 behalf. So that brings us to our first speaker. As I said, the sessions this morning focus on new transformational technology and that it's actually the topic of our first speaker. And our first speaker is Gerd Leonhard, who quite frankly can be summarised in one line. The Wall Street Journal calls Gerd one of the leading media futurists in the world. So with that said, can I welcome Gerd to the stage? All right, thanks very much for the intro. It's very easy to be the leading media futurist because there's only one and that's me. So I thank the Wall Street Journal for putting that in my mouth. It's really a great pleasure to be here. I live in Switzerland. That's quite far away. I came in yesterday and I went to why Hickey Island was amazing. So it's my second time actually in New Zealand and it's an absolutely amazing place. I have to tell everyone in Europe to make it down here and take the 28 hours or whatever it takes to come here. So great pleasure to be here. You have a beautiful country and lots of really interesting initiatives here. So I want to speak to you about things I've seen around the world. I'm G. Leonhard on Twitter. If you're twittering now, you can also ask questions through Twitter and maybe I can answer them later. I will also publish the slideshow later on Twitter. So just follow G. Leonhard and you'll see my updates also with the hashtag. So many people are asking me what in the world is a futurist? How can anybody know the future? The answer is of course nobody knows the future. Nobody can predict the future. My job is about foresight and there's a great saying in China that Confucius I think said that if you want to know the future, ask your children. So many ways we all know the future. We just don't have the time to look at it unless you can see this quote by IBM sometimes people get it wrong. My main job really is this, is to listen. I'm not doing a very good job of that today because I'm talking obviously, but I look forward to listening to you later to find out what you're saying. I do about 100 conferences in a year, all different topics. We have about 100 clients around the world that we work with in terms of their future scenarios, anything ranging from Google who is right over there today by the way. They have good scones. Take a look over there. And many others that we work with. Important point before I kick off, if Henry Ford had asked people what they wanted, they would have said faster horses. If we asked people what they want in broadband they're going to say make it free, make it fast, make devices cheaper. We have to look beyond the obvious. We have to not think about faster horses but about cars. What's coming up next in the future beyond the obvious? So my main topic today will be the discussion of what I call telemedia. This is a complete convergence of telecom and media that you see happening on a worldwide scale, especially in developing countries, to where telecom companies are engaging with media, entertainment, content, social media of course. And this is really changing the world in many more ways than one, also because we have advertising involved as a factor. The biggest factor this year surely will be Mark Zuckerberg in his IPO, his public offering. He's estimated to fetch $100 billion U.S. in making him, I think, a 2,000 X billionaire and creating over 1,000 Facebook millionaires in the process. Now this is going to be very interesting because of course the entire world is now using Facebook and Twitter as a means of social justice and as a means of communication. So broadband there and mobile broadband of course has a much bigger function than selling stuff or then e-commerce. Facebook will very soon be on your television. Facebook is already selling movies. You can watch Al Jazeera, the TV station, the biggest Arab speaking TV network in the world on Facebook. You can buy, sell, win stuff on Facebook. You can follow brands on Facebook. You can pay with Facebook. Very soon Facebook will launch a currency. That's already there called Facebook credits where you can in fact pay people with Facebook money. For Facebook will have a currency. So there's all points of one direction called telemedia because once Facebook has $100 billion, they have more money to invest than Vodafone or anybody else in the world to create content networks through social media which is what all the telecos have to pay for to ship. Now imagine this, right, if we all have smart devices, iPads and phones and everything, what are we going to use this for? We're not going to use it for just online banking or voting or complaining about the government. We're going to use it to consume content. That's the key question of broadband. I mean this is why we have broadband, right, to communicate and to have access to content. So around the world we're going in this direction. Social networks are essentially cable TV without the cable. And if you talk to the TV companies, ITV, the BBC that I work with sometimes or big movie studios are thinking like, okay, this is quite scary, right, because in the end they can control cable television and satellite but social networks, right. I mean Facebook has a billion people, QQ, the biggest Chinese network, there's almost a billion people. So imagine if those companies start offering TV programs, music, which they already are doing, bundled into the offerings, right. That's basically what's going to happen and the telecos and operators will have to pay for all the traffic without getting a dime from it. Clearly that's the future because if you're looking at scenarios around the world that can already be seen, we're living now in a world of broadband access and the complete convergence of broadcasting and broadband. I'm 50 years old, I'm getting excited to take my jacket off, if you don't mind. I'm 50 years old, I grew up in a broadcasting world. If you want to watch something, you watch it on television, you have to be there a quarter after eight to watch Colombo or Delos or whatever it is that we watched back those days, right. No longer. My kids are 17 and 21. That doesn't exist for them. Broadcasting is not a mode of operation for them. It's broadband. They watch whatever they want, when they want, how they want, paid, free, anything goes. That is the nature of what's happening today in a broadband society. The future is already here as science fiction writer, not Mel Gibson, what's his name, Gibson says. Automated translation, we can already talk to people through a device that comes out in Chinese, already exists. Imagine what will happen in education if two years from now I can talk to somebody in English into my mobile phone and it comes out on the other end in like 14 different languages. Perfect translation as we can see here in the Google Apps. Just ask the guys across the hall. Telepresence, no need to fly unless you really want to have a beer with your buddies. Telepresence works just fine. Augmented reality, superimposing data over meetings, locations, new kinds of interfaces, eye projections. I mean all that stuff is already here is expensive but it will be a reality very soon. I mean we thought 10 years ago you can't go on Mount Everest and call your grandmother now you can. That sounds like science fiction but it's true. Just give it 10 years we'll have the most amazing advances and issues from technology that you can possibly imagine. And we have what we call the real digital natives. Pransky talked about digital natives. He is a real digital native. Just a toddler playing with the iPad. They're used to this technology like this and you could say it's screen addiction. Some people will call it screen addiction. But what they're doing here is getting used to how people handle media and when they don't have this, this is what happens when people don't have this, the digital natives, they try to zoom a magazine. And this is kind of funny but imagine what will happen to those people 10 years from now. If you are not somewhere digitally available you don't exist. You don't exist if you can't be found. It's already mandatory that if you do business that you have to be on LinkedIn or Zing or Facebook to connect and be naked in cyberspace so to speak. This is Minority Report or Matrix Pure. We have to be on the grid because if we're off the grid we die. So real digital natives I think that's what we're looking at and we're living now in a world that I call the networked society. There's a lot of hope in that of course because so far in a disconnect society or the privileged were connected, about 300 million people in Western countries with high broadband now we have more. In the networked society there is a hope that we can solve very large problems together. And the networked society also means that we're heading into a future that I call broadband culture. What is broadband culture? What does it mean? How will this drive adoption of high speed internet? There's a couple of points I wanted to make today in the talk. Drivers of broadband content, data, ecosystems. That's just sort of a preview of what I intend to talk about in the next 24 hours. Just kidding. I hope I do get it done in my time here. But these are some of my topics and again you'll have the slideshow later for downloading. Let's talk about content first. Today just look at kids, you know, talking kids anywhere from 12 to 35. That's kids in my book. People of the Cloud, right? We're no longer people of the book. Kevin Kelly says people of the book are the past. That's a shame, right? Because I write books. I'd love you to read, pay for my books, right? But now we're people of the Cloud. People of the Cloud, people of the screen. And that is a reality. The other day I was in Hong Kong and the cab driver had seven screens. Seven screens, right? Amazing. And this was just completely normal. He was doing whatever he was doing, QQ, WiBO and all that at the same time. They expect a lot more than just data. I mean, we said earlier, it's not about technology. They're already, they're requiring that it works. They're expecting that it works. It's about what's in the data, right? I mean, that's the whole point. They expect a lot more than just mere free distribution. I mean, yeah, you can download anything you want for free. But how and why and when. Now we have convergence. We have television you can read and newspapers you can watch. I mean, the Wall Street Journal has become a TV program, right? Go to their website. It's all video. And CNN has become an outlet for Twitter. I mean, that's the only reason I watch CNN because I like the tweets. So whatever is and can go digital will go digital. Health records, money, music, media, everything. This is a scary thought. I mean, if you're in the music business, I was in the music business for a long time as a producer and also as a musician. Yeah, and then later on with the music industry, I wrote a few books about this. It's a scary thought because when it goes digital, the game is over at the old game that we used to play with distribution, charging people, territorial restrictions. That's all like, okay, that's a good idea, but doesn't really work here. I'll tell you why. In this world, this is a device on the left called the Aakash tablet from India. It's $30. Devices like this will be $10. The Brazilian government is considering giving every student a free tablet device that's costing $8 if they buy 100 million of them. And they are going to use those books, e-books to study with. These are useless without content, but equally useless without connectivity. So here's one lesson that we can take home already from this today. There is no such thing as a separate world of content and a separate world of telecommunications. There is not. Either in the future, we work together to solve the problems or we won't make any money on either side of the table. This is like a twin, the Siamese twin that we have to live with, its connectivity and content. And as Kevin Kelly once again, who is the chief Maverick, he called himself of Wired Magazine, the internet was built to do this, to ship information. Everything that we do online is copied, can be copied and will be copied. The internet is a giant copy machine. If you want to change this, turn it off, please. There is no way around this issue of saying that people will share things on the internet. That's what it's there for. Otherwise, we can move to China and even there, it doesn't work. It will not work to lock up stuff on the web and put up barriers for the upkeeping of outmoded business models. We have to do a lot better than that. I'll give you some examples, but basically what we see here is sharing is and will remain a key driver. The number one reason that people don't buy stuff on iTunes, I'm an iTunes fan, I'm stupid enough to actually put out money. When I buy music, it really makes me mad that I can't share a song, I can't make a ringtone, movie times out of the 48 hours. That's an insult to somebody who is going to pay for content. But still, it works for some people. But sharing is a key driver. We can't just turn off sharing and here's the publisher of Macmillan who says about piracy, it happens when motivation meets opportunity. Piracy and parenthesis on the internet is not because people want to free load and not pay under any circumstances. If anybody tells you that people don't want to pay for content, it's not true. Whatever studies you have, right, ask the right questions. I mean, look at this, if you're looking out all over the internet, Netflix, for example, in the US, 23 million subscribers paying 10 bucks a month for movies. How much people would subscribe if it was $5? If a song costs 10 cents for a download, would anybody bothering taking it for free? 480 million dollars last year was spent on Farmville, which is a Facebook app where you feed virtual pigs. Don't ask me why people do this, but I hope you're not one of them. $5.6 billion was spent last year on virtual content. I mean, people love content. They pay for content. So, basically, piracy is a question of failed business models. It's not a question of making Google or mobile operators or telcos or ISPs responsible for changing the business model. It's a result of a failed model backed by fast networks and even the president of NBC, who I think left after he quoted this, he said, the best way to combat piracy is to make content available. Okay, that's the bottom line, right there. Figure out the right business model people will pay because people are not, in general, trying not to pay for something when there is value. So, it has already turned out that basically what people want around the world is they want our world to be fluid. I mean, imagine you would have to go to the bathroom here, and when you flush the toilet, you have to put in your credit card, right? You probably wouldn't do it. I mean, but the water isn't free. Somebody is paying for the water. It's already prepaid to speak. So, with content, we're looking at a world where this kind of idea of having content in physical shape and form available is not so good anymore. People are interested in virtual access and fluid access, Spotify, Netflix, many other services like this. Content, the future of content is not about copy, it's about access. Collecting stuff and putting it on the shelf. Some of us do this because we like it. But by and large, today, if the link doesn't work and the music doesn't play, I don't care who you are. And the jukebox in the sky is YouTube. And anybody in this room knows how to download a plug-in to download stuff from YouTube, right? I mean, everybody does that. That is the biggest distribution of content. So, if you're in a telecom business, you have to think about this very hard because all of a sudden, the entire content business, that's $1.5 trillion a year, if you count everything, games and everything, right? It's switching from a copy economy to an access economy. This is a huge opportunity. Because guess what? If the costs are so low for distributing online and for finding the right match for your content as a writer, as a movie maker, as a musician, as a book author, right? Then it's a huge opportunity for all of us to get involved and think about education, and think about all the stuff that we call content. It's basically the rebirth of the content business. And I can't figure out, you know, I have lots of clients in the content business. I can't figure out why they're upset about this. The only reason they're upset is because they cannot control the copying of content. But in this system, it doesn't matter because you pay for access. Why does it matter if I have access to 100,000 movies or 3 million songs or ten movies? I can't watch them all, right? I can't eat them all up. They're not like chairs. Can't take the chair and run away that you don't have the chair, right? They're not rivalable goods. So this is definitely a way of looking at the future. And we can see clearly now what's happening. If you're looking at China Mobile, Vodafone, MTN, other companies, they're saying, okay, we're here, we're the big guys here, right? We're a huge industry. And there's a small content guys. It could be quite interesting for us to get involved with the content business. Not in the sense of take a responsibility, but in the sense of bundling things, right? In three years, all of the major economies around the world will see telecoms moving into the content business, not as producers, but as platforms. Bundling content into the networks. And this is a very, very big deal, I think, in this country as well. As Kevin Kelly again points out, we're moving into a world away from the file, the folder, the desktop, to a stream, attack, and a cloud. All my books that I write, I've written five books. They're all available for free on the Internet. For the simple reason that if they are free, you can enjoy them. If you want a physical form, you still buy them on Amazon just as well. Hasn't heard my business at all selling books. So you see mobile streaming clear. The forecast is huge. People prefer to stream music rather than download it. Many operators are already getting into bundling music into the network. Clearly a very, very large opportunity. We have unbundling, as you can see in digital music. Lots more people downloading individual songs, because now we can. Baseball, you can subscribe directly. We have the great unbundling of content away from the idea of saying, subscribe to cable or satellite. Now on the Internet, that's all happening. It's going to be a mass of niches. This is very, very good news for us. Because what it means is that even the small stuff has a chance to be distributed to Google TV or Netflix or Hulu or so, again, going back to the telemedia theme. I'm going to skip this because otherwise I'm going to actually run out of time. So just an example here really quick from Ireland. In Ireland, you can subscribe to a service that's much like TDC Play in Denmark to where the music is bundled into your mobile phone subscription. The same is true for Denmark, and it's basically free. You just keep subscribing and you can use the music for free. And that has really reduced the churn rate of the operators. That was a very big deal. Briefly on this topic of money, lots of people, especially here in your neighboring country in Australia, Rupert Murdoch has come up with the genius idea of a paywall. And really what you have to say, if you put up a paywall, you lose 98% of people because when you put a wall, they don't feel inclined to respond by saying, yes, there's, of course, a pay. They avoid it. But if you use a way of upselling people into a gradual process, the problem is not the pay, it's the wall. People are willing to pay if we find a way to offer enough value and to groom the process of upselling. You can see that around the world in various examples I go over it again a little bit later. Understand that it goes with this is an idea of freemium. You may have heard about freemium before. This is a secret to success in the content business is to make things free and then sell you something afterwards. For example, in the gaming business, which is by far the most profitable business and the highest growth rate in the last 10 years, many games you download for free and then on level 10 it says, you know, you've played for 40 hours, now you can give us $50 and you can unlock another 50 hours of 50 levels of game and 80% people convert. Okay, let's talk about data. Second point. Minority report is becoming a reality. Now the average person with a mobile phone has more information available than the president of the U.S. five years ago. I mean, I can look up anything I want. I can watch anything. I can watch on YouTube how to fix my motorcycle or how to go hiking in New Zealand. I can do that when I'm in the bus. So minority report is becoming a reality. Now you have screens and setups like I saw this at CES in Las Vegas where you have screens in your living room or anywhere in the house and you can project anything you want under those screens and bring up your bank account, your Twitter stream while you're cooking, while you're out there doing things in the bathroom in your mirror. I mean, it's becoming reality in a very large way. And the World Entertainment Economic Forum, sorry, World Economic Forum, says personal data is the new oil of the Internet. And this is actually not from them somebody else coined this in 2006. This is the most important term that we can think about when we think about what's going to happen with broadband. Because when we're online, we're creating a huge amount of data. Where we are, what we like, where we've gone to, our tax, our ratings, our commons, our trip advisor, commons, whatever we have, we create a huge amount of data. And that data becomes worth trillions of dollars to people because they want to know who we are, how they can sell to us, what we're thinking. I mean, the global advertising economy is a trillion dollars a year, a trillion dollars a year. How much of that money are they going to spend to find us? So basically, if we're looking at this connection here, data is the new oil and what really matters here is standards, transparency, trust. This is a huge challenge. I think the faster we can go online, the bigger this issue becomes. Because clearly, if we have high speed Internet, then we become really transparent because where we go and where we come from is all tracked and that data is all available. So this data oil will just like real oil, give rise to wars. I mean, we've had, of course, many wars about oil. I'm hoping that on the Internet we can avoid this by having conversations about standards, about transparency. I mean, this is a very large issue that we have to tackle. I think if broadband is due to grow, then this is one of the major issues. Why would I not want to have a chip on my mobile phone where I can pay for the bitch tall? Because clearly, when I have this chip, you can track me 24 hours a day. Maybe it's not legal. Maybe you wouldn't do it. You say you wouldn't do it, right? But just read some stories about this. I mean, clearly, if I'm worried about my personal data, about my trust, then this is a major issue why I wouldn't use it, apart from the content issue, which we just discussed as well. And this cannot all be about personal gains. I read this morning in the local paper here about how growth and profit can be achieved. But it can't all be about this topic, because when it's all about growth and profits, we're going to reach a ceiling and explode, like we already just about there. And we're going to hear about tourism later. This is a key issue there, of course. It can't all be about more growth than commercial gains. In this world, we already have a slew of data available. When you go to a restaurant in Japan, it's standard procedure in some places that you can pull up the data of the person you're talking to on your mobile phone superimposed over her head. You can find out the social profile. And if she likes a dog, you can move on to the next conversation, because you don't like dogs, right? You can superimpose augmented reality data. That's not allowed really here, or most countries, right? But it's entirely possible, right? Who decides this? This is a key question for the future of broadband, right? We have to agree on a public, transparent, common process. Who decides what data is available? And here's a nice cartoon saying that it's free, but they sell your information, right? Do you know what company they're talking about here, right? Google, Facebook, Twitter, YouTube, and other 500,000 companies who do the same thing, right? Nothing wrong with this, because we made a deal. We use Google stuff. They get to use our data. So when I talk about going to Auckland, in my Gmail, then Google pictures me a bunch of hotels that they know for sure I would like. Okay, I don't mind. They read my email. Okay, so what, right? But this is a big deal. We have to say it's a very important trend to think about how data is going to pay for stuff, the data that we generate. So let's talk about ecosystems. This is a very important thing I'm working on right now. My sixth book is called From Ego to Eco. It's not about eco green, the sense of green. It's about a different economy that we're looking at, basically the idea of a new kind of capitalist system. And so in the old days, we've had a world where everything was in silos, operators, ICT companies, telcos, content guys, studios, you know, all different places. But this is game over. If you're in the IT business, if you're in the telecom business, you are in fact in the content business, by default. Because you're a route in the content, you're dealing with the content, you have a chance of making it work, you have a chance of lubricating, and other people will take over if you don't. So the future is in interconnected business models. So governments and many organizations that I work with around the world, they have come to accept this idea that because we're now interconnected, we have to think beyond the idea of who is directly responsible for one thing. And this is a new way that's starting that's only possible because of the internet. If I can share content on Facebook, that wasn't possible five years ago, and you couldn't consume it. I can't send you stuff in the drop box for free, or put it up on YouTube. All that stuff is only possible because of us being interconnected and having to look at those models. Now, Umeer Haig, who was an economist, he wrote a great book called The 21st Century Economic Capitalist Manifesto. How it's kind of ubiquitous, but it's quite good. He's talking about how what's changing here is that we're going from this idea of a value chain to a value cycle. So it's not going in one direction, just ending, it's going around in a circle. And so this I think is very important when we look at our future is that we're heading into erection to where we are building like a spider web of an ecosystem. In other words, there will be no profit, there will be no growth, there will be no success for telcos, ISPs, operators, if there isn't success for the content guys and for the appetizers and the device makers and all the other guys as well. This is a new ecosystem that we're looking at. And imagine a little bit like this. Bacon and you pie, building a puzzle, we have content creators, we have appetizers, device makers, social networks, and so on. So this is a radical new ecosystem. So I would recommend you spend some time thinking about that. Today, when you're talking about how you can build an ecosystem rather than building an ego system, which basically says that I own this, you pay me, which is what we had for a long time. So talking about this, I own this, you pay me. On the left hand side, you see the prevailing paradigm on the internet today, which is basically saying that in theory is not allowed, but everybody does it. It's basically all the cool stuff on the web is not really legal when it's about content, right? I mean, we can download music from YouTube, everybody knows that that is not legal, right? YouTube itself isn't entirely legal in most countries and some countries, right? It's these are open questions. So I think legal, easy and affordable availability of content is a major factor in broadband uptake. And if we're sitting here today and we're talking about how we can have people adopt broadband internet and pay for it, right? We have to solve the content question. We have to create frameworks for the legal use of content. And that doesn't mean that we're going to force people to pay or get disconnected, right? I mean, there's a little bit more than that to it. We have to find better mechanisms. Our futures are really about looking at these issues, the bundles and niches, the free stuff. And this is the most important point, standardized licenses. When radio was invented 100 years ago, the radio industry, radio wasn't legal because guess what? Radio meant free content. Sounds familiar? What happened then is that all the publishers, musicians, the record labels as far as we had any back then, right? They said, no, you can't do this because nobody will ever go to a show again or buy sheet music or piano rolls ever. You will ruin us. So they fought for 15 years in the US. The Supreme Court had to decide that radio is not illegal, but you have to pay a license fee. Because 98.8% of the population was liking radio. What do we've got today? 150% of the population loves the Internet. If that's even possible. But do we have a legislation that says it's legal to use it like we want? We don't. We have to fix this problem. We have to create licensing scenarios that says you have to license the people on the Internet. And this is what's happening all around the world in developing countries. They're saying, well, this can't work because we can't always just say no. Okay, I'll go back to this in a second. One important point is about equality. I think broadband, of course, costs money. So how do people afford to go online and when it's too expensive, what do we do about this? And here's a slide from a great book by Wilkinson and Pickett called The Spirit Level. And it's talking about how people have more health and social problems in countries when there's less inequality. And unfortunately here, New Zealand is pretty high on this scale. I don't know if you would agree on this. I'm just putting this forth as a discussion point, right? New Zealand is pretty high on the level of inequality. And clearly, this is a major issue for the adoption of broadband because the key to making this work is having access for everyone. I do a lot of work in Brazil and I'm proposing to the government to tax exempt all Internet services for consumers as a way of doing away with the inequality. Because obviously that's a major issue. We're going to skip this because there's not enough time. Let's move to this question of open standards. I worked for 10 years in the music industry as a futurist and advisor to most of the major record labels and publishers. And it turns out that after 10 years, the major question is not if the Internet can make money because clearly it can. The question is who controls distribution and who controls the ego system. I mean, there's four companies controlling 80% of the business. Look what happened in the music business the last 10 years. In the policy of not allowing any change, the music industry has shrunk, this is actually not up to date, has shrunk 71% in revenues. Here's an industry that everybody loves music. There's great new artists. People are willing, demonstratively willing to pay for music that has not made it work because they're hanging on to an old model of copyright distribution. Nothing wrong with copyright, but the business model. What is the business model of the web? Obsession with control inevitably needs to decline. The newspaper guys are looking at this, the movie guys are looking at this. There is no solution based on saying that we can control what people do. If we believe that, and I think this country of course has unfortunately been a front-runner on the idea of unlocking people off the web, as my research has shown. We can debate this later. This is highly questionable, in my view. Because in this world, we're moving from the idea of a central entity like MTV to a decentral entity like YouTube. From the idea of money to many to many. And if we want broadband to succeed, and if people should be buying high-speed mobile and fixed broadband, they will do this because they can connect the many to many part. That is the powerful part of it. It's not to hear more stuff from CBS. We have cable for that. It's the many to many part. We're now living in a world like this, whether you believe the revolution bit or not, where there's no such thing as a consumer anymore. There's the people formally known as consumers to use a Prince phrase. These people do all kinds of things that contribute. On CNN, there's over one million people signed up for this service called ICNN to where you can upload stuff to CNN that they may want to use on the show. One million people. Think about this scenario of how many consumers, this kind of idea of the consumer that is sort of nailed down to a business model. If that's what we want in the future, then good luck. This is all about giving control to the consumer. With that, I mean true control, not fake control. Not control in the sense of Apple. Even though I love Apple stuff, I'm an Apple fanboy. It's not there. My control is there control. I'm still buying. That's fine. In general, I think we have a problem here. In this world, it's about open stuff, open technologies, open licenses, open policies, open business models. You can be closed like Apple and it still works. Great. But don't try that again. I mean, you have to be a genius like Steve was to pull this off. A jail, essentially. So, ultra-fast broadband will be based on these ideas. Open standards, open licenses, open policies. The idea of walled gardens is not sustainable. It has worked, yes. And it may work again, but by and large it will fail. So that's my proposal for the discussions today. If you're looking at scenarios like this to where I can't play certain movies on certain screens and there's DIM, essentially we need to think of a different way than protection because I think it breaks the ecosystem. The founder of MP3.com says, and he's right about this, the word streaming and the world download are nowhere in copyright law. Now we have a big problem here. Some of you are lawyers, I'm sure. Sorry for that. But basically we have an issue here. I mean, if these words aren't in copyright, what in the world are we going to do about this? I mean, 90% of people on the internet they're streaming and downloading stuff. So what are we going to do about this? We have to think of a new definition. We have to urgently think about the word usage right. Who has the right to use? Because every use is a copy. Everything that I've watched on YouTube, I'm copying it. Inadvertently. We need to switch this to an idea of usage right rather than copyright. Okay, I need to skip ahead a little bit here. In the meantime you can queue up some questions if you want. Sorry about this. Okay. How much more time do we have? 13. Okay, very good. Then I can slow down and badger you some more. Okay, so here's the question of balance. When we talk about the future of broadband and what people do on the web, there's lots of stuff happening that's completely new that's shocking. I did some work in Korea a few times and I don't know if you know this but there's 46 clinics in Korea where you can go if you're addicted to using mobile devices or the internet. 46, I went to one and not as a participant, even though I could be there very, very soon as well. Absolutely most amazing place right. So, I mean if you're looking at what's happening here is that screen addiction is rampant. I mean when you go for lunch in Indonesia with people right, everybody's on the table going like you know playing with their blackberries while we're eating. Why are you guys doing this? This is a cultural question. I think what's happening now is that because it's so new and so cool you know that we're doing it all the time but this will change. And then also if you ask the question about screen addiction and internet addiction ask the other question that you should ask right along with this is what about television right? Wasn't television a lot worse than anything that we have seen on the internet? I mean the average American watches six and a half hours a day of television right? I mean talking about addiction right, talking about garbage talking about bad content, talking about sex right? Hey that's television. So could it be worse than television? I'm not sure. There's a clear trend around the world that also says you know we have to sometimes unplug. In fact I would encourage you to have a broadband companion that says if you want to go online with fast speed here it is but don't forget you can also go offline and enjoy other things that also matter. I think this is a very important part to think about what's called the digital detox. This other thing is that of course now because we're so connected we can live in our digital bubble. We can tweet to each other and all agree that this is bad. We can we can do a campaign on Facebook and then all agree that this bank shouldn't be customized. We can do all these things but we're in a bubble. We have to get out of this bubble we have to also get away from the surface skimping of saying well I don't have to read a book I read a three paragraph summary. Well maybe that's true in some cases you know I do but I think that will play itself out over time and also the idea of bleeding data. Again if you want people to use broadband and get into all this stuff then you have to make sure that that data is safe, that there's a standard, that it's transparent, that there's rules, not necessarily regulations but there's understandings of what happens with that data and the companies who are in charge of it have to be supervised. And these are very confusing times I mean look at what Julian Assange from WikiLeaks says he says I give private information to corporations to you for free I am the villain and Zuckerberg says I give your private information to corporations for money and I am man of the year. There is considerable confusion about this. No wonder the consumers kind of feel like why is that, which way should this go? And then we have of course a sort of dual reality now what we are in Facebook and what we are in real life. So there are many issues of balance you know that we have to think about that I think ultimately will have to be looked at. So I would encourage you if you're looking at the future of broadband to also look at the future of balancing the connectivity with the unconnectivity this is a very important topic. Okay innovation you know I have about 50 telecom clients around the world that I talk to about what's coming and this is the thing that we hear all the time is like before you invent the wheel right you can't ask for what the return on investment is. What is the ROI? I mean if you're looking at the leading companies of the web today Amazon eBay Skype Twitter Google right what do they do? They experiment. If you're an engineer at Google you can get up to twenty thousand dollars to do something you get twenty percent of your time to experiment with some stuff that nobody has heard of. We have to stop asking for ROI every time we do something. This is extremely difficult in companies in large companies especially right I mean we have to think about what happens you know maybe we can redefine this and say what about return on involvement. A new way to judge what we do. This is very important for innovation I think because speed is so fast now that if we don't innovate quicker I think we'll be left behind in many ways. And the other question that goes with this of course if you see what kids are doing with technology now there's a complete reboot of education and learning that's coming. How do people learn? Who's the authorized provider? Who's right or wrong? I mean consider the whole debate between WikiLeaks and the Britannica right has been decided in the favor of WikiLeaks by the way that we haven't noticed. In all the stuff that's moving online you can learn anything you want right the MIT OpenCourseWare project publishes everything from MIT you can study at MIT online and they've had 30% more people who want to come to MIT. So putting education online with high speed internet is a crucial requirement I think also to solve the inequality problem. That brings me to the next point interdependence there's a great movie coming out by Tiffany Schlaine called Connected the Movie. I think it should come to Australia fairly soon. It's talking about how we're becoming interdependent. This is a very important topic that's also part of the broadband scenario we cannot expect to be successful in the future if our neighbors are starving. Because basically the way it works now is that because all of the stuff that we're doing is so highly interconnected that if we don't solve the content guys problems the artist problems the creators problems and the device maker and the advertiser problem we don't have an economy of content right. We have to create a system of works for everyone. A serious paradigm challenges is because so far you know the the paradigm was that we have to be independent right. We have to be universal music or Disney or you know Moguls or Murdoch we have to control everything. That's not going to work here. The only thing that works to solve this problem is interdependence which means that we have to rely on each other and this goes also for energy and other issues like that. If you're looking at these companies as one mantra that stands out as it would also encourage you to look at is we're switching from hypercompetition to hypercollaboration. I mean what is the point of the movie studios or the music companies saying to Google you should pay saying to the telcos you should pay. I mean the point is we have to collaborate to create a business model. That is what you do in a free market parenthesis is to create new models of hypercollaboration. Okay quick summary and then we can take some questions. First this is our future. Telemedia that means the convergence of internet and television the convergence of advertising with digital content, the convergence of telecom companies, ICTs and operators with content companies. Second this is a network society now. Whether you like it or not that means you have to consider what other people are thinking what they want and how they make money and how they can become more equal. The biggest problem we have in America for example today is that for the last 30 years they have been very busy making the rich richer and the poor poorer and evening out in the middle. And this inequality has led to quite a serious situation over there. But anyway we have to look at this idea of a broadband culture and say what does it take to create a broadband culture. It just it doesn't just take machines or infrastructure or fancy fiber cables or you know takes a lot more than that. It takes a cultural change, an economic change, a business model change and a change of mindset. This is something that we have to embrace as our new reality. The internet is a copy machine. We may not enjoy it, we may not like it, the whole shoemakers did not enjoy the train arriving because the horses were out okay. But that is our reality right. The internet is a copy machine. We have to find a way to have people pay for what they want in a way that works with them not with us. In other words when five billion people on the internet we can't threaten them with this connection if they do something that we haven't previously approved. We have to give them something that they will do as a matter of fact naturally and create a new economy. The content industry which is in new friends as I'm telling you. Switching from copying to access which is great news because clearly all the companies in the business of access and governments in the business of access are now also in the same business. Personal data is a new all of the internet. I mean if you're looking around the web today the number one discussion that's raging around the web right now is this whole debate about how the data that I'm creating can and should be used. Because this data has become my currency. When Facebook goes public Facebook I downloaded the other day my entire archives of my content on Facebook. You can do that now at the first time. Four gigabytes of stuff I downloaded the other day. They know a lot of the stuff about me if they run a profiling system which is easily available. They can figure out to a large degree what I am and what I like. And they're going to use this information to guess what connect advertisers. So the deal I get from Facebook is by Facebook saying you know what we connect advertisers that make sense with you. I don't mind that. I mean that's better than television right. To where I was disconnected from the ads right. In return I get something from Facebook and that will be free music, free software, free movies. Lots of other stuff. That is the Faustian bargain that we're making. So this is a big discussion. We have to find a way to stop the bleeding unless you want to bleed. I think it's perfectly okay if you want to bleed. I mean to a certain degree I'm saying like I don't care if you see all my stuff right. But only to a certain degree. Provisions have to be put in place to safeguard this and to have people also understand the consequences of the actions because it's a very powerful tool. A new ecosystem is being built. I think it's as crucial for New Zealand because what I learned from New Zealand by studying what happens here right. I mean we have to build an ecosystem not ward off the old ecosystem. I mean there's a way to go forward rather than backwards. We have to authorize what people want to do. That means licenses for content that they may not want to give because of other reasons. We have to accept interdependence and we have to say thank you. Thank you very much for listening to my diatribe. Here's my various things. I have an iPhone and Android app. You can just Google for Futurist and then you find it or Media Futurist. And I have a new book that's out called the future of content. It's on Kindle. I can also send you a free PDF if you'd like one to read on your iPad. So thanks very much and now I look forward to some heavy grilling and grenade throwing from you or pushback if there should be any. Thanks very much for listening. Look we do have about I'm going to make it 15 minutes so we can actually get it to get in and out of up 1 in 2. For questions for good. He will be on the panel later but I think there are some some people judging by the Twitter stream. People have got some actual questions they want to ask of you specifically. So does anyone in your audience have one? I've got a number. Now strict rules. You must wait for the microphone because we are being streamed on the web and people will not hear you unless you have the microphone. So I've got one up the back there. Thanks for a great talk. Daniel Specter Trinette. I mean we've got the demand we've got five billion internet users. We also have our own governments working with the old industries via lawmaking and especially insidiously trade agreements to retard what the internet can do. What do you you have a thought on how this should play out since I mean it's like the British red flag tax of 1854 where they're going trying to require a guy with a red flag to walk in front of a car in two miles an hour. How how do we resist our own government's impetus under the pressure of the old copyright maximum lists to get to this point that we want to get to? Yeah it's a very good question. I mean obviously the I think once you realize that the internet does not work on a system of control it works in the system of permission and this is it has been designed by the military first of all for that very point right of a system of equal distributed content and permission. So what happens today is when we use the web to do all these commercial things right we have to build something that people will opt in to use because it's undesired it's just unrestricted and it works great. I mean look at the things that really works on the web. Skype right why do we use Skype? Well it's free right it's distributed it made five hundred billion dollars last year selling other stuff right we love Skype because of what it does and we give back to Skype by being online and creating the network right it's a peer-to-peer system. So to answer the question more specifically I think once you understand that it will do absolutely nothing to throw a log or anything larger into the floating river right it will just be swept away or the river goes around it we have to create a rubber raft and jump on the raft and go down the river so the understanding of how systems actually work here this would be crucial I think people do understand this but of course there's a question of lobbying this is the same question as to why we still not have hybrid cars all of us rather the answer being because they don't make us much money for the people selling the oil. So there is a simple answer to this I think once we realize that the solution to this question of what we can do online is a question of common good it's not just a question of personal private good is the question of societal good so that question to me is more important than the answer of how Disney can sell more movies even though of course I wanted to speak and they could even sell more movies if if this was something that came about so as a simple question and answer on this topic of content what we see happening in various countries around the world is cut clearly I mean the mathematics are totally clear if we paid a dollar a week for music on the internet and if we said that we don't even want to pay the dollar we have the advertiser pay for this dollar that I should be paying right the music industry will be making four or five times as much money around the world if they allowed us to do this mathematics are clear in Europe it's 850 million people a euro a week we have a music industry that's three times the size a euro a week I'll even pay myself I have the advertiser pay why don't we have the system because it's not about the money it's about who gets the money so I think that basically we have to come to a point and say okay there's a certain logic behind this up to a certain point you know again comparing to oil same scenario right but if this point leads to criminalization I think then we have overstretched the point and of course they won't do anything for the actual content creators and clearly I mean if you're looking at the number one example in the world in this France the hadopi law and the three strikes law in France have not resulted into one tiny increment of sales for the content owners they've resulted in making lots of lawyers rich there's nothing wrong with that I I don't mind that's a democratic process right but we have to understand that the solution is in permission not in restriction and this is a long-winded answer and of course it's a political discussion now I had another question at the back there and then one up here if I can get a microphone up here so I've got a question about the relationship between where are you up in the back oh okay outside the pillar can I keep speaking yeah I've got a question about the relationship between ecosystem and a common broadband culture on the one hand and clear evidence of growing inequality on the other if you look at the massive technological changes that have occurred say since the mid 80s it's clear that over that same period social inequality economic inequality within and between countries has got worse and worse and more recently of course with financial collapses worldwide recession and austerity programs we've got a new wave of social polarization so my question is how would you advocate sustaining a common ecosystem in a broadband culture and a world where it seems to be becoming more socially and economically divided well actually I would debate that part last part you know that's not entirely true I think you're right is that many things have been polarized but technology and broadband and mobile services have brought equality to lots of countries like Brazil or India or Indonesia there's been lots of benefits to that regard but this is of course clearly a policy question and I mean it's a question of the government saying we make this tax-free we make it cheaper we subsidize this it's a question of preferences I mean again I don't want to keep comparing to energy but we have exactly the same problem there right clearly we could be making creating a lot more energy from things like solar or other means right but we have to emphasize and decide on it because there's a reason right and the reason is if we don't it's bad news and so the reason that we have to make broadband available to people and lower the prices and subsidize it because if we don't then the alternative is worse so this is a political question I mean clearly it's a question of what do you believe in I believe that if we had ubiquitous broadband at very low prices we would be able to increase the level of education the level of people connecting to each other the social value the creative industry right clearly the solution is there but it does require consensus one down the front here should be just keep talking hello yeah sit down Peter Thompson from Victoria University thanks very much good for fascinating overview of the issues something I'd like to pick up on is and you alluded to this in one of your previous answers is the question of who gets the money if you're shifting from you know towards what you call the the access economy and the idea that we can generate all these new forms of revenue through the provision of personal data how do you ensure that the content producers actually getting access to that revenue and how do you avoid the market failure that's very very likely in small economies where there isn't sufficient revenue going to the producers of content to sustain for example public service types of content minority content that actually still has a minimum single copy cost you know somebody's actually got to produce this stuff the and I'll just to contextualize one of the reasons I asked this is because I think there's a a rather pervasive assumption under the current government in New Zealand that simply by providing the new forms of technology and new forms of broadband the content will somehow manifest in its wake and well as any any producer will say they still need the money to actually make the content so how do you avoid market failure in that context well that's a that's a long question here but clearly I mean we have market failure right and we have utter and complete market failure in this regard is that anything I want can be gotten for free on the web and and anything that I may want to pay for I can't because it's not available right I mean you call that market failure I mean it's ironic right it's like Americans get to have Netflix for ten dollars you know watching any move they want stream all day and all night for ten dollars right but if I wanted in Switzerland if I want to pay a hundred dollars I couldn't have it right I mean call that market failure we have complete market failure and this market failure exists right largely because the means of who owns the distribution channels right for example the big TV studies are now clearly saying you know what if everybody in the world could have access to a remote system on your mobile device or whatever you want to watch any move they want even if they only paid one dollar we'd be rich forever right but there's one big but right the cable guys and the satellite guys are paying the bills today so they're not doing this because they have an existing place where they make money and there's existing cash that flows right but the larger good isn't considered here right so we have market complete market failure there how you would break through that log jam I think this is a very very tough question because basically it comes down to the issue of the common good right I mean is it better for everyone to do this and how do content owners make money I mean I work a lot with major record labels and with also major artists and others on their plans for the internet right and the answer is really quite simple is that instead of taking a small pool that we had before and this small pool right now has shrunk so incredibly I mean it's in music 2% of the western countries where iTunes is available 2% of the consumers are actually paying everybody's using iTunes the software right but only 2% actually paying to pay for the music right and that part is shrinking because it's a dollar each for lobby iPad iPod it's $20,000 I mean obviously that doesn't make any sense right so instead of focusing on a small pool of money and everybody tries to get a bite of the smaller pool right we have to build a bigger pool build a bigger pool if we can get 99% of the entire population that's using the internet to contribute to raising money for the content owners and if we then had a process in place like we have in radio that actually has a fixed license to pay them and and the process that would be a solution so my proposal is to say but ICT telecom companies operators and governments need to think about building a larger pool that has money flowing in from subscriptions from advertising support from data as as oil right from taxes which we have in Europe you know we have to pay taxes for television if you want to pay taxes yeah you can do that so you create a larger pool and that large pool has to translate into money for the artist clearly but this is a question of public consensus in france again the consensus was you know what we do is we force everyone to buy from this one provider or maybe two for instead of common apple right if you don't we'll kick you off the internet right what does that remind you of you know I I don't want to say but you know whoever thought this up probably has his email printed out and read to him okay I've got time for one more question which I'll just take from the front here microphone man or does someone else have my oh someone else already got the microphone no and and I forgot to remind people to to introduce yourselves when you're asking questions so that everyone can know who you are yeah David thank you window equal com that was advisory for Melbourne good really like your presentation in the sense that you highlight a lot of good issues there and everyone agree that content is a big thing and also you highlight connectivity and you touch on to make to make it accessible to everyone it need to be reasonably priced you think that that the government and the regulator should look at universal service obligation for broadband so that it's just like your telephone service it's of it's a subsidised for rural remote area and funded by the metro area and that would flatten the the access ability for everyone and that would create a greater opportunity for education and e-health and lots of other opportunity thank you very much what's your view please thank you yes well I think there's two things need to happen in the legal arena one is to make access a legal right like we have in Finland if you can't get online you can sue well maybe you wouldn't but that should be a legal right in my view the second one is that if you own content you have to license it and you have to do something to make it work you can't just keep saying I'll get more money from the cable guys so I don't do this right I mean that may be economically speaking interesting to you but society wise it clearly doesn't work so those are those are two things and there's a few other ones but but clearly the question is that that I've talked about the several times I said when we get to a free market economy we always get to the point to where it's about profit and growth and that point is we have reached the ceiling of that argument because if we continue this way it's basically there's a top and we've maxed out and that's it it just won't solve itself you know climate change for example is the biggest market failure in history I mean global warming clearly has not been solved by free market economy and so the same thing here is I'm not arguing for other kinds of economies here right but we have to face the fact that we only solve this problem if we figure out a joint approach to this issue right so those two two things that I would recommend on the legal side okay thank you I'm gonna ask one last question Gerd and it's from the Twitter feed New Zealand is a little came a little bit famous globally for for the closing down of a content source recently mega upload yes did you are you aware of that issue and you have any comment about mega upload you'd like to make well yes I mean as I said earlier I think lots of people agree on this right the only reason that we have piracy is because we have not nailed down how to have better alternative right would be much better to spend all your time energy on solutions of making it better than chasing the other guys who are not good right I mean it's the the emphasis is in the wrong direction right nobody's saying that these guys are you know they're doing the right thing or not but clearly be much better off spending our time figure out economic models that work for the entire population then to go after a few people who have been upsetting the apple cart okay well look good thank you very much for for your opening comments you will be joining us on a panel in a moment and we will be moving on I think one of the most fascinating parts of your conversation is the concept of the ecosystem and one of the bad news bit of the bad news is that ecosystem there's already an ecosystem and one of the things about ecosystems by definition is they're self healing to get changed when ecosystem is actually extraordinarily hard and I think that's one of the things we're going to have to focus we're going to be focusing on a little bit more in the next session could you we will be going to morning center moment and we will be coming back in here at quarter to 11 but before we do that could I ask you to once again thank good for a fascinating presentation