What about the company’s awesome new iPhone app, the one that will let you stream music directly to your handset? You know, like the one that Apple (AAPL) just approved for Spotify, the superhyped service you can’t even get in the U.S. yet?

Don’t hold your breath says Best Buy (BBY). That Napster app is not coming anytime soon. And neither are apps for Google’s (GOOG) Android platform or Research In Motion’s (RIMM) BlackBerry.  And it’s because of those darn music labels. From a press note the company sent out this morning:

One of the most common questions Napster receives is, “When will you offer an iPhone app?” Well, Napster has created an iPhone application that allows subscribers to stream music on-demand to their iPhone—including personal playlists, albums and radio stations. You can imagine the company is also looking at streaming applications for several other mobile platforms as well (Blackberry, Android). However, due to the high licensing fees for streaming to a mobile phone, Napster has not yet submitted the iPhone app to Apple for approval or attempted to bring the application to market.

Now that’s an interesting approach–something akin to showing off a shiny new sled in a toy store window below a sign that reads “Not coming soon, not our fault.” Or that bank ad where the jerk takes the truck from the chubby kid.

I also don’t know if Napster’s explanation tells the whole story: Best Buy/Napster and the big labels already have an agreement that lets the company stream unlimited music to your PC for $5 a month. Just how much more would the company have to charge to accommodate the fees the labels want for mobile streaming? I’m supposed to talk with Napster folks later today, and if there’s anything I can pass along, I will.

UPDATE:  A little clarification from Napster president Brad Duea. His company’s position is that it doesn’t want to move about its $5 a month price, and that it would have to do so in order to offer streaming.

Why would it have to do that? Duea won’t spell it out. But henotes that RealNetworks’ (RNWK) Rhapsody, which has submitted an streaming music app to Apple, charges $15 a month for “on the go” service it already offers, and assumes it will charge the same for a service that works with the iPhone. Similarly, Spotify charges the equivalent of $16 a month for its premium service in the UK.

Of course, it’s possible that RealNetworks or Spotify will try subsidizing some of the cost for a mobile app in order to grab market share, and offer their iPhone/mobile services for something closer to Napster’s $5 fee.

That bit of data comes from a new NPD Group report, which says that smartphones market share reached 28 percent in Q2 of 2009, up 47 percent over the last year.

Which isn’t a shock, since the phones continue to get better and cheaper–remember when Apple’s (AAPL) first iPhone cost $600, all the way back in 2007? And all sorts of players, from mom-and-pop software developers to manufacturers like Palm, (PALM) have bet their business on the notion that one day not that far from now, nearly every phone will be a smartphone.

But in the meantime, “feature phones,” the plain vanilla handsets that you almost never read about on this site or any other tech-focused publication, continue to dominate the market, which continues to expand. NPD says sales volume increased 18 percent, revenue increased 18 percent, and the average sales price for new phones increased four percent, to $87 a pop.

[Image credit: cod_gabriel]

At least that’s the suggestion from consumer research service YouGov, which measures “brand perception” via an online panel. YouGov’s BrandIndex survey, which interviews 5,000 people a day and rates brand scores on a scale from 100 to minus-100, shows a big spike over the last couple months for BlackBerry. Adults 35-49 gave the brand a value score of 7.5 on July 21, but by August 4, that number increased to 18.

The BrandIndex people figure that jump stems from the introduction of the Tour, and particularly from the push that Verizon (VZ) has given it–Sprint (S) is also selling the handset, but is keeping that news to itself for the most part. Go to a Sprint store and try to find a Tour. It’s not easy!

But! Even while the oldsters thought more favorably about the BlackBerry, young folks seem to have turned on it: Adults 18-34 gave the brand a value score of 21.5 on July 7, but that number tumbled to 7.9 by August 4. Here’s the chart (click to enlarge):

What gives? One suggestion: Verizon’s decision to drop the prices for almost all of its smartphones (but not the Tour) to $99, which presumably makes the BlackBerry product look…I don’t know…more expensive? I’m not buying it.

Anyway, I’ve been in the old fogey demo for several years now, and I will say, the Tour appeals to me. But then again, that’s mostly because the noisy complaints I hear about the iPhone–primarily AT&T’s (T) lousy coverage and the machine’s puny battery–have kept me from making the leap to Apple (AAPL).

Still, for now I’m hemming and hawing, Hamlet style, on my big purchase. Perhaps I’ll write a post when I make a decision!

If that’s the kind of thing that makes you happy, then you would love today’s call, in which the exact same thing happened again. Twice! From my transcription/paraphrase this afternoon:

Q: What about getting into the low priced/netbook category?

Apple COO Tim Cook: “Our goal is not to build the most computers, it’s to build the best. Whatever price point we can build the best in, we will play there. At this point, we don’t see a way to build a great product at that price point, $399, $499.” We think many customers buying those find themselves “disenchanted” after buying cheapo/netbooks.

Q: Do you think there is an emerging market for a “truly mobile device” with a larger screen, a market big enough that you may want to participate?

Cook: “Never want to discount anything in the future,” and never want to answer specifically your question about new products. [Duh.] But boy, do we think netbooks are lousy, and we think customers agree.

Two things here:

1. Apple has a history of disparaging products and markets right before they unveil their own. So it’s not unreasonable for analysts to keep asking about the prospects for a supercheap Mac laptop. But Apple really is emphatic about its distaste for these machines.
2. Apple is not ruling some sort of device that’s more expensive than a netbook and less expensive than a $999 MacBook…and may have a big touchscreen…and is bigger than an iPhone, etc. Something, perhaps, like an $800 iTablet. We’ll see.

EARLIER:

Joining call late; analysis of Q3 results here.

Reading from prepared statement:

• Eight billion songs purchased and downloaded from iTunes store.
• Slight uptick at Mac retail stores. 50 percent of Macs sold at stores to customers who didn’t own Macs before. 258 stores. 27 store remodels.
• Gross-margin improvement: Component cost increase not as high as expected; weaker U.S. dollar helped.
• Cash pile: Will be invested in short-term investments. First week of Q4, made $500 million payment to Toshiba for future supply of NAND flash memory.

Q&A:

• Please talk about your relationship with wireless carriers (i.e., when will you dump AT&T (T) for Verizon (VZ). Tim Cook: “I think that most of the carriers we’re doing business with are thrilled with lower churn…and, of course, their customers are demanding the iPhone.” Do you see opportunity beyond the iPhone, like data plans for laptops with AT&T? “Nothing to be announced today.” How’s your relationship with AT&T? “I think it’s an excellent relationship and we’re very happy with it.”
• Discussion of education and professional market for Mac laptops/PCs–both affected by economy more than consumer market, i.e., schools and corporations are less likely to spring for shiny new Macs than Joe Sixpack.
• How is the $99 iPhone performing? As we made changes–launch of 3Gs and lower-priced iPhones–we saw acceleration of unit sales. But won’t break down mix. Supply of phones has been “constrained” and demand is robust. Opportunity for enterprise sale? Big opportunity. Doing well with small business, and with big corporations and agencies where employees can purchase for themselves.
• Guidance details? No change in thinking regarding guidance offerings. We usually see an increase in Mac units from June to September, but we think the sequential increase will be less than in previous years since we’ve refreshed our lines a while back. Also, education sales are “under pressure from budget shortfalls.” Same thing with the iPod: We think we’ll see a decline for regular players but an increase for the iPod touch. Seasonality makes projections a little funky this time around given timing of product launches.
• Channel inventory for iPhone lower is than we would like; there are 1.83 million phones in inventory.
• Given the $999 MacBook and price cuts for the Mac line, is the MacBook more or less elastic than anticipated? As we expected, some people are now buying up, because they can get the Macbook Pro for $1,199, down from $1,899. “We’re not thinking fundamentally different about the Mac business than we were before.” If we can build great Macs at lower prices, we will, but we won’t put the Mac brand on products that aren’t up to our standards.
• Update on Snow Leopard? Why such a low price point? Snow Leopard is priced aggressively so that all our users can upgrade to it, and we expect that they will. What commodity prices are you worried about, what should we think of the Toshiba prebuy? Are others coming? The market for DRAM and large-size LCDs has “shifted to constrained environment” and prices have moved accordingly. The NAND supply is getting better. We have a long-term supply agreement with Toshiba. We view flash as key component because we use it in so many products, and we’re a big consumer on a worldwide basis. We’re always open to similar deals. We’ve done one with LG on LCDs. We may do others, but we’re not working on one now.
• Please talk more about consumer demand for lower-priced laptops. No details forthcoming. But on macro level: Once price changes, people are upsold from $999 unit to $1,199 unit. [We just heard that.] Prior to change, we had seen people leaning toward the $999 product. What about pricing on iPhone side? Sounds like $99 3G iPhone helped drive traffic to the $199 3GS iPhone. Was that the plan? We’re focused on total iPhone units. So we’re psyched about 5.2M iPhones sold. Also, take note that the 3GS is in short supply and not available in all territories. Also, early in cycle, you have more upgraders, and upgraders are more likely to get higher priced phones. Still, too early to tell about product mix.
• Competitors are now finally coming out with rival app stores–Pre (barely), BlackBerry, etc.). What are you up to in answering back? Well, we just launched OS 3.0. That’s pretty great. It has an Installed base of 45 million (iPhones and iPod touch). We have a gazillion apps. According to the latest numbers from Nokia (NOK) and RIM (RIMM), they have a couple thousand each; Android has maybe 5,000. “We feel extremely good about our competitive position and continue to believe that we’re light years ahead of other people.”
• What about getting into the low-priced/netbook category? Tim Cook: “Our goal is not to build the most computers, it’s to build the best. Whatever price point we can build the best in, we will play there. At this point, we don’t see a way to build a great product at that price point, $399, $499.” We think many customers buying those find themselves “disenchanted” after buying cheapo/netbooks.
• Is the carrier network strong enough to handle all the apps and the more robust apps you’re coming out with every day? Non-answer. Do you think you guys will make investments on the side to take pressure of carrier-capacity issues? No plans. When we entered business, we looked at it, decided what we could do well was deliver the handset. I think there are other people that have more skills in the network area, and I think we have a lot of those partners.
• Back to netbooks and things like netbooks, but better, like the iTablet: Do you think there is an emerging market for a “truly mobile device” with a larger screen, a market big enough that you may want to participate? Cook: “Never want to discount anything in the future,” and never want to answer specifically your question about new products. [Duh.] But, boy, do we think netbooks are lousy and we think customers agree.
• Any info on iPhone sales split between new buyers and upgrades? Nope. Okay, how about the app store? It looks like prices are in a “race to the bottom”; there are lots of 99 cent apps. Are you worried about that? And can you help customers distinguish between good ones and “garbage”? Cook: “We realize there’s further opportunity for improvement” regarding promoting quality apps, etc. Regarding price: It’s up to the developers. As the installed base grows, it makes more sense to have lower prices, but that’s up to the developers.

Call finished.

The site is the work of Peter Rojas, who helped build Gizmodo and Engadget, and Ryan Block, who took the torch from Rojas after he moved on. Gizmodo and Engadget are the best known and most powerful of the new generation of gadget sites, which makes Rojas and Block revered by the gadget gang. That’s why we’ve been hearing about gdgt, in dribs and drabs, for many many months.

But as well known as Rojas and Block are, they’re still going to have to work hard to make a dent in the crowded field. In addition to the two blogs they created, the gadget spectrum includes everyone from staid players like CBS’s (CBS) CNET to rumor sites for Apple (APPL) obsessives, like MacRumors, to sites for real obsessives, like the handful of people who still own Palm (PALM) Treos. (And, of course, there’s All Things Digital’s Walt Mossberg, who bestrides all of this like the colossus he is, and is also my boss. Hi, Walt!)

Rojas and Block argue that their site is different because it’s not going to be driven by editors but by the site’s users, who will gather there to swap info, stories, rumors, opinions, etc. In other words, Facebook for gadgets, though I gather they’d recoil if they heard that. The other pitch, though they won’t spell this out, either: Their site takes a bunch of features and content that you can find other places and presents them in a better way.

There’s a bunch of nifty features, like a gadget-finder that lets you find products via specs instead of brands, and the site seems to be pretty slick. But it’s better if you have a look yourself instead of having me describe it. And gdgt.com won’t really hit its stride until actual users start using it. I look forward to hearing what they have to say about my upcoming phone dilemma: iPhone 3GS, Palm Pre or Blackberry Tour?

But as much as Rojas and Block argue that this is a community site, it’s their names and reps that have people interested in the project. And that’s what has convinced investors to plow money into an ad-supported Web site in an era when the economy sucks and there are way too many ad-supported Web sites.

The duo won’t discuss funding, but I’m told that last fall they were discussing investments of up to $1 million, but ended up taking less than that via a group of VCs and angel investors. I don’t have a complete list of investors, but people familiar with the company tell me that early-stage investor True Ventures led the round, which also included New York-based incubator Betaworks and Mahalo’s Jason Calacanis.

Calacanis’s name will resonate with longtime followers of the tech blog world: He was one of the founders of Weblogs Inc., which created Engadget as a rival to Gawker Media’s Gizmodo, and hired Rojas away from Gizmodo. Calacanis eventually sold Weblogs Inc. to Time Warner’s (TWX) AOL for a decent pile of cash, some of which I believe ended up in Rojas’s lap.

Click the image below to see a screenshot of what gdgt’s homepage ought to look like.

Except…I have this nagging concern.

Like a lot of you, I first learned about Michael Jackson’s death Thursday via Twitter. But at the time, I wasn’t convinced I was learning about it.

I saw tweet after tweet on my BlackBerry declaring the superstar dead. I was mobile, and my Web browser wasn’t working, so my Twitter stream was my only source of information, and I was grateful for it.

But in the first hour the story broke, I was never sure what the source of the information was. And so I never knew whether I should believe it.

Turns out that some of the Twitterers I followed had seen a report, first published at 5:20 Eastern time by TMZ.com, Time Warner’s (TWX) gossip powerhouse. But even if they linked to TMZ, I couldn’t tell that at a glance because they used URL-shorteners like bit.ly that obscured the Web addresses.

And many other Twitterers didn’t bother to explain where they’d heard the information at all. It was just fact. They were right, of course. But were they sure?

In some folks’ eyes, these qualms I have about accuracy and sourcing make me an old media dinosaur. So says a pal who’s worked as a reporter at three big, prestigious old media outlets. Here’s a bit of a missive he sent me via Facebook:

Twitter delivered the news first and fastest. Yes, it was from tmz; but who actually went to tmz.com? I didn’t. I read it on Twitter… and stayed there to read more. Did I turn on CNN? No. Just read the tweets.

This is really bad for old media: Twitter is the water cooler. It is the center of the conversation. Almost every media outlet wants to be the center of a conversation. They’re suddenly failing.

But I don’t think it’s that binary. Twitter and old media are complementary, and the former certainly has less value without the latter.

I eventually got to a Web browser and looked around the Web for other sources confirming Jackson’s death. When I couldn’t find them, I came back to Twitter.

At 6:15 Eastern time, the Los Angeles Times reported that Jackson was dead, citing its own sources. After that I knew that Twitter would primarily be repeating the LAT’s report and those that followed it, so I bailed.

That worked out well. Staying clear of Twitter for a while Thursday night meant I didn’t have to read about Jeff Goldblum’s death. Which never happened, of course. But that didn’t stop Twitter users from repeating the story, over and over.

And if you are that kind of person, chances are you’re interested in the new phone’s “tethering” function, the ability to plug it into your laptop and use it as a modem. But you’re going to have be patient–and affluent.

If you’re an AT&T customer, you’re not going to get the chance to do this in the near future. The wireless company has announced that it’s going to offer tethering, but hasn’t said when. Meanwhile, it has said that it will offer MMS, the ability to send videos and photos from the phone without using email, this summer. So reading between the lines, it’s reasonable to assume that tethering won’t be showing up for the next few months at the very least

And if you’re an AT&T customer, chances are that when you do get the chance to tether, it’s going to be very expensive. Like most carriers, AT&T (T) has said it is going to levy an additional charge for tethering, but hasn’t said how much. Web reports out today suggest that AT&T plans to charge $55 a month. on top of its $30-a-month iPhone data plan. As Daring Fireball’s John Gruber notes, that’s much more than wireless customers outside the U.S. pay for tethering. But it’s cheaper than the rates other AT&T customers already pony up: Blackberry owners currently pay the carrier an additional $60 a month for tethering. UPDATE: Thanks to reader Rob Campbell for catching my error: AT&T charges Blackberry users an additional $15 a month for tethering. So if AT&T really does charge tethering iPhone users $55 a month, it’s likely to be an all-in-one charge that includes the phone’s $30 data plan. We’ll see when the company finally announces pricing, whenever that is.

For what it’s worth, I’m not in the chorus of those who think that’s outrageous: I currently pay Sprint (S) $60 a month for a (pokey) wireless EVDO card with a 5GB data limit, on top of the $100 I pay for an unlimited voice/data plan for my BlackBerry.

ANOTHER (!) UPDATE: Earlier in the day AT&T refused to comment on the $55 pricing plan. Now, via their Facebook page (!), the company confirms that tethering will not cost $55 on top of standard data plans. But it doesn’t actually say how much tethering will cost. So we’re back where we started.

[Image credit: PR 1001]

And there are lots of marketers trying their best to ignore technology and keep their ads as dumb as possible. Example: Sprint’s email to me this morning trying to convince me to sign a new contract so I can snag a free “Katana Eclipse X” from Sanyo. Here’s the pitch (click to enlarge):

Nothing against the Katana Eclipse X, by the way. I’m sure it’s a fine phone. But here’s the thing: Sprint (S) has my email address because I am a customer. I’ve been one for a decade. And so Sprint knows that:

• I own a BlackBerry 8830, and that…
• I spend $100 a month for an all-you-can eat plan (plus another $60 a month for a broadband wireless card!), and that…
• My contract expires in a couple of weeks.

So if I were Sprint, I’d be trying very hard to convince me not to ditch the company for AT&T (T) and Apple’s (AAPL) new iPhone 3G S, which looks awesome.

And again, nothing against the Katana, which is apparently available in “Nightlife Black and Hypnotic Pink.” But it’s no BlackBerry, and it’s no iPhone. And it’s not a Pre, the phone that Sprint and Palm (PALM) are positioning  to compete against those two.

But I’ve yet to get an email from Sprint telling me that the Pre exists–perhaps the company hopes that I’ll be wowed by its new woman-friendly TV ads. Or what about Research in Motion’s (RIMM) new “Tour,” which is coming out this summer and looks great? Nope. Had to learn about that one by reading a blog.

So while I worry that I’ll regret typing this, here goes: Dear Sprint: You know where I live, what I own and how much I spend. You know I’m a free agent at the end of the month. Want to keep me? Start pitching.

The program, created by Echostar’s (SATS) Sling group, is designed to let users watch TV shows, beamed from their own sets, on the  iPhone. It goes on sale for $29.99 today via Apple’s (AAPL) iTunes store–but without the ability to work over AT&T’s 3G network.

That’s our decision, says AT&T (T). The company’s rationale: The iPhone’s too powerful, and our network isn’t powerful enough.

That’s the gist of its argument, which both makes sense and confuses. AT&T says the Sling app could consume lots of network capacity, which is straightforward enough. But you can already use Sling apps for other handsets, like the BlackBerry, on AT&T.

The difference, AT&T says, is that the iPhone really isn’t a phone at all, but a PC that happens to make phone calls. “We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.”

No argument there, either. But again, given that you can use the SlingPlayer over AT&T’s spectrum using different devices, it seems as if AT&T is really making a different argument: Just because you can watch TV on other devices doesn’t mean you will. But if we give people the chance to watch TV on iPhone, they’ll flock to it–and our network can’t handle that.

See for yourself. Here’s AT&T’s full statement, via Engadget:

Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network. The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service. We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.

That said, we don’t restrict users from going to a Web site that lets them view videos. But what our terms and conditions prohibit is the transferring, or slinging, of a TV signal to their personal computer or smartphone.

The Slingbox application for the iPhone runs on WiFi. That’s good news for AT&T’s iPhone 3G customers, who get free WiFi access at our 20,000 owned and operated hot spots in the U.S., including Starbucks, McDonalds, Barnes & Noble, hotels, and airports. AT&T is the industry leader in WiFi.

[Image credit: Markhillary]

The free program that Amazon (AMZN) created for Apple’s (AAPL) phone is a powerful tool, and from what I can tell, it works equally well on Research in Motion’s (RIMM) devices.

My BlackBerry 8830 doesn’t have a camera (maddeningly), so I can’t test out the photo-match feature, where users submit a picture of something to Amazon and the retailer tries to find something similar in its catalog.

But I can testify that it’s dismayingly easy to buy something using the app, which is why I’m on the hook for an Aretha Franklin CD headed my way right now.

Aside: Play with the Amazon app for more than a couple of minutes, and you can start to get an idea of how mobile advertising, currently in the “should be big one day” phase, could actually be big. Combine digitally delivered coupons–for stuff I actually want–with powerful e-commerce apps like these, and there might actually be a market for mobile ads.

At a Q&A at the cable industry’s annual show today, Murdoch waxed on about the Kindle’s qualities, then made a reference to investing in a machine that could be even more attractive–one that boasted a large, full-color screen. I was covering the event live [original story below], and these are my notes from the relevant part of his chat. Please bear in mind that this is a very rough paraphrase, from notes I was taking in real time:

We need new models. The first inkling of it is the Kindle. You can get the whole paper there. And you can get the whole of The Wall Street Journal on your BlackBerry. We’re investing in a new device that has a bigger screen, four-color, and you can get everything there. [Did I just hear that correctly?]

After the event, I checked in with a News Corp. spokesperson, who confirmed that I hadn’t been hallucinating: News Corp. is indeed in “exploratory” talks about making an investment in a company working on e-reader technologies.

Who might that be? No guidance there. Plastic Logic, based in Mountain View, Calif., has been working on a reader with a 8.5 by 11-inch screen for several years. But that company has already raised $200 million from investors, including Intel (INTC) and Oak Investment Partners. And its device, scheduled to hit the market in 2010, will feature a black-and-white screen that uses the same E Ink technology that the Kindle and Sony’s (SNE) Reader use.

Another option: Rival publisher Hearst, which has plans for its own Kindle. But Hearst’s unnamed reader will initially be a black-and-white affair as well.

Anyone have any other possibilities? You can reach me directly at peter@allthingsd.com. Or if you want to be completely anonymous, which is understandable but less useful to me (I won’t have any way of reaching you for follow-up) you can use the blind tip box here.

EARLIER:
This year’s cable show seems lightly attended, but folks are are buzzing here about Bob Iger’s comments this morning, where the Disney (DIS) CEO alternately tried to placate and challenge the industry with his online plans. I’ve got high hopes for this one, too, a keynote speech from News Corp.’s (NWS) Rupert Murdoch, who will then take a seat and chat with three fellow CEOs: Time Warner’s (TWX) Jeff Bewkes, Viacom’s (VIA) Philippe Dauman, and Liberty Global’s Michael Fries.

Moderating the discussion: Murdoch employee Neil Cavuto, who does anchor work at both Fox News and Fox Business (and since this Web site is owned by Dow Jones, I’m a Murdoch employee, too).

I’ll be covering the Q&A live, which means that any text you read below is an on-the-fly attempt to paraphrase the speakers on stage–unless it’s in quotes, which represent my best attempt to get the words verbatim.

Starts with Q&A with Murdoch.
NC: Are things getting better?
RM: I think the long-term situation is still extremely dangerous. I’m pessimistic because every family is poorer and they’re going to save more and spend less. Even more dangerous if the government throws too much money at the problem:

NC: What if you’re wrong?
RM: “I pray I am”

NC: Markets are up in reaction to G20 plan. Is that the kind of thing you’re talking about (re too much spending from Congress, etc.)
RM: I’ve never seen any money from the World Bank that’s done much good. Maybe the IMF should be recapitalized. But it doesn’t matter, because none of the money will come back to the U.S. “I would say it’s a bear market still. We’re not going back to the old levels anytime soon. We’re two or three years away.”

NC: What about the economy?
RM: May get better in a year. “I walk around the streets of New York, and all I see is “to let” signs everywhere.” Space we rented for $80 a foot on Sixth Avenue is now $60 a square foot. On our business in general: Advertising is flowing out of the big networks, but our cable advertising is up. “They’re in good shape, and we’re very happy to have a number of them.”

NC: They are rioting in London against capitalism “they’re rioting against success…they don’t like rich people. Are you offended?”
RM: No. There’s only about 4,000 of them. “Makes good television, someone with blood on their face…but it’s greatly overstated.” I have had worse problems when I had strikes 20 years ago.

NC: So you don’t buy this sort of “new global class warfare.”
RM: It’s very dangerous. “We all know in the last two or three years there have been notable headline-grabbing excesses, in this country and in Europe, despite what the Europeans are saying, and we’re paying for that.” But I don’t think we’re going to have class warfare. “We do need an SEC that’s awake,” in part so we don’t have work with the French and their regulators.

NC: Everyone’s piling on the U.S. What does that mean for the U.S.?
RM: I don’t care what the French say. “But when the Chinese speak, I pay some notice.” The Chinese don’t want us in an inflationary situation, or they won’t lend us money.

NC: President Obama talked about working with the rest of the world. Is Washington saying that “we are this big global powerhouse together”?
RM: It’s very nice for the President to say that, but I don’t think Bush ever did that. He was talking to world leaders every day. He wasn’t as articulate about it as Obama. But “we’re the big boy on the block” so naturally people are jealous, but we better remain “damned sure” that we remain the big boy.

NC: But we owe everyone lots of money.
RM: That’s what worries me. I worry that we’re going to start printing lots of money, we’ll have runaway inflation.

NC: You just said Obama is brilliant. Your companies “have a reputation for being slightly more conservative than he is.”
RM: “We’re fair and balanced.”
NC: “Absolutely.”
RM: The monolithic liberal press complains when they don’t get a corner of the world; “if they want to smear you, or me, that’s fine.” Re Obama: “I’ve had a couple of very charming conversations with him.” He talks about how pragmatic he is. “We’ll see.” So far, a couple of little tests have been disappointing. With regard to Teamsters and school vouchers in Washington.

NC: So you’re saying he has a reputation for being pragmatic, but he isn’t. And he doesn’t seem to like Wall Street either.
RM: “That’s putting it too strongly” I think it offends him to see people making $200 million dollars a year, or whatever it is.

NC: Taxes are going up for the wealthy.
RM: Yes. So “we’ll go live in Texas.” It’s serious. a 60 percent tax rate is going up. Not just the federal taxes, but states, and counties. My Long Island house “is not very big at all” but what Nassau charges for taxes is enormous. The bill has gone up from $3,000 to $7,000 or $8,000. “I’m trying to sell my house.”

NC: You’re a newspaper guy. Newspapers as a physical product are dying. San Francisco may not have a paper at all soon. What do you think of that?
RM: “It’s sad. But let’s face it. San Francisco is a pretty small area. And there’s some pretty good papers in that area,” and they’re not folding. “People are getting used to getting everything on the net for nothing. That’s going to have to change.” Take the New York Times. No matter what you’re going to say about it, it has a very very good Web site. But it’s never going to make enough money to cover what it’s losing on the print side. The question is: “Should we be allowing Google to steal all our copyrights? Just take them? Not just Google but all the aggregators? Yahoo? And I feel that if you have a brand that’s strong enough, like the New York Times, they should be able to go to Google and say ‘no.’” So when you go to search on Google, it doesn’t show up. But there’s only 10 or 15 of those, probably.

We need new models. The first inkling of it is the Kindle. You can get the whole paper there. And you can get the whole of The Wall Street Journal on your BlackBerry. We’re investing in a new device that has a bigger screen, four-color, and you can get everything there. [Did I just hear that correctly?]

[Time to bring on the other panelists]

PD: “If I may, I’d just like to say bon jour to Rupert.”

NC: Philippe Dauman, you said you’re seeing some positivity in your business. Where?

PD: Theater sales are healthy. Cable is OK. Saw some deterioration in ad sales, but in last few weeks, we’re seeing some plateauing. On the kids’ cable channel upfront, we’re starting to do well. “There are some advertisers that are increasing their spend. They’re healthy, and they see an opportunity to expand market share. Advertising works, even for banks.”

Jeff Bewkes: We’re pretty much seeing the same thing. Advertising for print is down, cable is very strong. AOL, “not so strong.” The problem is that outside the U.S., growth rates have come down, and financial problems are much worse. “But I think it’s short-term” so we’re still investing. Invested in Eastern Europe.

Michael Fries: We’re doing OK, too. Cable isn’t immune, but we’re selling products people need. Our Eastern European markets aren’t doing great, but fundamentally we’re still growing. We’re still growing through this. Since we’re not ad-supported, we’re not having down markets or down quarters. In some of our markets, there will be some consolidation, and we can get some of our competitors out of the way.

[Missed a section on broadband and infrastructure outside the U.S. Apologies]

NC: You have great content but on the Web, but many people don’t pay for it. What can you do about that? Do you have to do deals with the likes of Hulu, and get pennies on the dollar instead of giving it away?

PD: There’s a middle ground we’re trying to follow. Consumer behavior changes, revenue models have to change, too. We put a lot of content on line, we also do a lot “windowing.” Some content like news goes online right away, and the “Daily Show.” That’s on Hulu. But you do get incremental monetization “if you do it right.” “Daily Show” ratings are up since we went on Hulu. We have to experiment and see what we can do to enhance the experience.

MF: Content doesn’t follow eyeballs. Content follows money. Content providers want first and foremost to get paid. Consumers want random access to content. They want high-quality content. I like the idea [i.e., to put all their stuff online] that Time Warner and Comcast is promoting “is a no-brainer.” Online now has a negligible impact on TV, so right now it’s something we can get a hold off.

RM: It varies from show to show. A good show can get improved ratings over time, via the DVR. Like “24.” A lot of stuff that’s DVR’d is played that evening. “There’s no loyalty to audiences at all. There’s loyalty to certain shows.”

NC: Journalists are moving to the Web, but they’re not going to get paid as much on the Web [yup]. Point being: Aren’t authors and artists who produce work for the Web, or the Kindle, going to get screwed?

PD: No. You can charge lower prices but you have lower costs. If you have a secure download-to-own business, you can protect revenues for everyone.

NC: But generally, don’t all content creators have to realize that their content is worth less?

JB: This is the cable convention. Rupert’s right about not having loyalty to broadcast networks. But there is, or at least different identities, on cable. The broadcast business has its challenges, as we know. But the cable channels have the most value and the most future….This industry can now deliver all our great stuff on broadband, and over mobile. [Rambling here but basically Bewkes is repitching his "TV everywhere" idea] “We’re not trying to make the Internet not free. We’re just saying that if you use it for free, you ought to get what you have in your home….Look how slow we’re being. We’re all being too slow to put all these channels and put them broadband….We ought to do it, and we ought to do it now….Put it on the Hulus and YouTubes if you need too, but only if people are subscribing to the cable plans. You can’t just blow up the financial structure….We ought to be taking the advertising model from cable networks and moving it over to broadband.”

NC: That isn’t what I was asking about. What about us content creators?

PD: “We treat creators of content really well.”

JB: “Yeah.”

PD: Back to Bewkes’s plan. People get the advertising model.

RM: People are used to the free content being free, and “the fact is that nobody’s making money with the free content on the Web, except for search.” We’ve got to find a way to charge.

MF: This notion that we’ll figure out how to pay for something, someday, is wrong. There’s value in aggregators and editors, and people go to Fox News because they know what they’re getting. “We have a generation below this lost generation that we can capture and retain, if this industry does it right.”

JB: Hey, want to see what that looks like? [Now it's time for Bewkes to run a promo, literally for HBO. "HBO GO." The "coolest way to watch HBO on your computer....If you have the key, it's free." I am assuming that this is a mock ad for a product that Bewkes would like to exist--HBO OnDemand, online.

JB: I apologize for running a commercial.

PD: That works well for pay cable channels like HBO and Showtime and our new channel. Not sure about other channels.

NC: Let's say our recession/depression lingers for a while "a real protracted type of a deal." What then for entertainment?

JB: It will hold up.

NC: What about advertising?

JB: Less.

PD: It will be slow, but we'll get through it. We have to plan for the possibility that it will be bad for a long time. You spend less, you have to be careful about not spending on things that aren't you core brands, and acquisitions, and that can be self-defeating. We're dependent on Washington in some ways, but what we really need are the credit markets to work again.

MF: Bingo.

NC: How has recession affected you personally? Do you change the way you display your wealth, or your own personal behavior?

JB: [Sitting next to Murdoch] “I tend to sit next to people who are richer than me.”

PD: Hotel managers are beside themselves because no one has business meetings, and then they have to fire working class people. But I think this “populist surge” about abuses will pass. “We’re going through an extreme period, and this is a country that still values entrepreneurial behavior.”

[Panel is over.]