink that’s black-and-white right now. They do want to go to high resolution color, they want to do video. Now, remember, Hearst doesn’t just own newspapers, they own a lot of magazines.

Alex Lindsay And also the one thing to note, this isn’t a Johnny-come-lately kind of reaction. They invested in E Ink quite some time ago.

Leo Laporte Also this is their technology.

Alex Lindsay This is the – yes, the technology that’s being used is, over ten years ago, they invested in E Ink.

Leo Laporte I didn’t realize that.

Alex Lindsay So, they have been playing this game for quite some time.

Leo Laporte But they are a little late to the game. I mean, Amazon’s there. Sorry.

Alex Lindsay I think that the thing they are looking at also is that they are trying to be more flexible with the business model. Both Amazon….

Leo Laporte They want to make an open device.

Alex Lindsay Right, so basically it allows – they are going to allow magazine companies and newspaper companies to define how people pay for it, how they – so on and so forth, rather than taking Amazon and what will sure to be an Apple reaction when Apple eventually does this. This is the way it gets done. This is the way it is distributed.

Leo Laporte Right.

John C. Dvorak Ugh. It’s a loser, it’s a money loser, it’s going to be a big time – you might as well just buy a big yacht and throw money into it.

Leo Laporte Denise do you have a Kindle, you have a Kindle, don’t you?

Denise Howel I ordered mine last night.

Leo Laporte So, this would be your first Kindle?

Denise Howel Yes.

Leo Laporte And what put you over the top?

Denise Howel Both Ernie Svenson, who is a frequent guest on TWiL, and Robert Scoble gave the new version rave reviews and when they both like something I’m bound to like it.

Leo Laporte I’m going to go out on a limb, I think this is the – this is to publishing what the iPod was to the music industry. I think it’s actually – the first one was not, the first one was the Pontiac Aztek of reading devices.

This is elegant, it’s slim, it solves a lot of the UI issue, Alex is eyeing at right now – solves a lot of the UI issues that I had with the first Kindle, the page turn is faster, you don’t accidentally press buttons.

Alex Lindsay The screen isn’t – I can’t…

Leo Laporte 16 grades – you can’t touch it and you do want to touch it, don’t you, Alex?

Alex Lindsay After you’ve been trained by the iPhone…

Leo Laporte We’ll turn it on for you.

Alex Lindsay ……to touch it.

Leo Laporte Want to hear the reading, would you like hear the reading a little bit?

Denise Howell Sure.

Leo Laporte Right.

Denise Howell I’m curious about the reading because – did you guys see Wil Wheaton’s comparison?

Leo Laporte No, what did he say?

Denise Howell He – there was that whole thing that came out last week about whether they were going to be permitted to do….

John C. Dvorak The Authors Guild made a stink.

Leo Laporte The moronic Authors Guild said, you’re going to kill our audio books.

Denise Howell Right, to which …

John C. Dvorak Not to mention the fact that how you are going to kill audio – you already bought the book.

Denise Howell So, Amazon caved on the fair use issues which isn’t surprising since the fair use is basically just an invitation to litigate the issue.

Leo Laporte I have a theory on this whole thing. Let me play for you, I’m going to – John, you are going to be muted for a minute, I’m going use your microphone to plug in Mr. Kindle and now ladies and gentlemen the dramatic reading from Masters of Doom. This is the story of the id guys John Carmack and John Romero, how two guys something, something, something, dot, dot, dot, ellipses.

But the way this is very slow, I’m stalling.

Amazon Kindle 2 (female) Just then, dum, dum, dum, dum… Romero mimicked these video game sounds the way other kids did celebrities.

Leo Laporte That’s the female voice.

Amazon Kindle 2 (female) Fun like this was worth risking everything; the crush of the meteors, the best of the paper route money, the wrath of his stepfather – because no matter what Romero suffered he could always escape back into the games. At the moment, what he expected to suffer was a legendary whipping.

Leo Laporte Now, I’m going to play the male voice which I think is maybe marginally easier to understand. But it’s – this is a computer voice, this is – there’s no question.

Amazon Kindle 2 (male) Dum dum dum dum. Romero mimicked these video game sounds the way other kids did celebrities. Fun like this was worth risking everything; the crush of the meteors, the best of the paper route money, the wrath of his stepfather –

Leo Laporte So, I guess…

Denise Howell The male voice has more inflection.

Leo Laporte Yeah. It’s still kind of a mechanistic inflection. But there is some inflection to it.

Denise Howell Yeah. So, Wil Wheaton did this interesting side by side test where he – his theory that he was positing, and I think it’s where you are going by playing this for us from the Kindle, is that there is just no comparison…

Leo Laporte No.

Denise Howell …between a mechanized voice and a human voice and so he read from his book, Sunken Treasure, and then he had his Mac’s text to speech generator which he was told was sort of like the Kindle.

Leo Laporte It’s actually a little better, but it’s roughly the same. Yeah.

Denise Howell Yeah, the Alex voice he picked.

Leo Laporte Right.

Denise Howell And had that read, and I got what he was saying that certainly it’s better to have a person read but the machine-read version wasn’t bad. And in a pinch, I would definitely do it. And unfortunately, Amazon has sort of left us in that pinch because, getting audio books onto the Kindle isn’t all that easy, especially if you are on a Mac, right? Because you have to…

Leo Laporte You have to use the audible software. I don’t even know how you…

Denise Howell Right, I think – and I think on the Mac, and I found an article, it was from a year ago, so maybe this has updated since then, but it was on Rexlog [ph] grousing loudly about the fact that if you have a Mac you are out of luck because the audible software that works with the Kindle is PC only.

Leo Laporte Well, I got an iPod. I really don’t care about putting audio books on the Kindle but – which will kill the battery life, in fact, reading kills the battery life. So, I don’t – I think this is more like, I am reading a book, I have to get in the car, I’m going to turn on the audio, so I can continue to kind of read along.

Alex Lindsay And I think the Amazon’s issue right now is they can’t afford to lose trajectory. They need to like just be streamlined about launching this new application and not have a lot of hubbub. I think one passive aggressive way they could handle this is to make sure that it’s very clear when you are ordering a book from the Kindle but it’s not audio enabled.

Leo Laporte That’s exact – you hit the nail on the head.

Alex Lindsay Big button.

Leo Laporte They are doing it passive aggressively. Here is my thesis, first of all, within two days of the Authors Guild cavetching, Amazon backs down and says, and I know you appreciated this Denise, what we are doing is completely legal, is in – we are not in any way saying that they have any merit in their argument, whatsoever. We would win a lawsuit. We are going to be nice guys and we are going to let each publisher mark their books not for text to speech if they should so choose. Here’s my passive aggressive theory on this. How could’ve they done it in two days? They knew exactly what was going to happen. Jeff Bezos played this like a perfectly played chess match. He said, they are going to bitch. Here’s what we do. We go public. We let them bitch, we make sure everybody hears them bitch. Then we say, “okay, we’ll be the nice guys, we’ll back off” and now you’re exactly right, Alex. It’s going to make it very clear when you buy a book. This may not be read out loud and nobody is going to buy it.

Alex Lindsay Yeah, exactly. I would just skip right over it.

Denise Howell Right.

Dwight Silverman Now, would you – would you really skip right over it because you couldn’t listen to it?

Alex Lindsay Yeah. I don’t really like to read.

Leo Laporte Denise, they’re right though, there’s no legal merit in the Author Guild’s point of view.

Denise Howell [35:52] Well, I guess that’s where I was going a second ago, is, you’re into this fuzzy area of fair use. Wil Wheaton’s point was there’s really no difference. You’re not taking away from the market for audio books because people are always going to want that human reader. There’s just no comparison. And actually when I heard his side-by-side thing, I went, you know, I wouldn’t mind having Alex read me a book.

Leo Laporte That’s interesting.

Alex Lindsay And in – the one thing that I will say is that we are – this is still voice text-to-speech is still very early on…

Denise Howell Right.

Alex Lindsay …and that I can’t see five years down the road, 10 years down the road, getting to a point where I may not really care and if it was a lot less expensive if I only had to pay the reduced cost of the book and get the audio for free, I can see where the authors are trying to draw a line. But I think that they are going to lose this one.

Denise Howell But as far as what you are saying a second ago, Leo, I think you’re dead on it. But Amazon may have been pretty crafty in the way they did this. Ray Beckerman, who is the RIAA versus the people lawyer. He represents a lot of defendants in those cases, had a comment on Slashdot where he said, “Amazon showed this threat for what it was: extortion.”

Leo Laporte Yeah. I think he was very – if I were in a cricket audience I would applaud politely and say, “well played. Well played, Amazon.” It was pretty clear that Jeff knew exactly what – how else would he been able to say within two days, “okay, we’ll turn it off?”

Dwight Silverman Yeah, they obviously had that capability already built into it to do it. I don’t know if I haven’t seen any – has anybody seen any books yet that already have the audio turned off? Has anybody spotted that? Who has a Kindle – I have got a review Kindle and the...

Leo Laporte No, no, no, I haven’t at all, no.

Dwight Silverman Yeah, don’t see that. And what if you already have it? If you already have the book on your Kindle, I have got about four on the review unit they sent me…

Leo Laporte Yeah, I guess there’s nothing we could do about that.

Denise Howell You’ve got to be grandfathered in.

Leo Laporte You’re grandfathered in.

Dwight Silverman Yeah, yeah. The one thing about the Kindle that bothers me still is the pricing. I think it’s still way too expensive to become a mass device.

Leo Laporte I agree.

Dwight Silverman It needs to come down to about 199 or less in order to – I think, to really take off.

Leo Laporte And it’s U.S. only, which really – now that’s because publishing is such a crazy quilt of national jurisdictions and I don’t know if they’ll ever solve that. We’ve learned…

Dwight Silverman And Leo, you mentioned earlier that they had – that there was some hinting that they were going to do – allow you to read it on your iPhone and in the initial announcement, when they were talking about the capability that the new Kindle has to, kind of, if you have two Kindles and you stop reading a book in one place, you pick up the other Kindle.

Leo Laporte Right, right, I love that.

Dwight Silverman If they mention or on other devices.

Leo Laporte Right.

Dwight Silverman And, and I know that if I don’t own a Kindle and there’s an iPhone application that lets me do that, I will get the iPhone application and skip the hardware on the Kindle unless version 3 is just dramatically better and dramatically cheaper. I would read it on my iPhone.

Leo Laporte John, would you ever buy a Kindle?

John C. Dvorak No. I don’t buy anything anyway if you haven’t noticed. Now, if I was going to buy it, I think it needs a $99 price point.

Leo Laporte It’s way – well, I don’t know about 99 but I think you’re right. I think –

John C. Dvorak What’s wrong with 99?

Leo Laporte Well, I don’t know. But I’m sure that – I don’t know. Do you think it costs more than 99? What do you think it costs to make this thing?

John C. Dvorak Well, probably the way they’re making and obviously what are they charging for it, 250, 300?

Leo Laporte $359.

John C. Dvorak Then it’s probably costing in bag of parts around 70, $80, maybe.

Leo Laporte Then they could charge 99 because they are making money on the books.

John C. Dvorak They’re not going to make any money. They have to get the bag of parts down to $25 but that means the screen mainly.

Leo Laporte All right. So, what about $150? I think that would be a sweet spot.

John C. Dvorak $99. There’s your number.

Leo Laporte All right.

Dwight Silverman Well, they brought down…

Denise Howell I kind of like a comparable to iPod price because, Leo, you said a bit ago that you have your iPod for audio books, I could see my Kindle replacing what I use my iPod for mostly which is audio books and podcasts.

Leo Laporte Right, right.

Denise Howell If I could – that’s sort of my legacy device I carry around, with me right now is my old video iPod. I have my iPhone. But I can’t put all that stuff on it because the iPhone memory is too small.

Leo Laporte It’s only max only 16 gigs.

Denise Howell And plus it kills the battery on your phone.

Dwight Silverman You know what – and what’s interesting to me about both the Kindle and the iPhone is that there’s kind of a tradition in electronics that they will – electronics makers will sometimes continue to sell an older version of something at a lower price. They didn’t do – Apple didn’t do that with the original iPhone – they could’ve sold that for 150 and made it the older, cheaper model and Amazon did not do that with the Kindle. They could have continued to make kind of the bigger clunkier one and sold that at, say, $200.

Leo Laporte Yeah. I am surprised they didn’t do that, actually. But you know, there’s a real question whether there’s any incentive for them to do a cut price anyway since they can’t seem to make enough to sell anyway.

Dwight Silverman They also have to pay for the bandwidth because it rides over the cell phone network.

Leo Laporte Don’t you think they build that into…

Dwight Silverman It’s a 3G network too.

Leo Laporte Don’t you think they build that into the price of the book? I would – if I am…

Dwight Silverman It’s built into the hardware.

Leo Laporte Okay. Because if I am – the books are cheap. Yeah. But – okay, so here’s – so John you’re probably better at this than I am. But as I remember the normal cut that a book publisher takes from the bookstore is 50%.

John C. Dvorak Well, it’s between 40 and 60 depending on the book typically.

Leo Laporte Okay. So, that’s presumably the same deal they make with Amazon. So, if Amazon is charging 50%, they need to charge a little more obviously than is costing them for the book, but the publishers don’t have to kill a tree. They don’t have to print it, they don’t have to ship it. So, presumably the publishers are making a deal that is better than 40 to 60%. Amazon’s charging $10 for a bestseller. What is that? That’s $25 bestseller.

John C. Dvorak What’s overlooked in the formula is the fact that the authors are getting screwed in this deal.

Leo Laporte Do the authors not make as much for an ebook?

John C. Dvorak Well, I mean, if the book is selling for $10, which is what everybody wants these things to sell for. I mean, there’s going to – there’s even a protest movement right now to boycott any books on the Kindle that are more than 9.99, and if you do a two-way – a 50% split with a retailer, so it’s $5 essentially for the retailer and $5 for the publisher and the typical royalty is 15% of wholesale, or 50% of retail, that’s going to be $1 or so. When, if they were doing a hardcover book, they would be making $5 a copy or 3, 4, $5 and like that. So they are losing about one – two-thirds of their income on these electronics books. I’m sure authors aren’t too happy about it. That’s probably one of the reasons the Authors Guild kind of made a fuss to just harass them.

Alex Lindsay But one question I have as far – I mean in the long term, is whether authors could possibly be empowered to publish directly. I mean, what do they need a publisher for when they are not having to send a book over to China anymore?

Leo Laporte That’s a good point. Why not just publish…

Alex Lindsay And if you are – especially if you are an established – if you are Stephen King or you are someone like that, why would you – why would you need –

John C. Dvorak Yes, you don’t. That’s the joke of it and in fact there should be some way of directly just – a writer should be able to put together his own book and then sell it directly to the Kindle for 9.95 and take the entire 9.95 minus whatever it costs to run the server and put it in his pocket and I think that’s absolutely where the things are going to head in some way, shape or form. It’s almost like indie music. I mean, you have all the kids listen to these weird bands you’ve never heard of. I think it’s going to go that way with the writers. I mean, I think a lot of them are going to have some trouble getting much traction, but you don’t need as much traction if you are taking all the money.

Alex Lindsay Right.

Leo Laporte Amazon’s deal with authors I am seeing in our chat room is 35%. So it’s even better. And Jeff Bezos was on with Jon Stewart on the daily show. Stewart asked this question, said, “Jeff, why do you charge so much? Why don’t you cut the price?” Bezos said, “because it costs us that much, we can’t charge any less,” which might be credible.

Dwight Silverman Amazon has its own self-publishing arm. It’s a company called BookSurge. And I wonder if there’s anything being routed directly from BookSurge into the Kindle.

Leo Laporte Well, I tell you, if I am – it’s not the Authors Guild that should have been complaining about the Kindle. It’s the publishers. It’s Pearson. It’s Random House. Those are the people who are really threatened by this device. Those are the people who are going to be disintermediated.

Alex Lindsay And if we go back to look into what Hearst is doing, an open format from Hearst would once again allow the publishers theoretically to be able to sell their stuff online directly to another reader as well…

Leo Laporte Right.

Alex Lindsay …where they don’t have to pipe through Amazon. I think maybe that’s what Hearst is seeing as an open opportunity.

Leo Laporte Why wouldn’t Hearst just jump on the Kindle? Why make your device?

Dwight Silverman Well, they are on Kindle. They are on – all the – a lot of the Hearst....

Leo Laporte All the magazines are.

John C. Dvorak Can I make a comment?

Dwight Silverman Some of the magazines and the newspaper.

Leo Laporte Yes sir, Mr. Dvorak, make a comment

John C. Dvorak I was looking on the chat room and people are talking about Lulu. Lulu is a complete rip off.

Leo Laporte What? Really? I love Lulu.

John C. Dvorak They take 15%. They take the author’s commission, just as overhead. It’s ridiculous.

Leo Laporte But they are printing it. They are shipping it.

John C. Dvorak They are – if you went out there and found – there’s plenty of people that do print on demand shipping and printing and they don’t take 15% out of the blue. They just charge what it costs.

Leo Laporte Oh, and then you charge a price over and above that to make your profit. So what about Blurb? Is that the same as Lulu?

John C. Dvorak I never – I haven’t looked at their deal.

Leo Laporte Blurb is more photo oriented.

Denise Howell It seems like people like Cory Doctorow are in a great position here.

Leo Laporte Oh, God. Yeah.

Denise Howell People who have their own audience – you had him on the show last week. He was talking about how he has the changed log between additions of what he is going to push out to the publisher. Cory could readily put his work wherever he wanted it.

Leo Laporte I read an interesting article. My daughter gets a magazine called Mental Floss, which is actually a pretty cool magazine for kids. And they wrote an article about Paul Coelho, the guy who wrote The Alchemist. And Paul is very hip. Paul is very witty. It turns out for instance that the book wasn’t selling in Russia. The Russian edition wasn’t selling. So, he put it for free, online. And it’s the kind of book I guess that gets a lot of people excited about it because it started selling – the print edition started selling. He, like Cory, has done that very counter intuitive thing which is give it away online and it’s done very, very well, the things that the book sold more than 10 million copies. He’s done very well by doing that.

Alex Lindsay Well, I think that for people in the creative field – I think lot of people…

Leo Laporte This is the future.

Alex Lindsay …and whether it’s video, but I think that there’s a really important thing of maintaining your own brand and making sure people know who you are and building your own following whether it’s on your blog or on twitter or on anything else that you are doing so that you’re affordable, so that when you publish something to Amazon or to iTunes or to somewhere else, then people know who you are, and they’ll actually go buy it because of you and I think that’s the kind of thing that we’re seeing from Cory Doctorow.

Leo Laporte Well, that’s what we do here.

Alex Lindsay Absolutely, absolutely.

Leo Laporte [47;08] I mean, really, ultimately what you’re going to do is build a community that will support you whether you are Jonathan Coultan, Peter Himmelman who is coming in tonight, Cory Doctorow, you build a community that loves your work and you bring it to him – and you bring it straight to him and you say, “hey, you like this, you support us.”

Alex Lindsay And again Nine Inch Nails is a perfect example.

Leo Laporte Nine Inch Nails?

Alex Lindsay They sold – they only – what really made the money was their limited edition. They gave the album away and had a limited edition that they made three-quarters of a million dollars on a week on because they had a strong intense following of only a handful of people.

Dwight Silverman Well, you can do that if you are an established brand but how easy is that to get started with? I don’t think we’ve actually seen yet anybody who’s kind of taken off from that as the starting point.

Alex Lindsay But where was Cory Doctorow before? Was he on – he was never on a national brand.

Leo Laporte No.

Alex Lindsay He built it up –

Leo Laporte I think you could do it. I really – Jonathan Coultan –

John C. Dvorak Yeah, I agree.

Alex Lindsay But over a very long period of time, it’s not something...

Leo Laporte I think cream rises, no matter –

Alex Lindsay Yeah. But, it might take – I mean you have to think about as like a project that might take you a decade.

Leo Laporte Yeah, it’s not going to be tomorrow.

John C. Dvorak What’s a long period of time to you?

Leo Laporte How long’s it take for Metallica, it’s...

Alex Lindsay Ten to fifteen years.

John C. Dvorak Fifteen years?

Leo Laporte Not that long.

John C. Dvorak You should be able to build a brand in 18 months.

Leo Laporte John is the king of brand building.

John C. Dvorak That’s not true, but I can tell you, it’s doable in 18 months.

Leo Laporte Everything I know.

Alex Lindsay That’s it from scratch without the help of national media, it could take… I mean, but what I’m saying is, people need to prepare for that.

John C. Dvorak If you know anything about, you know, yeah absolutely, with the internet, I don’t think it’s a problem for 18 months.

Leo Laporte All you need is Twitter, baby.

Alex Lindsay We need them to recommend you.

Denise Howell All I know is it took Mike Arrington a lot less time than that.

Leo Laporte Yeah, there’s a good example.

John C. Dvorak There you go, perfect example.

Leo Laporte Boy, is he a brand

Denise Howell Yes.

Leo Laporte Wow.

Denise Howell I remember sitting and talking with him at Stanford when he had just started doing TechCrunch, which at that time he was doing as sort of a joint project with Keith Teare for another…

Leo Laporte Who? Who’s that? Amazing.

Denise Howell Yes. No, Keith’s been around for a long time, and you know, TechCrunch took on a life of its own, and obviously by that time next year, it was an interesting conversation to look back on.

Leo Laporte It was very quick. It was a year, it was less than a year.

Denise Howell Yeah.

John C. Dvorak Yeah, I would agree. It takes you 15 years if your product is crap, you can still get an audience, but.

Leo Laporte Oh boy, TechCrunch, because it was really right on, it really covered the stories, it was the place and word spreads fast among that audience. Now that’s key is, the people who have done well with this, at least so far, have done well with the tech community because, for instance, as our audience is very wired together, or in the record industry where you have an audience that’s very, it’s already tightly knit, you know, and people will say, oh, Nine Inch Nails, Nine Inch...

So, you need that, you do need it, you know you can’t be some loosely-knit...

John C. Dvorak Well, the people have to be on a computer, that’s the key.

Leo Laporte Tech, that’s very key.

Alex Lindsay For now. And, I mean, over time, people are going to, more and more people will be on the computer but definitely the reason that we picked the shows that we started with was because we knew that those were the…

Leo Laporte Start with the tech shows.

Alex Lindsay Yeah, those were the niches that we wanted to…

Leo Laporte And now Adam Carolla is number one on iTunes because it’s gone beyond that. It’s gone to mainstream media now.

Alex Lindsay Right.

Denise Howell What’s Adam Carolla doing on iTunes?

Leo Laporte Adam Carolla lost his job. Remember he was going to be the guy who saved Howard Stern’s, you know, when Howard Stern went to satellite, he was going to save Infinity, big flop, lost his job, made a pod, I’m going to, I should be nicer because I’m going to be on the podcast on Wednesday.

And, but he has made a podcast and the funny thing is, flop in mainstream media terms does not mean much, when you go to the podcast, look at, we only have hundreds of thousands of people who listen to this show. If you are Infinity, that’s not enough. That’s, you know, when Howard Stern had tens of millions...

Alex Lindsay A broadcast TV show...

Leo Laporte But it’s fine for me, I’ll take it.

Alex Lindsay A broadcast TV show that is a flop is five million or five or six million people or less, is considered unmanageable, but if you look at a million people listening to your show, and you’re getting, let’s say, $30 CPM. I mean it’s not, you know, that’s a lot of money, your show.

Leo Laporte That’s a lot of money.

Denise Howell Does it surprise you guys to know there are only 24 magazines available for the Kindle?

Leo Laporte Yeah it does, and it’s very disappointing to me, but I have to say- the New Yorker which just recently became available in the Kindle, that was a big deal for me...

John C. Dvorak Because of the cartoons.

Leo Laporte Yeah I like the cartoons, well, I only read it for the pictures and, you know, the nudies, it’s really big for it. No, I’m a big New Yorker fan, and my problem is, we subscribed to the paper edition but between my wife and daughter, I never get to read it, my daughter will actually, and I can’t really stop her because I’m thrilled, will take it and go upstairs and we never see it again, and how am I, what am I going to say-- no, you can’t read the New Yorker until I am done, no I wanted to read it, that’s pretty good for a 16-year-old.

Hey, I want to take a little break here and talk a little bit about, audible is our sponsor and they are not going away. I got to tell you, even if you can get, the Kindle can read to you, there’s a big difference between a computer voice reading to you and a performance, and that’s what audible books really are. They are performances by some of the best actors in the world. They bring these things to life. Now, you may not know some of the names, go to, sign up for the platinum account, that’s two books a month, you get a credit towards two books, and look at some of the books, you may see the names of the readers, you may not them, believe me you’ll come to know them, it’s a specialty.

Audible’s recording studios are located near Broadway, they get some of the best actors, the best, most talented readers and these guys and gals bring a story to life. I think, this week, in honor of our newspaper discussion, our audible pick is going to be All the President’s Men, Carl Bernstein and Bob Woodward. I mean, this is what journalism to me, there was a whole generation of kids my age who became investigative journalists, became reporters, became news people because of Carl Bernstein and Bob Woodward and All the President’s Men. It was inspiring, it’s the story of Watergate, how a president was brought down by Deep Throat and brilliant reporting, and if you have seen the movie or if you’ve heard the story, it’s so dramatic, let me play a little bit of all the All the President’s Men.

This is by the way Richard Poe,

“They had run into a solid wall of riot-equipped Washington policemen who had pushed them back onto the campus of George Washington University with tear gas and billy clubs. From their balconies, anxious tenants of the Watergate had watched the confrontation, and some had cheered and toasted when the protesters were driven back…

Leo Laporte Hey, I got to also mention that the clips are often in a lower quality. They have a new format now on audible I’m really excited about it, the e-format, it is full CD quality, and I have always thought that the format before was good enough but e is incredible. I’m downloading all my books over again in the e-format. So, if you are an audible member, take a look at it. This is also available in the e-format, I’m changing…

Alex Lindsay And it makes a difference?

Leo Laporte Sounds beautiful.

Alex Lindsay Oh wow, okay.

Leo Laporte I mean this sound is good anyway. If you listen to audible books, I never thought it was a problem, I think it’s something like 32 kilobit mp3, the type 4 was. e is now 128 kilobit high quality sound.

Alex Lindsay Easier on the ears, I imagine.

Leo Laporte Oh, it’s beautiful. It’s just wonderful and they have done a great job of getting these books converted. This book, even though it’s an older book, is already available in the e-format. If you saw Frost/Nixon and you want to know more about that whole story, this is a great one. All the President’s Men.

Now, here’s how you can get it and as long as you’re reading that, you might as well get another book about the same subject, The Secret Man: The Story of Watergate's Deep Throat. Now, many years later, we finally found out who Deep Throat is, Bob Woodward wrote this story, this book came out, I think, two years ago, three years ago, who was Deep Throat? Bob Woodward tells the story and you can hear that, make two books,

Alex Lindsay And it all turns out to be a disgruntled employee, that’s what it all came down to.

Leo Laporte It always is., join the platinum group, get two books a month. I go through two books a month and I don’t even commute any more but I listen in the car when I’m driving carpool-- in fact my wife will say can you get the kids, I’ll say yeah, and she’ll say how come it took you an hour; well, I was listening, I got involved, I couldn’t get out of the car. When I am at the gym working out, when I am walking the dog, when I am gardening, when I’m doing housework, it’s great for housework, I hate housework but listening to audible, you know, suddenly the house is clean and you don’t even know how it happened., try it today, you are going to love it and we thank them so much for the support of This Week in Tech. Audible’s owned by Amazon, so you got to figure Amazon is not going to – can’t be thinking that the Kindle reading is going to cannibalize the business they just bought.

Alex Lindsay Right, they win no matter what.

Leo Laporte Well, that’s true, that’s true. I know it’s one of their goals; Jeff Bezos’ goal is to get every book on the Kindle but I think it also, is a goal as many books as possible, if not all books in audible format, which I am behind 100%.

[56:18] Everybody okay, anybody want to take a break, shall we move on to our next story? Dwight, how are you doing?

Dwight Silverman Yeah, I’m doing fine.

Leo Laporte He’s plugging in, it’s going to charge up his iPhone.

Dwight Silverman I’m charging my Kindle, actually, I just got the note that said, you are running low.

Leo Laporte What is it, you know, my battery life has been a little disappointing.

Dwight Silverman It’s been – it’s been about, like the first one.

Leo Laporte Yeah, they said it was going to be 25% better, I don’t find it to be at all.

Dwight Silverman Well, was the first one connected to an Edge network or 3G?

Leo Laporte That’s what, I have been asking that, it was my understanding that it was GPRS the first time around, and it’s Edge now but I have been told or EV-DO now, but I have been told by everybody it was EV-DO, so I don’t know, I don’t know.

Dwight Silverman It has, it’s lasted, I charged it the day after I got it, I had it fully charged up on Wednesday and I just now got the message to charge it.

Leo Laporte Maybe I have, maybe there’s something wrong with my battery, I’ve charged it three times since Wednesday. I don’t know, and I’m not doing a lot of text to speech…

Dwight Silverman How much are you reading?

Leo Laporte A lot. I have to say, I’m transformed by this. Denise, you are going to like it.

Denise Howell Good. I’m thinking of getting one for my dad, too, and I’m liking the fact that I went and checked the network availability, and it seems to be really, really good. He lives in a very rural place way up North, he lives in Mendocino.

Leo Laporte Yes, Sprint’s pretty good up in Mendocino.

Denise Howell Yeah, so…

Leo Laporte It’s Sprint, it’s Sprint PCS, so…

Denise Howell Okay.

Leo Laporte It’s really…

Denise Howell They said it’s got coverage there. Didn’t they have big fulfillment problems with the first one, or was that just a big publicity stunt, all of the first ones spilled out immediately and then you had to wait.

Leo Laporte Yeah, no, well that’s the question. Is it the Nintendo marketing technique, or is it that they can’t make them fast enough or what?

Dwight Silverman They have never said how many they have sold.

Leo Laporte They won’t say, but there were shortages, whether they were artificial or--

Alex Lindsay All six of them.

Leo Laporte Yeah, exactly.

Alex Lindsay We are sold out. We can’t keep them in stock.

Dwight Silverman Well, one analyst estimated that they sold about 500,000.

Leo Laporte But how did he get that, how did he...

Dwight Silverman Right, right, I mean, we don’t know where those numbers come from but I would – I think, probably that they…

Alex Lindsay It seems high.

Dwight Silverman It seems high and I think that they probably had a – they probably wound up under-producing, with the desire to make it look more desirable.

Leo Laporte Wouldn’t put it past Jeff. I’m going to stand on what I’ve said, but I really believe that this is the breakthrough that the iPod was.

Alex Lindsay Do we think that Apple, if they build a tablet…

Leo Laporte Yeah, market, market, John. I called the patient – I called the patient dead, print books dead on March 2nd 2009.

Alex Lindsay I still think that Apple will build an iPhone that’s about the same size as that.

Leo Laporte Wouldn’t that be a great product. This almost looks like it.

Alex Lindsay And it’ll be in color, and play video, and will give it a real run for its money.

John C. Dvorak It’s March 1st by the way.

Denise Howell The iKindle.

Leo Laporte Well, this show comes out March 2nd.

Alex Lindsay And I think Apple will do it by July.

Dwight Silverman By this July?

Alex Lindsay By this July.

Leo Laporte I would abandon this in a heartbeat if they did.

John C. Dvorak Right, and I’m looking at that thing on the screen now, Leo and the contrast sucks. This is the same gray thing.

Leo Laporte It is the same as before, you know it’s not – it’s not a breakthrough,

Dwight Silverman It’s for reading text.

Leo Laporte It’s readable enough and if you have a bright – if you have a good light on it, it’s…

John C. Dvorak Black ink on white paper is better.

Leo Laporte You know what I love, that’s something you can’t do it with black ink on white paper, you can change the font size.

John C. Dvorak It’s gray, it’s gray ink on gray paper.

Leo Laporte It’s gray, but you can change, for somebody who is old like me, not as old as you, John but…

John C. Dvorak Whoah!

Leo Laporte The fact that I can get this to basically, large text format, is fantastic.

John C. Dvorak You wouldn’t need to do that if it was – had a good contrast.

Leo Laporte Well, that’s true. I do, it’s a little harder to read…

John C. Dvorak Because I can read off the, you know, little E71 Nokia which has got like 2 point type, I don’t have any trouble reading it because it’s got extremely high contrast.

Dwight Silverman Leo, have you had a problem accidently buying books with it?

Leo Laporte Not yet but they do…

Alex Lindsay I have that …

Denise Howell By sitting on it?

Leo Laporte Yeah, right.

Dwight Silverman Twice I bought, what happened is, at least on mine, when I press a button, the button to click an item on the screen, there is a delay, and the first time I tried to get past the menu, I hit the button and I hit it again, the second click triggered the buy button on the next page and I bought a book I wasn’t intending to buy.

Leo Laporte Yikes. But now they do, I think this must be common because they do say immediately, you can take it back.

Dwight Silverman Yes, and I did, but what they end up doing is they charge you and then they issue a credit.

Leo Laporte That’s not so good.

Dwight Silverman So, and I have done that twice now with this.

Leo Laporte The biggest improvement to me is, it’s just harder to turn the page than it was before. It was so easy to accidently lose your place.

Dwight Silverman Right and that’s the big deal.

Leo Laporte They’ve added a few little things that, on the surface, don’t seem to make a difference but I think do. For instance when you lose your place, it was very hard to get back to your place, before you would have to kind of jump around. Now they have, go to last page read. It’s just something simple like that makes a huge difference in usability. So, I am very happy with it and I have now read, I mean, I probably read 20 hours on it and I have really enjoyed it.

Alex Lindsay It’s comfortable.

Leo Laporte It’s very comfortable.

John C. Dvorak I don’t know how you can do this, Leo, because you are on the air 24 hours a day.

Dwight Silverman I was laughing when he said he does housework, I don’t know when he does it.

Leo Laporte Yeah, you were laughing, you ought to hear my wife, I can hear her from here; housework, what is he talking about, housework?

Speaking of a new iPhone, CBS; I think CBS is really showing that they actually have a little bit of an inkling what this whole thing is about, now is putting Star Trek episodes on iPhones, along with CSI and other full episodes of TV, yeah, yeah...

Alex Lindsay Full, with an asterisk.

Leo Laporte Oh yeah, what is the…?

Alex Lindsay This is the new iPhone out?

Leo Laporte Yeah.

Alex Lindsay So, I installed it and so the new, it’s, so if you search for CBS or, on the App Store or whatever you can download it, and it will play on 3G or Wi-Fi. So, it will play beat up one. I will say that having an application that does this is a completely different thing than having a webpage., which is what NBC did much better. I mean it’s, just the experience of actually going through them is great

Leo Laporte Versus like Hulu.

Alex Lindsay Versus Hulu. But, the only thing that’s a little frustrating is, it says full episode and then you get here and there is six little videos, so you have to click one and then it will play and I think, I guess it will go to an ad, and...

Leo Laporte It’s a chunk at a time.

Alex Lindsay There are these little videos that you have to chunk through...

Leo Laporte Clearly you are not a Star Trek fan, you wouldn’t mind so much.

Alex Lindsay I love Star Trek but…

Denise Howell I want Tribbles on my iPhone, no doubt.

Leo Laporte Is that, are you are showing the application right now?

Dwight Silverman Yeah, yeah. And the other thing is there’s is not that many full episodes on here. You cruise through it, and there’s a lot of snippets and only a few full episodes.

Leo Laporte Well, Hulu was like that when it first started, right?

Dwight Silverman Yeah, yeah.

Alex Lindsay I have to say the experience is actually pretty good. It is.

Denise Howell But if you are on Edge, you are out of luck?

Leo Laporte No, it works on Edge.

Alex Lindsay Well 3G.

Leo Laporte Oh, 3G, I see.

Alex Lindsay I don’t think it will work on Wi-Fi.

Leo Laporte How does it play on 3G? Pretty well?

Alex Lindsay It plays okay. I mean it plays on what you would expect with a 3G connection compared to a Wi-Fi connection. I haven’t been able to test the Wi-Fi yet, I just...

Leo Laporte And this is free?

Alex Lindsay It is free.

Leo Laporte How many spots, is it like Hulu, where it’s just kind of a lower number of commercials?

Alex Lindsay I just, I just saw it today, and installed it today, so I haven’t hit the spots yet. I just wanted to see if it would work.

Leo Laporte Is it more….

Dwight Silverman I haven’t seen any commercials in it.

Leo Laporte More or less than we have?

Alex Lindsay Yes, exactly.

Leo Laporte That’s the cut off.

Alex Lindsay I think less.

Leo Laporte Would you pay Comcast $10 a month for online TV? An article in NewTV says that Comcast, probably kicking and screaming, but Comcast is going to start doing online video as well.

John C. Dvorak They have to do this.

Leo Laporte I guess they do. Now the question is, will they charge extra, how are they going to do it? Are they going to, maybe say, all right you are an HBO subscriber, so we’ll let you watch HBO online?

Alex Lindsay Well, no, it sounds like that what they are talking about is original content, which could be really good for you, or somebody.

Leo Laporte Well, they do this on the…

Alex Lindsay So the idea is that is not necessarily, what they are saying right now, or at least to begin with, is they are not taking other...

Leo Laporte It won’t be, it won’t be The Sopranos.

Alex Lindsay No, they don’t want to, they don’t want to do that, so there –

Leo Laporte Who’s going to watch...

Alex Lindsay – so it’s going to be original content, new content that they are, that they are going to be adding to it, which is great for smaller developers, I think.

Leo Laporte People like you.

Alex Lindsay Yes.

Leo Laporte More than me, yes. Netflix is also saying, we might spin-off our streaming business as a separate business, so you could be a Netflix DVD subscriber or a Netflix streaming subscriber.

Alex Lindsay I think I’d just become a streaming subscriber.

Leo Laporte Yes, me too.

Alex Lindsay Although the only thing I like about Netflix now is being able to rent Blu-rays, because I don’t really want to commit to another piece of plastic any more, I don’t want to buy plastic any more, but I do like my Blu-rays, until…

Dwight Silverman They are charging more for the Blu-rays, right.

Leo Laporte $1...

Alex Lindsay Netflix...

Leo Laporte $1 more a month.

Alex Lindsay Yes. I have …

Leo Laporte Which is not too bad, but it’s just insulting.

Alex Lindsay Why?

Leo Laporte Don’t you get enough from me, why are you charging $1 extra?

Alex Lindsay They get a lot from me.

Leo Laporte You think that’s okay John, that they should…

John C. Dvorak Well, at the moment, yes, I think, just for a while. It’s a way of, I mean, let’s face it, the business is going to die, and they have got to do what they have to do to stay in business, and it’s a good service, I don’t think it’s a bad thing, and Blu-ray, it’s far, is really nice to watch.

Leo Laporte It is. It’s a huge improvement.

Denise Howell I think this Comcast thing is pretty clueless. I am not going to be paying my cable company any more than I already do.

Leo Laporte Well, what if they did it for free? Would you, I mean, they do if you already…

Denise Howell If they get it for free, I mean, I think they are missing a good opportunity here, they could kind of do what TiVo does, which is try and aggregate some good web content and point people to it, since they have a bunch of people who are using their service already.

Leo Laporte Yeah.

Denise Howell And, if Comcast could sort of build their brand by doing that, more power to them.

Alex Lindsay [66:26] I think if they had quality programming within certain niches, I think that it would be an opportunity because I mean, I know that my, I know people who buy an extra, the extra package so that they can watch their home football team, or they can watch Showtime, or they can watch, now the thing is that niche content has to be really good, but if they added things that are, if they cued off of what was already happening in the podcasting world, and took some of those top ones, gave them a little bit more money, and got something good, I could definitely see people saying, oh, I’ll pay $10 extra, because I really want to watch people breaking, re-building cars, or…

John C. Dvorak $10 is a lot though for this kind of thing.

Denise Howell Yes.

Dwight Silverman That is a lot of money, on top of, you know, people don’t buy...

John C. Dvorak $120 dollars a year for subscription to look at low and probably semi-amateurish crap.

Alex Lindsay Oh, I agree, if that’s what it is, I think that that wouldn’t work, but I think that if they, them charging for it also creates a revenue stream to start giving people who maybe have gotten really good at doing stuff for $500 a show, giving them 5,000 a show, and having them increase the production value.

Leo Laporte I don’t think that anybody is going to pay for anything I do, I think this is advertising based, myself.

Denise Howell Well, Leo, I tagged something for TWiT, you should take a look at…

Leo Laporte Oh, okay.

Denise Howell And it actually goes for our journalism discussion, from earlier, too. There was a good episode of On The Media, NPR’s On The Media which…

Leo Laporte I love that show, by the way.

Denise Howell Yes, that’s a great show.

Leo Laporte That’s a great show.

Denise Howell Where they were looking at the demise of the newspaper industry, and they highlighted this company called Kachingle. Great name.

Leo Laporte Well, Kachingle, I guess, yes.

Denise Howell Kachingle.

Leo Laporte You want to say it.

Denise Howell It’s an interesting model, it’s, you decide how much money each month you want spread over the things that you are consuming, and then they…

Leo Laporte That’s a good idea, because the thing that’s driving people crazy is this, what, this, penny ante, onesie, twosie, I got 23 bills.

Denise Howell Right. The problem with Kachingle is what they are hoping people would do is put that little Kachingle badge on their site, and then as you’re reading you decide if you want that logged as something you’re enjoying and so you click the badge and then Kachingle aggregates all your clicks and says, okay, you’ve spent more time on The New York Times, and some time over here on TWiT, and we’ll take your money that you’re giving for this content and we’ll spread it out, according to where your attention has gone.

Leo Laporte Very interesting.

Denise Howell Yeah, I think there could be a more effective way of tracking you rather than making you click something.

Leo Laporte Are you a regular on that show, because I see you’ve been on it a number of times.

Denise Howell No, I have only been on it once.

Leo Laporte Oh, okay. That’s cool.

Denise Howell But now I listen to it all the time.

Leo Laporte Yeah. I missed your episode. What were you talking about?

Denise Howell I was talking about a shield law case in California, do you, you remember the Apple v. case from 2006, where, I think it was the Think Secret people.

Leo Laporte Oh, yes. Oh, yes.

Denise Howell Were saying that they didn’t want to have to disclose to Apple, remember it was about the…

Leo Laporte They had some rumor that they had, but they didn’t want to say where they got it from.

Denise Howell Yes, it was about the, where there are the little space ships things, the routers?

Leo Laporte The Airports.

Denise Howell Airports. They had some, they’d broken some pre-release information about one of the…

Leo Laporte They had a real picture of it. Yes.

Denise Howell Yes, and, so there was a big lawsuit. And Apple wanted to get at their sources, and the California Court said, it went into this whole question of, what’s journalism, and are we going to distinguish between, online journalists and any other kind of journalist, and California, under our shield law, the court interpreted that as being no, journalism is journalism, it doesn’t matter who you are doing it, and we’re going to protect your sources.

John C. Dvorak I agree with that.

Leo Laporte Now, wasn’t there a federal decision recently about that, or no, maybe it’s …?

Denise Howell It’s – there are two different bills pending right now in Congress…

Leo Laporte The bills, that’s right.

Denise Howell To amend the Federal Shield Law.

Leo Laporte And the House version does not really protect bloggers. But the Senate version says, well anybody who is essentially in the business of journalism, which might leave a little hole for bloggers, I guess.

Denise Howell Yes, no, absolutely, the Senate version is much more inclusive, in the way that the California Court was back in that case. The House version wants to put some sort of bar of how much money you actually have to be making from your acts of journalism, which, as we’re saying, when we were talking about Kachingle.

John C. Dvorak There was this sort of constitution that you have to make money.

Leo Laporte Yes, that’s ridiculous.

Alex Lindsay Well, I think that all of this is going to end up in the Supreme Court no matter what, no matter how they craft this law, the first time they – they collar someone who’s got, if EFF jumps in, there is going to be a great opportunity to take this to the Supreme Court, and nullify anything that’s there anyway.

Denise Howell Right.

Leo Laporte I mean, even if your hobby is journalism you should get a little credit.

Denise Howell Right.

Leo Laporte So, the Shield law’s what protects you from revealing your sources?

Denise Howell Uh-uh.

Leo Laporte Okay. So, right now as it stands, if you are a blogger outside of the State of California , and you have a scoop, can the – but wait a minute…

Denise Howell They, those, the laws vary from state to state.

Leo Laporte It’s different in each state, okay.

Denise Howell And I’m by no means familiar with…

Leo Laporte But, I mean, it seems like real journalists go to jail all the time for not revealing their sources. Doesn’t that happen from time to time?

Dwight Silverman It depends on the state, and what, where, what is protected at what time.

Leo Laporte I distinctly remember an episode of The West Wing. No, but I mean, it seems…

Alex Lindsay There was a reporter in New York, it was around the Plame case, right?

Leo Laporte Yes. Spent some time until he revealed his source –

Alex Lindsay Well, she did.

Leo Laporte She did, right? And then worked it out. So, so that’s state by state, Denise, that’s not federal law.

Denise Howell Right, there is a Federal Shield Law, but yes, each of the states have their own take on that through their own state.

Leo Laporte I should probably find out.

John C. Dvorak Not to completely change the subject, but while we’re talking about legality, there is a story on your list here that we really have to get to now that we have an expert on the…

Leo Laporte Finally, we have got somebody who knows what’s she’s talking about.

John C. Dvorak Apple says iPhone jailbreaking is illegal.

Leo Laporte Yes, this is, this is an older story, but I would like to hear your take on this, Denise, in just a moment, but before we do, in fact we have a couple of other stories.

John C. Dvorak Ooh, nice tease.

Leo Laporte [72:40] Yes, how do you like that, huh? We have a couple other stories, including Apple’s – a V.P. at Apple saying, “No, Steve’s coming back, he’s coming back,” and some more interesting stories, including Gmail going down, and competition in the online app store fart space.

John C. Dvorak Apparently quite a brouhaha.

Leo Laporte Yes, it’s quite, quite a kerfuffle, if you will, but before we, why should that get a laugh, I am not a teenager…

John C. Dvorak It didn’t, Leo, it didn’t.

Leo Laporte Okay, thank you. I am the only one. Before we go on to that, I do want mention my friends at Citrix, who do GoToMeeting, that’s what we use all the time for online meetings, and I highly recommend it, if you are in a situation where you’re stuck on a conference call, poor Denise, sitting here with a phone glued to head. You are talking to somebody on the phone, and you know he is playing Tetris, she’s checking her e-mail on her Blackberry, they are not paying any attention to what you’re doing. That’s because what you are doing is not so very compelling, that’s why you need GoToMeeting, GoToMeeting takes a boring conference call, where you’re not grabbing people, and makes it engaging and interesting through the use of visuals, ladies and gentlemen, simply put, when you’re going to have an on – a conference call, you could do it ahead of time through an e-maiI.

It’s very simple, couple of clicks in the e-mail, or you could do it, even do it when you are on the phone with somebody, you say, look, I’ve got to show you this, go to, here is the meeting ID. They don’t have to install any software, they don’t have to jump through any hoops, and by the way, if you’re trying to sell somebody on something you don’t want to make them work. This is very easy, they go to, suddenly they are seeing your computer on their screen, by the way, Mac or Windows, they see the computer, they see the PowerPoint or the Keynote, they will see your drawings, you can collaborate together on a document. That’s kind of how I use it, is working together with other people, because we have a far flung group of people that we work with.

You can also use it for training, if you have an application and they don’t, you can show them how to use it. This thing is amazing, Dick DeBartolo, The Giz Wiz used it with Ludwig, they were working together on a site, Ludwig’s in Poland, Dick’s in New York City, they use GoToMeeting, and they were able to see what was going on. It’s very affordable, one low flat monthly rate, you don’t - be as often as you want, you don’t have to count the meetings, or count the minutes. And now you could try it free for 30 days, which I would recommend, this is a great thing to show your boss, or your clients to try, to see what it can do for you, it’s very addictive, I’ve got to warn you.

Spend 30 days with GoToMeeting, you’ll see what I am talking about. Citrix is a great company, they’ve done this right, and GoToMeeting is the best product on the market. I have tried all the others, this is the one.

God, we had a meeting the other day with our pay, I am not going to name names, with our payroll company. They were using some other, some other company’s solution, and I wanted to, like, shake them and say, please this is horrible, this is painful. I couldn’t do it on a Mac, I had to go down, go over to a PC, I had to download and install software, I had two ActiveX controls I had to click, I mean the thing was, I am going, this is a nightmare, you can’t make a client do this. That’s why GoToMeeting. It’s just simple, just do it, We thank them so much for their support.

So, John, you are saying, that, what? Hello? Oh, John went off to baste his turkey. He posed the question, and Denise is here, thank goodness, to answer this question.

Denise Howell [76:15] So, the basis for contending that there is something illegal about jailbreaking your iPhone is the DMCA, Digital Millennium Copyright Act.

Leo Laporte Right.

Denise Howell And, what the Copyright Office can do is give exemption from violating that act.

Leo Laporte So they can say, well, in the letter of the law this would be wrong, but we say it’s okay.

Denise Howell Right. And, so you see, Apple coming down on one side of this exemption alternative saying, no, we don’t need an exemption for this, it should be against the DMCA, the jailbreaker iPhone, and…

Leo Laporte Oh, okay, so they are not asking for exemption, they are saying on the face of this the law says it’s illegal.

Denise Howell Right.

John C. Dvorak When are we going to be rid of this idiotic DMCA?

Leo Laporte Oh, please. Is there any chance?

Alex Lindsay No.

Denise Howell No.

Alex Lindsay Not now. If you look at who’s getting appointed, and what’s going on right now, I don’t see that happening anytime soon.

Leo Laporte Right.

Denise Howell Right, so on the other side, you have EFF who is…

Leo Laporte They asked for an exemption?

Denise Howell Right.

Leo Laporte And what is the current status of that?

Denise Howell It’s in process, I am not sure exactly when, when it all gets worked out, but it will happen this year.

Leo Laporte Yes.

Dwight Silverman But traditionally, unlocking a phone is not illegal, which is kind of what jailbreaking is, correct? I mean, why – why is this exemption-worthy?

Leo Laporte Yes, didn’t the FCC says it’s…

Alex Lindsay Well they’re forcing the unlock though.

Leo Laporte Yes.

Alex Lindsay They’re not – the FCC can have, I mean, if it’s by rule, but if someone’s actually changing the code to unlock it, it is a…

Leo Laporte But they are not unlocking it, that’s the irony of it. They are not using it with a different carrier, they’re just saying, I want to, all you are saying when you jailbreak is, I would like to get apps from somebody besides Apple.

Alex Lindsay But it’s circumventing the DRM, which is, on the face of it, illegal. I am not – I think it’s a bad idea.

Leo Laporte No, no you are right.

Alex Lindsay I think it’s, but I think that’s the issue.

Leo Laporte Is that it? Is that it, Denise?

Denise Howell That’s it, that’s why they need an exemption.

Leo Laporte It’s circumvention.

Denise Howell Right.

Leo Laporte This stupid law, just appalling. We are all in agreement on that. There is a battle in the – in the Application Store between a program called Pull My Finger and iFart, but I really don’t want to descend to that.

Alex Lindsay The big question is whether you can trademark Pull My Finger?

Denise Howell Pull My Finger, right.

Leo Laporte You can’t trademark Pull My Finger

Dwight Silverman It’s only existed – I think there’s previous art, I think there’s previous art for the last 50 years.

Leo Laporte I am going to ask my attorney, Denise Howell, Denise, I would like to trademark Pull My Finger, could I?

Denise Howell I would tell you that that would be a very weak trademark.

Leo Laporte And why would you want it anyway.

Dwight Silverman I think has the trademark on it originally, actually.

Leo Laporte There was a big fight over the iBeer application in the, like Heineken or somebody made an application and they said, here’s giving away the application that we are charging for. It’s funny, there must be money in the iPhone store or people wouldn’t be fighting so bitterly…

Dwight Silverman Oh there is a lot of money in the iPhone store.

Leo Laporte And yet we are finding that you cannot charge more than two or three bucks for an app.

Dwight Silverman Well, and I think that that’s – it’s the old line, “We’ll make it up on volume”.

Leo Laporte Yeah.

Dwight Silverman Because that’s what’s happening, it is that there was a case with David Pogue’s book. He – they released, which was brilliant, putting his “iPhone: The Missing Manual”, on the iPhone as an app and they initially released it at $4.99 kind of as a grand opening sale, then they moved it up to $9.99 and sales dropped by 75%. This was in Saul Hansell’s Bits blog.

Leo Laporte Yes, I saw that, yeah.

Dwight Silverman And what they wound up doing was bringing it back down to $4.99, they kind of found where people would actually buy it. And I just think that it’s – I think people are making a lot of money there, just making it in $2.99, $3.99, $1.99 apps.

Leo Laporte It’s interesting because Steam, which is Valve’s online gaming service, found that they would sell huge – we talked about this last week – huge numbers of applications when they cut the price 50%. Is it that – is it because of today’s tough economic times or this is just always true? Maybe people are just overcharging for software.

John C. Dvorak There is rule in direct marketing that’s kind of interesting. And I don’t think it applies to all pricing but the rule is – and it’s a very solid one. People – direct marketing experts, in fact, or one of the guys at – the guy that heads up direct marketing over at Into IT actually showed me some documentation for this. Whatever you charge for a product in the direct-marketing environment the net sales will be exactly the same. So, if you charge 10 bucks, you’ll sell half as many as is charged for five. And if you charge $2.50 you’ll sell another twice as many.

Leo Laporte Well, that’s just macro-economics, that’s the old supply/demand curve.

John C. Dvorak And with direct marketing the argument is you want to go with the lowest price that gets you the maximum number of people because in fact the real money is in the mailing list.

Leo Laporte Oh that’s interesting.

Alex Lindsay Well, I know we had with some of our software, we literally doubled the price and then we doubled the sales.

Dwight Silverman Wait a minute, you charged twice as much and you sold twice as much?

Alex Lindsay And it doubled the sales.

Leo Laporte Okay…

John C. Dvorak That happens a lot. In fact that happens with wineries and in fact – I did some work with Robert Craig Winery up in the Napa Valley and they used to sell their wines for 35 bucks and 40 bucks. When they went to $75 a barrel the sales skyrocketed. Which just tells you how dumb wine-buyers are.

Dwight Silverman But I think there is –

John C. Dvorak It’s the same wine!

Dwight Silverman This happens in a lot of industries because it’s a perceived value, but I think that that does not exist in the iPhone area because people expect it to be $0.99 so it better – it has to be really good if it’s over $0.99.

Leo Laporte Yes, see that’s the difference, I buy wine by the price. But I buy iPhone applications by the pretty picture.

John C. Dvorak I have some bonehead who’s on my Skype, just sent me a note saying this works with hookers too...

Leo Laporte Okay thank you. None of us will admit any expertise in that particular area. Moving along, Dell is in deep trouble. Fourth quarter sales drop 16%. They now want to trim costs by $1 billion. If you thought support from Dell was going downhill before, imagine. How do you cut cost for a – when your margins are razor-thin to begin with

Dwight Silverman I think that one of the ways that they are doing that in an article they are talking about the fact that it is, they’re outsourcing more. They are going to send more their manufacturing out, they’ve closed the north Austin Texas plant –

Leo Laporte That’s sad.

Dwight Silverman But I think that one of the things we are going to see in this recession is that a lot of manufacturing is going to be gone by the end of this.

Leo Laporte Overseas.

Dwight Silverman Because now there is so much pressure on it.

Leo Laporte In a way this is the post-industrial era right? Everybody has said for years we’re moving from an industrial economy to a service economy. And the bad – bad economic news just forcing this to happen more

Dwight Silverman Much faster.

Leo Laporte Yes. Dell employs – I was surprised – 78,900 people,

Dwight Silverman That’s a lot of people.

Leo Laporte What were they doing? What the hell were they making? They say they’re going to save – the bulk of the billion will come from reducing the cost of designing, sourcing and building.

Dwight Silverman See, I just didn’t know they spent that much money on designing.

Leo Laporte Well, you wouldn’t know it to look at it.

John C. Dvorak The stuff all’s designed in China.

Leo Laporte It looks crappy. I don’t know – well now they have red and blue.

Dwight Silverman You realize how rare that is when you look at, you know, it’s just a handful of guys at Apple that design everything.

Leo Laporte Johnny Ive, you know?

Dwight Silverman Yes , it’s

Leo Laporte Hire Johnny Ive.

John C. Dvorak I think it’s more than that. They have a whole division there and that’s one of the leading industrial designs firms in the world.

Leo Laporte They used to outsource to places like Frog Design and IDL.

John C. Dvorak Oh, that do – that’s years ago.

Dwight Silverman No, it’s all internal.

Leo Laporte They pulled it all in-house now.

Dwight Silverman But I mean as far as the decision makers at Apple I think, there are still a handful guys that make it…

John C. Dvorak There’s one.

Dwight Silverman One right, exactly. Well and he is on vacation.

Leo Laporte Well and that was interesting.

John C. Dvorak He’s still working I understand.

Leo Laporte [84:12] You know, the Apple meeting – the Apple investor meeting, one investor in fact, only one pressed the directors on Jobs’ health and said when is Jobs going to come back and director Arthur Levinson said nothing’s changed since Jobs announced January 14 he was going to leave, we expect to have him back in June, by the end of June. I don’t know what to say about that, I guess that’s good news.

Dwight Silverman That’s the news.

John C. Dvorak We’ll see.

Leo Laporte We’ll see. I mean

John C. Dvorak It’ll either happen or it won’t

Leo Laporte Is there – Denise, does a director have any responsibility to the shareholders to tell the truth?

Denise Howell Yeah, they have fiduciary duties to their shareholders.

Leo Laporte So they can’t just make something up.

Denise Howell Yes.

Leo Laporte Here was a little bit of a scary story. It’s almost comedic in its extent. The Marine One which is President Obama’s – the president’s helicopter was compromised by a contractor who had a peer to peer file sharing program on his computer.

Dwight Silverman And it saw the whole hard drive.

Leo Laporte Apparently.

John C. Dvorak This brings up a topic I wrote about, I think about eight years ago and I’ve revisited it a couple of times and I bring it up and people always think I’m joking. People who use computers, just like people who drive cars, should be licensed.

Leo Laporte If you’re a defense contractor going on Marine One, I agree with you. If you have on your computer the plans, the communications information –

Dwight Silverman The schematics!

Leo Laporte The schematics, the avionics, the network information and you put Limewire on your system

Dwight Silverman My thing is that, why are you connected to the Internet?

Leo Laporte Good point!

Dwight Silverman If you have that information why are you – why is that computer connected to the Internet.

Leo Laporte And then this guy is so stupid, that not only does he put Limewire on there, but he overrides the standard settings, which by the way do not make the whole thing visible and says you could have anything you want. Whatever you want it’s all there.

Alex Lindsay Now I do want to point out that the people who figured this out, that it happened, was a company outside of Pittsburgh. You know I am from Pittsburgh so I have to – Cranberry…

Leo Laporte Cranberry township…

Alex Lindsay I have been to Cranberry many times. So, it’s a beautiful, beautiful place.

Dwight Silverman This happens all the time in businesses, business are constantly finding programs like Limewire and BearShare on their computer stands it’s a real problem with industrial espionage.

Leo Laporte Jeez Louise! Well, I guess the guy loses his job but I mean it’s kind of a little too late.

Dwight Silverman And this was a defense contractor, this is somebody who in theory has to adhere to security standards that are required in order to them to be contractors with the Department of Defense.

Alex Lindsay I mean the other thing to realize is that this is the new helicopters I believe, I don’t think it’s the old ones, I think it’s the new design that are teetering on the brink of them not making them because of the economy, because the question is should we spend them, they’re the most expensive. These helicopters cost as much as an F-22, incredibly expensive helicopters and there’s been a big question about whether they are going forward and this undermines that. You got to imagine that the companies building it that were contracting with that defense contractor are going to be insanely upset because now they are like why should we build them because Iran has the schematics.

Leo Laporte Yes that was who got it, it went to an IP – to an Iranian IP address.

Dwight Silverman It went to Iran?

Leo Laporte Yeah, an Iranian IP address.

Alex Lindsay It’s like the Rebels getting hold of the Death Star.

John C. Dvorak It’s your worst nightmare.

Leo Laporte The Rebels getting hold of the Death Star says Alex Lindsay, Lucas fan.

Alex Lindsay No boffins died in this, it was simply a peer-to peer. See, if the Rebels had peer-to-peer, they would not have had any boffins dying.

John C. Dvorak Is that an Apple product?

Alex Lindsay Boffins?

John C. Dvorak No, Iran.

Dwight Silverman Iran.

Leo Laporte iRan

John C. Dvorak Oh I am sorry, I was…

Leo Laporte So, it’s true though that if you had written this as a plotline in Star Wars it would have been thrown out as too farfetched.

Dwight Silverman Corny.

Leo Laporte Corny, well

Alex Lindsay Turns out some Stormtroopers had a peer-to-peer on the Death Star and we were able to download the entire thing!

Leo Laporte Stormtroopers aren’t so goofy as all that. Denise Howell is online at You should also listen to This Week in Law, her wonderful podcast all about tech law and IP. That’s on this network with her blog and Lawgarithms, Lawgarithms blog.

Denise Howell Lawgarithms at ZDNet and I am DHowell on Twitter.

Leo Laporte Oh let’s follow, everybody follow Denise, I follow you.

Denise Howell Thank you.

Unknown Speaker Yes, DHowell, with two Ls.

John C. Dvorak Do you follow her on Twitter?

Leo Laporte Oh Twitter?

Dwight Silverman He just follows her around.

Leo Laporte I follow her on Twitter. All right Denise, thank you for being here, we really appreciate your taking the time from your vacation.

Denise Howell Thank you so much, always a pleasure – this is a vacation for me, Leo, coming on TWiT.

Leo Laporte Yes and you don’t have to take care of your son. Your husband has him out on the golf course teaching him nature’s greatest game. Dwight Silverman we really appreciate your time – from the old school!

Dwight Silverman Well, I appreciate you having me.

Leo Laporte He’s the old school, a newspaper man.

Dwight Silverman Not yet, let’s not call it that yet

Leo Laporte An ink-stained wretch!

Dwight Silverman I am a blogger too.

Leo Laporte I know and it is – I read it every day, in fact I steal your links.

Dwight Silverman All right.

Leo Laporte It’s a great blog you keep up on everything

Dwight Silverman And my Twitter handle is DSilverman.

Leo Laporte DSilverman. Like DHowell – Excellent! Somebody sent me an email John C. Dvorak saying “Hey did Dvorak get knocked off of Twitter there is no THErealDAVORAK (sic)” I said, dude you got to spell right, then you will find him, he is THErealDVORAK.

John C. Dvorak Yes, and I only need 50 more get to 45,000 which of course is half of yours but that’s beside the point.

Leo Laporte Oh me? I am nothing, I’m number 38 on the Twitter list; I don’t count anymore.

John C. Dvorak I know the whole thing’s gotten out of control thanks to your Britney Spears.

Leo Laporte It’s not you know, and this is a long conversation that I don’t really want to get into but…

John C. Dvorak We are not going to do it. Don’t, don’t, no, no, stop, stop, stop.

Leo Laporte It’s the Twitter suggested list and you’re seeing people now getting 10,000 new followers a day, because they are on that suggested list. And those of us not on the list…

John C. Dvorak How do we get on list?

Leo Laporte I don’t know, that nobody knows how to get on the list.

Denise Howell Yes, I saw you in our local ink-stained newspaper on that point, Leo.

Leo Laporte Yes.

Denise Howell The LA Times.

Leo Laporte The LA Times. Not that I’m bitter, you know, The Times is bitter because the New York Times has two – yes two listings on the suggested list and it’s gone fwoosh! and Twitter hasn’t mentioned the LA Times and they’re just – the rest of us just stuck growing at the normal few hundred a day or whatever. And these other guys are getting 5, 10 thousand a day. I don’t – you know it’s totally stupid.

John C. Dvorak No, no you are upset about this, I can tell.

Leo Laporte No, I am not, and it underscores actually the, the real silliness of this – these numbers. Finally in a way I am glad because it finally kind of defuses the whole topic.

Denise Howell If Twitter was smart, they would rotate that list frequently.

Alex Lindsay That’s what they should do.

Denise Howell Yes.

Leo Laporte I am never – they’re never going to put me on it because I am too outspoken a critic so that’s fine I don’t care.

John C. Dvorak So anyway, you’ll find me at and THErealDVORAK on Twitter.

Leo Laporte That’s the place. That’s the place. Alex Lindsay is at as well as the and he is AlexLindsay on Twitter.

Alex Lindsay Yes.

Leo Laporte Am I right?

Alex Lindsay That’s correct.

Leo Laporte I am correct, sir.

Alex Lindsay SAY.

Leo Laporte SAY.

Alex Lindsay I get e-mails going “I can’t find you on Twitter” and it’s always SEY.

Leo Laporte Wasn’t John Lindsay the late mayor of New York City LEY.?

Alex Lindsay I believe he was EY. There’s not very many of us.

Leo Laporte It’s an unusual.

Alex Lindsay Yes, it’s – EY is much more common

Leo Laporte Is the common spelling.

John C. Dvorak You have it on your chiron, Leo as “Linsday”

Leo Laporte You are right. Linsday. Oh my goodness, the whole day

Alex Lindsay I’m horrified.

Leo Laporte I have had it misspelled and I am not…

Alex Lindsay I’m not going to cry, I’m not going to cry!

Leo Laporte It’s LINDSAY Lindsay, what does that mean in Greek?

Alex Lindsay It’s not Greek, Scottish. It mostly means that – the informal meaning is we caused lots of wars in Scotland and they kicked us out.

Leo Laporte I won’t wear a kilt! Unless I’ve got a sporran! I am Leo Laporte, thank you so much for joining us. Remember you can listen this show each and every week automatically downloaded to your device of choice if you are using an iPod, use iTunes we’re n the Apple store the iTunes stores in the podcast section as are all the TWiT podcasts. But we are also in the Zune store and other stores, perhaps they might be we are all there. Anything else I should mention? Colleen, anybody? Dane?

Denise Howell I can tell all you new world journalists when you might get thrown in contempt, yes contempt of court under the narrow Federal Shield law. Which I looked up after we got off.

Leo Laporte Am I okay? Am I okay?

Denise Howell And the broader state laws, you’re usually immune from contempt but under the federal law it can be pierced, and if they can show that the confidential information is necessary and not obtainable through other sources. So, if you clam up even in the face of that showing that’s when you’re going to jail.

Leo Laporte And that’s what happens from time to time in the Valerie Plame case for instance.

Denise Howell Exactly.

Leo Laporte Yes. Wow, thank you Denise, I’ll make sure not to clam up in future. Another TWiT is in the can.