 Okay, bomb dear Good morning, as I say in Germany Don't be worried in our one continue to speak German. So we get an image here So thanks very much for for being here. Thanks for Jura and NBS and everybody there to actually invite me to come here so Jura and me met in Amsterdam at the at a conference called picnic and we connected afterwards on Twitter and and Jura's the reason that I'm here and actually speaking to you today is very interesting is both the real-life meeting and The internet connection that we made right it teaches a lesson that we need both I Will need to meet in person and we need to connect on the web So it's not either or right. I think that I have met many people on Twitter and slide share on YouTube It's a very powerful thing that's happening I was also invited to speak yesterday at the funder sur Dom Cabral So I also want to thank them for helping to bring me over here and this was a very good session yesterday We had with the CEOs. Here's my Twitter handle a G Leonhardt If you want to connect feel free We're going to make this a presentation available at mediafuturist.com for downloading the whole thing So it's about a hundred pages. You can download sometime tonight when I get back from the bar with Jura So I Was born in Germany, but I moved to America to be a jazz musician When I was 22 so if I speak too quickly in English just wait for tell me to slow down, okay? And I I've picked up a bad habit from America. So What does the future is do? Well, it's really a simple story. I look at basically ideas Ideas that I see I work in Asia. I work in Europe. I live in Switzerland I look at ideas and I try to make a connection for my clients. So that's why I do I try to collect ideas And I have clients in the telecom media entertainment communication space Here's a couple examples from the BBC to Google to Nokia to Agencies to ITV and so on and so on I work with a team of people around the world who are also futurists I'm not a futurist like Ray Kurzweil. I don't think of 50 years from now I don't believe in the human machine substitute I look at the next two or three five years. So for me, this is the present So the story I'm about to tell you is very much about the present Because one thing that we have to think about is we have to find a way to have foresight in our planning Because many of us of course are running businesses. So you're always busy chasing tomorrow You know chasing the immediate thing, right? It's nice to have some foresight I have an iPhone application if you have an iPhone just search for a media futurist as a free application We'll also be out on Android next week So futurism I I took some inspiration from the chief of Google Eric Schmidt I watched a lot of videos on the web from Interesting people and this is what Eric is saying about the future My view is that that you ask the question if I may answer to the wrong order the right way to answer the question What does the future look like and then how does everybody's models adapt to that? That gives you the question of the day What does the future look like it and how do we adapt to it? The future in Brazil is obviously different than the future in Switzerland or in Indonesia So I cannot talk a whole lot about Brazil and I apologize because I don't know much about Brazil It's my second visit. I hope to learn more about it in the future. It's the microphone. Okay. Okay good So The record industry the music industry is famous for doing the other way around All right, see what the future looks like it and try to prevent it So the success of the music industry show speaks for itself right the industry has been reduced by 50% 30 billion to 14 billion if you're lucky So we wait another five years will be minus five. We have to we have to pay for them to live So What does the future hold? How do we prepare for it? That is the key question of the conversation today? There's a great saying if Henry Ford went to the people and he asked what they wanted they would have said that one faster horses Instead he made the car So we cannot always go and talk to people and say what do you want now? We have to go a little bit beyond the obvious All right, we have to use our own imagination. We have to have some foresight especially now in Brazil because you're right on the verge of Broadband mobile you have a lot of young people that it's exploding You need some foresight If you only think about tomorrow not the day after tomorrow, you won't have enough foresight Around the world. This is what Eric Schmidt said at the Barcelona World Congress on mobile He said from now on Google is all about mobile first Mobile first This is a very big step for Google and of course it's happening as a response to Twitter and and to Apple as well But mobile first that should be the way that we think about communications The computer is the past Right in developed countries the computer is everywhere. It's being replaced by the mobile phone my mobile access Right look at the numbers here for a mobile usage. This is an old number from 2007, right? It says 44 million people in Brazil will be using mobile Internet in 2012 and this is an old number Right, let's make it a hundred million If a hundred million people in Brazil are using the mobile Internet at low cost with cheap devices It changes everything that you do It changes how you sell it changes how you do politics it changes how you get media It changes everything at not all to the good of course, right? That's another discussion but The chief of Google of course has no you know making that shift in this direction is quite obvious for them. It's all about this Not this phone, but it's all about this Mobile social network real-time in Control that means the customer not you is in control That's not get confused about this right When people get connected they get control. It's as simple as that Growth of mobile phone 10% of mobile phone penetration gives 1% growth in domestic product in GDP So the economy of countries is directly related to broadband and to mobile The more connected the more growth the more development at the more income in any country around the world Every single government around the world the number one objective is to connect people To connect people so that they can sell they can communicate they can learn Right. So what we're going to see here is that these things will become the number one operating paradigms of Communications and real-time means when you search Google you don't want to know what I said a year ago You want to know what I said five minutes ago You want to see the latest thing on the brand you want to see the latest offers and so on so real-time? It's a very very big thing So this actually again is an old number. It's 1% now growth of GDP for 10% growth in mobile And of course the Brazilian government has just not you were told me on the way over here Said that that broadband is a top priority in Finland you can sue the government if we don't have internet access All right in Finland is a guaranteed right the right of free speech includes the right of internet In France, of course, they want to disconnect us Right because we're doing something that they're not supposed to do Kind of interesting, but of course in France everything is possible. So What we have now is kind of scary right we're sitting here and we're looking you know if you're my age You're looking at this stuff and you say I don't understand. It's like what is this? This is crazy. This is madness, right? Why are people uploading 65 million photos to flicker every single day? Who has the time? People uploading 14 hours of video every minute on YouTube Who's wasting all that time on this? Why? 8.6 billion minutes spend on Facebook every single day 8.6 billion minutes Wow, just everybody's become a huge time waster, right? So you're you're wondering about this. Why is this happening? Right, this is very scary. I think for a lot of brands What we have here is an unprecedented change in communications and in commerce Keep in mind when we talk about social media that word is useless right really what we're seeing here is social business It's a change in the operating system of business Not just in media It's a change from being a social like television To doing things differently because we're connected As nothing to do with Twitter or Facebook, right? So if you think that you can fix the problem by having a Facebook account, then you're looking in the wrong direction It's a lot deeper than that So back in a little while ago, I used to be a student of theology. I have to admit, you know So I know what happened here when Gutenberg invented the printing press Was the same big change? All of a sudden people could read the Bible in different places and they could be translated into German Which was unheard of right and you did not have to go to church to listen to the Bible You could read yourself if you could read right The church hated this The church said you can't print the Bible is not you're supposed to have it in Latin and spoken or handwritten Because only we can do it So Gutenberg made a deal with the church All right, and the church became more powerful as a consequence of the printing That is exactly what's going to happen in media None of the media companies like the internet really Because it disrupts the scam right it disrupts the idea It disrupts the idea that they are the broadcaster, you know the monologue Right now they have to have a conversation But every single media company is now making deals with the internet All right We will see all the stuff that we've seen the dangers merged over into just becoming part of the solution And whereas this is going to happen first you have to answer question is not gonna happen in America It's not gonna happen in Germany, Switzerland Europe is going to happen in the so-called developing countries Brazil Russia India China will happen here first before it happens in America The problem of downloading music or getting everything for free in parentheses will be fixed here first Will not be fixed in America right because the business is stagnated It's not moving. So I think you have a great chance here to explore it the explosive market people connect into the internet We're going to take questions by the way afterwards So just kind of save them or Twitter them if you want not that I have time to look at it But here is the change if you're in the marketing business fine Expect 30% of all appetizing to shift to digital interactive mobile Social and video in the next two to three years We've had a recession and of course things were delayed everybody pulling back right now We're going back into the flow of things every single brand is saying. Why are we doing big ads and rolling stone magazine? Can we do an iPhone app? I can we make a video channel? You know when I saw the trailer from NBS in the beginning I can just feel the creativity is sparking Right that is what you need you need to move in this direction because that's the future Television newspapers radio will not go away mass media will not go away. That's clear Television is just as important, but it will converge with the internet Television on the internet will converge a hundred percent Meaning all of the shows will be catch up TV. You can watch at any time any location any device any platform, right? It will converge So your job if you're in the marketing business is how to combine the mass medium with the niche medium with the internet That is the mission Looking at this projection. I got a couple days ago from screen digest right the growth of Content on the mobile. All right. This is mobile music mobile games mobile TV video and the app store The average person that has an iPhone Spends ten dollars and ninety cents a month on buying applications for the iPhone Ten dollars a month on buying stuff. That's otherwise free That shows you people are buying stuff when they see value and when the package looks good All right, the money is there Anybody that tells you that people aren't buying content on the net on the internet is not true We just haven't found the right package And that's what we can see with the iPhone and the Android world is that this kind of growth is going to be phenomenal Every doctor will have an iPhone app every hospital will have iPhone apps or phone apps Not just the iPhone. In fact, I think the iPhone is the smaller part of the equation But all of that will happen in the next couple years. So this kind of advertising I didn't pick this by purpose. I know a cook is a client, but this kind of advertising Is noise on the internet and on the mobile. We don't want noise That's why advertising on the internet today is pretty much useless CPMs make a noise banners interruptions. We just tune out What we need on the internet today what we need in the future for advertising is this is Attraction This is an application for the BMW that you can download and play for free That's also an ad right, but it's also a game. It makes sense. It's relevant. It's entertaining So we're moving from noise. This is true noise Bangkok, Thailand. I shot this myself This is a huge screen in Bangkok broadcasting to everyone Right commercials all day long And imagine the noise, you know, this is like obviously nobody's listening, right? I mean, how expensive is this? And it's useless. That is not our future our future is attraction Our future is going in this direction the iPad. Let me show it to you now This is what it looks like. I Happen to have one. He happens to have one Well, as I said earlier, it's not Apple. I'm talking about here I'm talking about the possibility of reformatting media and content right on an iPad on a phone on the tablet And those tablets will be $10 from a Chinese manufacturer, right? You can do all kinds of creative things with ads That people perceive as content, right? This is a whole different world look at this projection of business and consumer mobile applications spending on applications seven billion dollars in 2012 spent on business applications for the mobile Again every university will have an application where you can learn when you're in the car on the bus Every single brand will have a way of connecting with them through mobile application. This is a huge opportunity Also looking at these stats from from a reasons would have been study is saying that mobile phones are the strongest social connector in the world And I'm talking about interconnect internet connected mobile phones, right? Messaging emails and so on and so on but studies have shown in America that 74% of Americans would never give their mobile phone to somebody else Not for five minutes The most powerful device in the world is now becoming available for you to market and to find people to connect with people So this is a very big trend Now we have book publishers Saying all this is pretty cool because We can sell electronic books on the mobile platform, right? Of course, there's a big problem here, right? if we're thinking that we're going to get the same money then for the real book and Put copy protection on it and force us into all kinds of schemes. It will go the same direction than the music industry So what needs to happen here is we have to find standards Google is a master of this This is basically the idea of saying the rising tide floats all boats The rising tide floats all boats when the internet connects people and we are connected on the mobile phone Everyone that goes with it rides along with it, but you have to be in the boat All right, if you stand on the island you wait for the boat to go by you're not part of the tide You have to actually be on the boat and it of course we're saying our Facebook or YouTube none of that is making any money right So if you point to Facebook and say well Facebook is break even that's great YouTube loses money and It certainly isn't paying the artist for the videos But it will happen. It's just delayed, but it will happen It took a Google two years to stumble across the business model for Google Which is those tiny boxes that you see on the browser, right making two point six billion dollars a month now and Google is gearing up to make twenty five billion dollars a month in Mobile video search real-time Advertising that is the rising tide. It's also going to float you but look at the projections here Pricewaterhouse Coopers the projections of growth in video games, right eleven point eight percent and Followed preceded by about 16 percent Television is going to increase again, too. That's the interesting part Because television is the internet now. I said it's basically sort of overlapping right and internet wired and mobile Look at the growth here, right? Look at the bad part of it newspapers are declining eleven percent radio declining directories trade magazines But in the sling now the the overall growth is much bigger pretty much across the board except for maybe newspapers So what's now happening is that every newspaper is becoming a video channel? Every newspaper is becoming an audio podcaster Every media company is going into parallel media a television station has blogs They have podcasts or of course I make videos and so on but it's all called cross media Bill Gates Has said years ago and he's a very smart guy We overestimate the change that will occur now and we underestimate the change that will occur later in the next ten years I'm telling you now we have already had now ten years ago and we thought it was going to happen then You know in the in the first part of the internet, right? But the change that's coming now we much bigger than anything we've ever thought of it just taken longer So it's basically the internet is not an organic development like this. It's a it's a hockey stick It reaches the point of take off and it just takes off So keep that in mind when you're planning right it's like an on off switch Back to what I said earlier about the future So if this is our mantra, right? This is the music industry Great success America music industry 14.6 dropping to 6.3 dropping towards zero Because their paradigm again is the idea of saying how can we prevent the future at Bobman the head of Warner music? Last week or two weeks ago at the earnings call where they presented the numbers of the company, right? He said basically that free streaming of music is not positive For the industry and clearly we won't do it Okay, what does that tell you it's like is he running the universe like? People are going to do free streaming they already do You're not going to license it well, that's great, but I mean which way this is going to go right you're going to say I don't like this, but who cares Do you make any money? The question for artists writers composers authors is not whether you can stick to some sort of principle from 50 years ago The question is whether you can get compensated for your work All right as Larry Lessig creative commons has said Compensation not control that that's the goal right you want to get paid for your work So it's not about those principles that somebody and some boardroom things up right it's not about that I call these toxic assumptions In your mind that poison you Think about maybe some of those are in our minds as well One assumptions we can enforce a different future Than that which our customers want Wow, that is the music industry in this purest form If the book publishers go in this direction, too, that would be terrible. I'm I published books I Would much rather have a person pay one dollar for my e-book and Get a good piece of that then charge twenty dollars for a printed book with a truck driver makes more money than I do And that's the truth right the printers the truck drivers the ink makers make more money than the author Is that the problem the author has to get paid right not the truck driver. They have to get paid otherwise The other thing is you know the toxic assumption we can ignore the user's needs and behaviors and just mold them We just make them do something different 2.1 billion people connected to the internet 4.2 billion on mobile phones But we're going to tell those people that they can't listen to a stream of music because Edgar Bumpman doesn't like it It's not going to happen the paradigm of saying we need to watch out for votes good for us because we need to make money Of course, that's true. Everybody has to do that But if all you're concerned with is your own revenues, you are in deep trouble now Because now everything is connected We're living in a world of an ecosystem if you're a telecom company You have to think about what's good for the authors and the content owners If you're in marketing you have to think of how you invent products that are a win-win situation You have to think about something that fits so The last point is it is the worst one right more control more money. I Mean this is business school right it's quite simple. I didn't go to business school obviously, but If you go to business school ten years ago, it's quite simply control distribution you control production You control marketing control everything you make money. That's it and you make more money tomorrow That doesn't work anymore now because of the Internet Because when you try to control what users are doing they disconnect from you you have to actually give the control to the user That's what's happening in branding and marketing and media and technology give control to the user So we have a big challenge now We have an open Internet where we have closed minds many of us Like okay, we can go in on the Internet in fast speed, but our mind is the speed of a snail Because we're old. That's the other problem of course and we use email So here's a great quote from one of the oldest guys who's otherwise quite Interesting he bought my space so Rupert Murdoch and he says This is a quote you had to believe this. I mean, of course, he's 84 is a extremely brilliant guy But he said this last week about books He said we don't like 999 as the price for an e-book, which is the Amazon Kindle, right? We think it really devalues books and hurts the retailers That's just a very good fit with Bronfman now. Isn't it like I don't like 999. I think it's too expensive Okay, I think I'm with you on this one and Would you rather sell 2% of the population a book for 999 in e-book or would you rather sell it for 199 to 90 percent of the population? I mean, is that so hard to understand the logic Not really So I think those are issues. We're going to have to look at right We have this traditional debate in the content industries, you know Because I work a lot with people who are producing content that they think of the world like this They think of content as king And of course, I agree to a large degree that is the case obviously because that's how it all gets started Unfortunately, the world is on black and white Alright, so you can't say a content is king. You have to pay before anything happens now. It's the context that is king Also, right? Who is recommending it? Who has rated it? Who has shared it? What do my friends say about this? That is happening and of course relevance Do I get the right content at the right time? So if I'm traveling in Sao Paulo, do I want to know about great restaurants in Hong Kong? No I want about about great restaurants here That is relevance and that is convenience And this is the great hope for the mobile phone all of these things are happening on the mobile phone So what you can sell there becomes not just the content But the whole package when you sell music you don't sell the zeros and ones You sell the rating the playlist the curation the other media the access the membership the fan situation you sell everything around the music That's what we're going to see and for branding. It's the same thing right this is the very simple problem in a nutshell in our minds, right I Should be talking because you know, I like control just like everyone else likes control Controlling your destiny your security and all these things so in the old days. This is the paradigm, right more control more money And if you're not 15, then you know what I'm talking about Because that's how it worked and we felt very safe With this model. So if you're a brand You would not go to your to your clients and you would say you can get my stuff for free in Return you put up videos about my stuff and you can say whatever you want That's a crazy idea That's exactly what Ford did last year in a Ford fiesta movement is called right giving away free cars in Return for making videos about the car and you could say anything you want So what's happening now is that we have to de-emphasize the control That is our only way to move forward right it's not a question of principle is the question of moving the money Into one direction and finding multiple new sources for new money It's not that we don't we're going to forget about having control of course we want that it's not an absolute question We need to however figure out if we keep on saying that we want control do we just forget about the money If you're in television or if you're in films or publishing if you like control more than money You won't be here in three years If you are a brand and you want to control the message you want to control you won't be here in five years Because the user wants a piece of that control now That's and that's what's happening pretty much across the work So in a black-and-white world black-and-white world We have a yes or no on the control right so you can say okay. I Give up all control then your Skype And or maybe Google to some degree right you're somewhere in the middle right or you really like control You keep on moving the button around right this is a strategy. It's not about yes or no It's about the right amount at the right time The most successful brand that is utterly controlled and dominated by one brilliant guy Apple. I love Apple stuff But this really pisses me off I Still use it right because I have decided to play along Apple is the most successful company in the entire period of the recession for the last two years people buy expensive stuff regardless of what happens and They control everything So you can say okay, it works it works it can work But it's the exception. I Would not recommend you try this First of all, nobody is like Steve Jobs. That's one thing the other thing is it's very expensive And it has one chance of surviving. It's a very insular thing So what we're seeing here is that the answer to control is to say it depends It depends when you can be open when you can be controlled think of Google Who thinks of Google as a company that is controlling? Anyone here? Yeah, you can you can be frank, right? Yes. Okay, so there are those voices and that's good Right, but by and large people think of a company. That's not like Apple Because they give us everything for free Google is making free what has made money before email operating system Mobile documents calendar pretty soon a box like this So Google is perceived by many people as not being so much about control But Google of course does not publish the source code for the search engine Google has a lot of control of our data So Google has found a pretty good compromise I think in the open and control paradigm So when you run the brand, this is what you have to do You have to say at what point can I afford to open up and Give something that the user feels like I'm giving something and at what point should you find a way to? Retain a bit of control. This is a very very difficult proposition So the fiesta movement is a great example right for gave a hundred cars away you could apply by making the video This was I think two years ago in the US All right, and you would be published as a user right and you can publish any video you want about the fiesta Was no censorship you could say it completely sucks a terrible car Just publish it result was 14% more sales Right of this exercise I because it has to do with trusting the consumer it is all around us Even now in this very room Yes This this thing is all around us right this shift from control to open That's happening across the board and it's can be a rather painful exercise I basically today control does not equal money anymore That is something we have to subscribe to What choices do we have? We can keep on saying the law allows me to have control over you the user whether you download the picture Or the software or whatever it is, right? That's all true, but does it make money? Do I get compensated? We're switching from what I call an ego system to an ecosystem You have to look no further than America America was all about domination control power Now America is starting to say eyes is not really working out so well with the ego system. Maybe we can collaborate All right, America now wants to collaborate. They've never learned how to collaborate America wasn't about collaborating Now that's shifting to an ecosystem. The future is good for companies that know how to build an ecosystem To make money for the other people around themselves and for themselves And you can say about Google what you want But Google is trying to make this work and Google is trying to create Ecosystems for everyone and it's not an easy position to be in given the history So iTunes Apple right this is what they do and we happily change to iTunes and we keep buying That's again is an exception, but it's also sort of interesting to see in this world closed versus open, right? the iPad The Google tablet the App Store and Android, right? It's not a question of what will win But basically what happens initially, of course, we are happy with the App Store with 220,000 apps from divorce apps to or whatever And now we're switching to an open ecosystem I think Google and Android of course have chances of really growing into an open system both will coexist But do ask yourself the question if you're in branding or marketing can you afford to be closed? Spend the money on this kind of branding be as brilliant as Steve Jobs is can you do can you really do this? What are the chances that you can do an apple? They're very slim So I wouldn't bank on that Here's some recent developments. I want to share with you just to sort of get the juice flowing This is an application by sports illustrated Which is now, you know the bath suits and stuff. Yeah, I haven't been in it. I'm just saying but so They have a new thing that they do on tablet computers and I show you what it looks like so you can You can sort of get in a field. I'm the editor of sports illustrated and here's your new issue We hope you like the cover Let's get a look inside Okay, here are the latest scores and news stories. Would you call this a magazine? It's television, right a television or is it a magazine or it's in a newspaper. I don't know who cares I'd basically magazines are becoming cross-media I'd audio video text social networks connecting tweeting all in this thing And are we going to pay for this? I think many of us would probably be considerate or maybe bundle it into something And this is still a difficult question So the user interface make interfaces make all the difference If you think about this for a second the computer clearly is a work tool The iPhone or the Android phone is sort of kind of work, right? But we like to play with it So now again when you when you go to a bar and you meet another guy you don't talk about cars anymore You talk about your iPhone apps And you say which apps do you have this is kind of work, but not really The iPad not tell but is definitely not work Right It's touching. It's immersive. It's reading books. It's entertainment, right? There's great hope here for publishers if they keep the price right and get rid of the copy protection This could be a very very interesting thing in the future. These devices will be given away for free By companies in the hope of you subscribing to their content They will be given away from the lives of Nokia, Samsung and LG for free if you do your banking To the device and they get a piece of your transactions Every single African will have one of these boxes presented by somebody because they don't have banks Real banks they have to use this They will also measure your blood pressure and whatever it is if you so want and transmit it to your doctor So you can look at the latest chat about your health problems This is the future that we're going. This is a vast opportunity And I think if you're in the business of appetizing you have to make sure the appetizer are going to come along for this soon This is very important to fuel it, right? If you look at what we have on the computer It's a I call it a flighty situation when you work on the computer. There's a thousand things you can do Click on the email doing SMS. You're constantly distracted, right because it's work a book is not Distractive When you're lying in bed, you're immersed in reading Paula Quello's book Whoever book absolutely my favorite author, but you're immersed, right? You're not disturbed by emails when you read a book At least most people aren't On the tablet. I call this Emergent 2.0. This is you can touch the interface and pretty soon you can project from it You have media. It's a story There's huge potential in this sort of scenario, right especially for books Think about this for a minute If you student around the world has to buy books for learning Africans don't have books. They can't afford to ship the books from Europe to read about the Harvard Business Review Study If this book is available as a subscribed service as a bundled service into the mobile phone How much would it cost? How much money would it make? How much money would it save for governments to put the entire education textbooks on mobile devices? That is our future That is the future of reading stuff. That's about education. It's the future of Wikipedia in a way completely interactive overlapping with existing information This is the iPad showing the New York magazine New York a magazine in a store somewhere that somebody filmed when it came out Now if you're in the advertising business, right, you have to think about this This is advertising for the lean-back consumption somebody on a couch Doing content advertising becomes content If you imagine over the screen to have a big banner saying buy buy diapers now There's no going to work This device will know who you are where you are if you allow it What your preferences are what you have opted in at all the information that sounds very scary, of course on one end But on the other end it will provide stuff to you for free As a result of what you're doing there providing the data, right? This is not an easy issue But it's something that we're seeing I think when you expect a lot more of this Superimposed reality over the mobile phone I think called wikitude The wikitude world browser can be used to examine our environment to find what we as humans use in our immediate surroundings for clues data and information that help us make decisions Wikitude the augmented reality browser. So what this does is you hold up the mobile phone and you see information Superimposed over the screen at any building any landmark or so, right is integrated into the screen This will become a standard and even scarier when I'm on the date I Can hold up the screen identify you go to a Facebook profile? As we're dating and I can decide not to pursue the date, but Anyway, imagine what this could do for personalized engaged conversational marketing if we allow it and Here is why we're going to allow it We're going to allow it because the benefit of what we're going to get back and return will be so huge That we will take a limited approach to saying we'll share some of our data Including location-based data in an age of course already widely used We have concerns about this but this is something I think that we can solve of course. There's lots of issues here With books, right? We're approaching the Napster moment anybody here remember Napster from ten years ago music Right of course was big in Brazil, right? 75 million downloads in six months Okay, now what's happening with books is this two lights two cameras and Where the action happens which is an acrylic platen and a book holder Covered into a box liner to use it. You simply load in a book Like so center it on the cameras and Press this button Capture two pages captures two pages. There's a hundred thousand people or so doing this now with every single book Capturing books so event make those downloads available for free at free is going to happen to books How can we make money with books when the copy is free? Well the answer is of course to an author you never made any money anyway, I Mean to most authors, right? This is a concern of course for popular authors All right, so again as I was saying earlier most of the money of a book is not made by the author So if you can find the digital way to deliver this that gets you paid everything should be fine All right, this is the way forward that we're going to see for what I like to call content 2.0 The future of content is compensation not control This is very hard if you're in the middle if you're a publisher a media company a rights holder You don't really like this idea right because you're selling the copy So It's a tough place many of my clients are on this turf and we are trying to figure out business models How to connect the artists and the writers? This is a machine that does three-dimensional printing anybody has seen something like this Okay, 3d printing allows to print any object and The plastic mold now that that device used to cost a hundred thousand euros now. I think it's two thousand You download a design a cat design from the internet for a cup or a shoe A robot, you know, I don't know something and you can print it You can print physical objects These devices are going to get so good that you can print a Nike shoe All you have to do is share the design feed the information to the machine So if you're thinking that stealing and parenthesis of content is restricted to digital stuff You're on the wrong trail, right? This is going to happen to a lot of things right and now there's replicators that can make replicators There's 3d printers that print 3d printers So the entire industry the the chief of Sony said last year at CES Sony does not sell stuff Sony sells services and experiences Entire industries are shifting over to sell. Yes, you know We sell cars, but really we don't sell the car because pretty much every car is almost the same now We sell this service the experience the brand the feeling the soft stuff is what you sell Why do you buy something you don't buy it just because it's good stuff right because of the experience? So talk about experience, right? Many of us are on Facebook now, there's a new thing happening on Facebook called social games Anybody know about Farmville if you have kids you may know about this, right? Virtual business last year virtual items were worth six point two billion dollars People buying virtual flowers for each other, right? Just to show this example. This is not a friend of mine I'm just showing example. There is this amazing Facebook application called Farmville. Some of you may or may not heard of it and it is So addictive and I've fallen in love. So basically what you do is you create your own farm and Get money and coins and all that things and you can buy like strawberries and you can plant seeds You can buy strawberries and plant seeds Now here's the interesting part about Farmville, right? It's only on Facebook people buy 800,000 tractors tractors, you know on Farmville with real money All right, they make 200 million dollars last year So this kind of ideas really quite simple Farmville is free You play it a lot. You want to have a better tractor or a machine gun, you know to kill your neighbor farmers So you buy it This is a very interesting business model. We're going to see for example Can you imagine in music? You're buying a virtual item, right? You're buying for example a greeting by John Mayer on your website That place when people come to your website, right? Those kind of things are going to be sold by a lot of people Here's an interesting German guy. He actually Works for Google and he came up with this idea of Google goggles anybody know Google goggles Okay, if you have an Android phone, you should try it. This will boggle your mind Hi, I'm Shailesh product manager at Google. We're here to introduce Google goggles a visual search application for Android phones Until now the only option for web search has been typing or speaking now you can search by taking a photo Let's try this book Just open Google goggles Fill as much of the screen as possible with the object and take a picture You'll see the exact book match in the search results without typing or saying a word Another good use is on a business card. Let's try mine frame the text you're interested in well Google goggles will recognize the text and return a result Now I can click to call Shailesh or add them to my contacts Let's go out and check what else Google goggles can do. We can figure out the title and artist of this painting This is scary stuff, right? I mean basically this is going to be in every single mobile phone around the world I can hold up. I mean it's currently blocked with people I had Google is blocking people from recognizing people But I can hold up to anything identify stuff, right? Imagine what this will do for marketing And what you can do there to place your ad words into this, right? I mean this kind of potential is limitless. So basically what's happening around the world I think we're moving from this idea any telecom companies here. I'm sure the oil people are here, right? This is the old telecom model, right the walled garden It's a beautiful place as long as you're inside It's basically as long as you are part of the environment telecoms Apple Nintendo and so on it's beautiful This is all this is not going to work any longer at the walled garden no matter how nice the flowers Will not work. This is the new walled garden It's something that only works if you collaborate This is a game in Africa called the Anansi It's something that you play together I've got it from a woman who actually went there and photographed this so this shows that basically what business looks like in The future is the collaborative effort to build something together All right, only that is the direction forward time Warner This is old This idea of having a media company, of course, they will continue I hope I don't I don't know but they will continue but the future is this right the future is The Twitter news network TNM not CNN I got this from Brian Solis really a smart guy So what's happening now rather than having huge buildings to make news? We get the news from people It's the Twitter news network It's decentralized They make the news This idea of brands Media companies, you know, we are the big broadcaster, right? We're the network May continue to some degree, but it's very expensive to do The idea of marketing for example by a watering can, you know getting everyone to see you Very expensive and that idea shrink in the future idea is this Connect people to each other and they carry your message if they like you You have to get them to like you. That's the message All right, you have to get your users to like you to tell others That's how all successful campaigns are based on the idea of a networked business And you may say well in Brazil, that's all great people are not on the Internet yet And that's probably true. I think the total penetration in Brazil. It's something around 5% on broadband So that's about 30% I think in total. So the number isn't huge right, but when will this change? You have to be the judge of that. I think it's going to change very quickly I'll show you why in a moment why networked business is going to win One thing is that networked people innovate faster I mean the reason I'm here is a very example of this All right, we got networked. We started thinking we started doing something When you see in companies that people are networked right every single person that is networked with others They produce results faster quicker more reliable in the source from everyone What you used to have is the idea of not not started here like companies would say that's a great idea But we didn't have it That's replaced by proudly found elsewhere PFE Most of my work is proudly found elsewhere. I collect I Collate I don't make it up. I find it elsewhere and vice versa So that's how innovation work now in communications. We're moving to what I call Communication 2.0 not very unique, but maybe have a better name is a decentralized way of communicating Look at the wheel All right, we communicate now in multiple layers We don't communicate because something is coming from the top. We just go out and buy it We research 98% of people who buy cars. They do a lot of research and they ask their friends The most popular world of mouth is word of mouth with people followed by a word of mouth on social networks By people like me is mobile, of course, that's clear. It's cross-media Is telling stories across the platform and I have another slide of that later. It's interactive and it's real time So if you're thinking about a campaign or a marketing idea, it should fulfill those notions, right? decentralized viral mobile interactive real time So I won't talk briefly about social media because that's the topic right after all Supposed to be the topic Okay, this of course is a not a good idea. It's not a good expression, right? Social media is sort of like You know, you could you could argue that if you have a fax machine, then you're in the fax machine business You know, it's not about this. It's a much it's sort of a myth misnomer I think it's much better to use the name networked media real-time media user driven media engaged media and that's true for business too so Everybody on Twitter. Have you noticed is a social media expert that you can hire? Calculations have shown that next year every single person on Twitter will be an expert that you can hire for social media So that's not confused things. I when we think about social media goes a lot deeper than saying when you're on a tweet or Facebook Right, let's turn this upside down the future of communications are these keywords first keyword is You communicate you buy your transact when you are out and about That that is what's happening everywhere, especially with kids, right when you are out and about that's the keyword within your tribe If you want to read a great book you should read Seth Gordon called a book called tribes things called tribes Basically the idea is we all have about a hundred fifty people that are around us as a tribe What they say is the most crucial to us apart from meeting people in person. That's the tribe And then some of us have a larger tribe, right? But that's basically what happens everything that happens within the tribe is the most most meaningful So that is the way our communication happens and it's strangers and people like me What attracts us to people to read people's blogs or Twitter or Facebook is they this sort of look like what I look like And they have the same interest So the last year I've connected with the hundred fifty really brilliant people from all over the world and I blatantly Take their stuff for me and I sell it to you not just kidding, but they do the same This is basically what's happening is we're starting to feel better about Strangers that are like me than about the CEO of Nokia And we have more trust in strangers on the internet than we trust the CEO of a phone company So what is the solution if you're marketing you have to use this to your advantage? You have to get influence in this network at the right time with complete transparency under the control of the user and Because they trust you or don't trust you The last part is the most important part right trust is the currency Trust is the only thing that you can't lie about And on the internet it's completely obvious if you've lied everybody will talk about it HSBC the bank In England they announced three two years ago a deal for all students to start free credit cards free checking free everything for the entire duration of the studies in England three months after a hundred thousand people signed up Hspc said well, we're you know, we need to make some money here So we're changing this and it's a hundred pounds now for the same deal. They just changed it so in 16 hours over a hundred thousand people on Facebook build a group Against HSBC and they ended up on television and all the top-line news and HSBC stock went like this Because they lied basically So a day later they announced that we're going to extend the free offer for five years to every person I had already signed up That's what happens. I'll trust on the internet so this is Google social search right they just switched on this buzz thing that you may know about Which got a lot of controversy right but what's happening in search all of a sudden it's more important This is my people my connections on Google Takes a long time to scroll but It's a lot more important to find out what people around you are searching or offering than the strangers Right, so social search is a big thing in the future This is a Twitter feed for example that mentions what I do so when people search they look at this now They don't look at Google they look at the Twitter feed about what people are saying in real time So this is what people are not doing for brands Right if they want to buy a car or they go to search our Twitter calm And they look at the car and the feedback that people are doing right here and there right social search from people on your network There's a great Institute on Holland Convent and they have a slide saying we're moving from the mechanical age of speed into the digital age of real-time Marshall McLuhan the founder the future is founder the guru himself He says that media and communication is an extension of man Is an extension of what I do is the medium right so what we have now with companies like four square Google latitude and Twitter They're becoming extensions of us They're becoming an extension a real-life extension. That's why they're so powerful, but let me warn you right it all sounds great, but The Internet is not a rose garden What's happening on the Internet is that we are gaining the power as the user But we have not learned the responsibility We have not learned how to keep things in the right way I'm we're completely blown away by the power that we have we're in a power trip as the user We need to figure out ways that we can balance us and find a way to actually administer it It's very important of course in education and with kids So Marshall McLuhan again giving us a brief quote the global village is a world in which you don't necessarily have harmony you have extreme concern with everybody else's business and Much involvement in everybody else's life. It's a sort of an land is a column writ large and it Doesn't necessarily mean harmony and peace and quiet But it does mean huge involvement in everybody else's affairs and so the global village is as big as a planet and as small as the village post office Very interesting 50 years ago 50 years ago. All right when we're connected. It does not mean harmony Because it means chaos and we're connecting to each other creating a huge amount of noise But think about what happens when you go to a show an opera or a classical orchestra, right? When you when you come in people are tuning up. It is a hell of a noise Everybody's tuning up trying to get the instrument ready. It sounds just like noise But when the conductor shows up, right, it's a beautiful piece of music what we have on the internet right now is a lot of noise Part of the job is to conduct into a song This is what the brands are looking for with agencies now They're looking for you to filter the noise right to curate Come up with ideas and filter it down to something that you can actually use All right to find out how this works And as Marsha McLooney again said it's the framework that changes not the picture Again going back to social media if you think that you can have a Twitter account and that is social media And you've looked at the picture, but not the framework The framework is connected consumers are different You have to use them and power them in a way that we can still and this is the key question, right? Do we still need appetizing when we're all connected? If we actually only have appetizing because there was no internet It's a legitimate question. I think it's a question of saying well if my friends and my tribe is telling me about the good stuff Why do I need appetizing? What we're going to see in the future is advertising becoming content Advertising becoming its own meaning. This is my a summary of a mail I got from slide share saying what I do and in terms of sharing my slideshow so some some numbers there, but Basically slide share many of you know slide share. I'm sure and it's G Leonhardt and slide share Last year. I got 15 speaking gigs from slide share All right, because I share my content rather than advertising for it, right the content itself is the marketing The brand is the content right you as a brand are a publisher Every brand has become a publisher Publishing the message about what you do Using services like this. I don't want to skip this video because I don't want to be here forever. So You may be saying okay. This is all great, but in Brazil, you know where we're not connected enough for this I people are not actually using the mobile internet. Of course. It's expensive, right? So this is what's happening now with the company called o3b The other three billion There's a company where no surprise Google has invested over five hundred million dollars in this company I Google invest everywhere not only unfortunately, but in any case this company is putting up 18 satellites around the world to provide internet access to Brazil in the China Indonesia Africa for free or almost free Google is starting to compete with the telecoms for internet access because the telecoms are so slow to make it happen That's what Google is saying Because now that everything is real time and networks are really busy right everybody's streaming and downloading and you know It's it's a huge train on network, right? So Google is saying we want people to connect at one gigabit per second That's a motion picture at less than two seconds download like Korea They're putting out the satellites the first one is going online September 10th 2010 for you right here in Brazil That's I do right there. So if you're looking at this Wikipedia says O3b will completely change the economics of the telecoms business So if in a telecoms business you have reason to invent quickly and to move forward and to reduce the prices Right because competition is coming especially in countries like Brazil and so on and even in the US Google is rolling out high-speed internet at one gigabit per second in certain cities on their own So talk about interruption is a great book called. What would Google do? So if you're in the marketing business, you should is by name by guy Jeff Jarvis who wrote it You should read this Google isn't going to wait for the telecoms to create the rising tide And neither should you If you wait for somebody else to make the rising tide you risk it jumping on in the last minute It's basically Social search. This is my social search example is the tablet is the Nexus phone And it's Google buzz You can tag your location You can just use the suggested tag if it's correct or refine your location Now your buzz is showing up at this location now Now many of you may say I keep him this of course all the time. This is really geeky stuff You know, it's for technology freaks or gadget freaks, right? Well very soon in the next couple of years. We're going to see my grandmother Buy stuff on her mobile phone because it'll be as easy as a remote control for television Devices will be so cheap and subsidized And plucked with all kinds of values that have become irresistible just like television And they will completely emerge with television. So this is basically the direction that we're heading in Some stats on Brazil. You probably already know this but What pen penetration has increased five point eight percent last year The growth was thirty six point five percent last year And there's an increase in what pen penetration also on the mobile, right? So basically Brazil is approaching what I call broadband culture The title of my next book free book So broadband culture, right a lot of people in Europe Are saying what that's really like broadband on culture, right? Because it's like just noise garbage Right mean people are arguing Twitter is just blah blah meaningless Babel. I Would argue that it's just as meaningless as television was And is Right if you've tuned into the wrong channel Broadband culture is what's going to change a lot of these things that we're looking in this direction Well, then culture here in Brazil number two worldwide on Twitter is Brazil You probably already knew this Because I guess you like to talk or maybe SMS are expensive, you know, maybe both So Twitter and Facebook and social services are bound to take away a lot of the SMS revenues From the operators around the world if you have a flat rate data plan, why do you SMS? All right, if you don't want to send it just to your friends, you can just send a message on Twitter, right? It's free That is going to change the equation all telecoms will move into social media in the future This kind of idea what's happening on the web, right? It's swelling, right? We have seen nothing yet 65 million images per day on Flickr. It will be six billion when we all have these boxes Flickr will explode So this is the business in the future is to take the noise and to curate it This is the future of journalism. It's the future of radio television the future of brands, right? The our role is not to make more noise. I mean, of course our role is also to make noise, but The other part is to make sense of it to read it The sense of the New York Times is not to have fantastic writers write about everything and pay them a quarter million to write That's one of the ideas of the New York Times The other one is to take the noise and filter it Because filtering is a very very difficult job Because you have to understand the subject matter That's what advertising agencies planning agencies marketers do for bands They filter the noise and they turn into an output and an input That's a big business right back to this question that I was asking earlier This is probably the answer you know in marketing We're essentially now in this business, right? We're essentially in the business of curating attention That's the job People have limited time limited money, of course, but first of all they have limited attention So the job is to get the attention and focus it right that is the job of Marketing and distribution or advertising in the future, right? We're essentially all in the audience business We're all musicians or actors We were essentially in the business of connecting the audience with a brand or a product or something We're in the audience business And on the internet that mission is extremely interesting and very powerful So this idea of doing business, you know the domination scheme I'd you lose I win That worked for a long time and it was great right if you were on top Now John Hegel is saying the job of leadership is not to make more money and not just to make more money It is to make meaning And your job isn't to just say maximize the profits But to make meaning in the ecosystem of your company to create value for everyone That's a quite a different story That means your company has to change and leaders become connectors If you want to be a leader, you're not just a director. That's Steve Jobs right He is a fantastic leader a brilliant guy. He's not a connector Well, maybe he is in some ways, but he's not a good example for a connector If you want to be a director you make a movie But even movies are now made by people who are connectors in teams virtual movies Online collaboration if you're in the advertising marketing business or branding. This is your job is to connect your brand Not to direct the consumer But they just make the connection So in broadband culture, that's sort of which way we're heading with this right? We're heading into what was hyper competition now. It's hyper collaboration And you may be thinking that you must be mad To propose that we can make more money if we don't compete but we collaborate But I tell you look at all these successful examples in the last five years Airlines that are successful right Amazon Skype all these successful examples. They know how to collaborate to create business together And I think that could very well be the paradigm of Brazil When you look at the copyright reform the idea of how you make money together That is the key to the future is to make money together The key to the past was to make as much money as I can if you guys die over here. It's okay Because I'm still having my shareholder profit So the idea of the future is hyper collaboration, right? And for a lot of people I'm amazed at this right a lot of people are saying to me you're talking about communism here, right? This isn't communism. This is capitalism as much as you can. I mean this is Darwinism, right? Because the future is not the survival of the fittest, but the survival of the ones that collaborate to be fit together And that is extremely difficult. So it's not like you're going to get something for free This is actually harder Much easier to compete and to blow people away than to collaborate to create something together So we're seeing this around the world and different parents. Here's a great example Company called O'Reilly box O'Reilly's based in California And what they did is I said, okay, we're writing all these geek books, you know HTML code and you know stuff I don't read So they said what are we gonna do about the internet people are copying our books and publishing, you know How to make web pages and so on right so what they said is that's get together with our biggest competitor in geek books programming books, right and Form a service called Safari books Safari books offers 15,000 books on the internet on the mobile on the reading devices pretty much anywhere for $42 a month you can use all the books download print PDF share cut and paste whatever you want This is the most successful model that they have ever launched right is a collaborative model on a flat rate basis Think about your business and telephony On mobile phones flat rates are of course, right that that is the key All right, so next tell has a flat rate, right? That's why you talk for free basically you think it's free But it's just a flat rate, right? I call it feels like free if You can find a way to make your service feel like free So you don't get punished for using it That's the bundle that we have folks up in the far above people who are work We're working for companies programming things. They're all Safari book subscribers to them. It's free They don't think of the 42 dollars as a payment. That's already the history. It's already gone. It just keeps going It's like cable TV Do you remember cable TV when you first started everybody said this is crazy? Nobody will pay for cable TV when it's free over the air and a little bit better picture, but Cable TV in a very short time became an America for example You start with $10 the average American is paying $82 a month for cable TV voluntarily That is the model for media in the future Start with something that feels like free and upsell to the $80 is not rocket science But we have to get off this idea of saying we're going to control what people do Because it doesn't work. So broadband culture is Going to be a hell of a lot of work for us Because it's disrupting right. It's a radical disruption of production copyright ownership authority and control Disruption doesn't mean it's going to go away. Obviously. This is not a black or white issue Right, but we have to get used for example if you know doctor's room today You know, you've got fungus or whatever you've got, right? You can go on the mobile internet half of the people at doctor's office in Switzerland are googling their disease while they're waiting for the doctor right And they go to Wikipedia or wiki whatever it's called on the iPhone, right? They go to the doctor and say, you know, I've found this medication in China last week somebody published I can you get it and the doctor says what never heard of it right So your authority is challenged Your authority as the person that knows everything controls everything is challenged So what yet what do you have to do if you're in the position of authority, right? You have to bring this in Because if you don't bring this in you lose the trust right next time I come back to the doctor And I asked her again about the medicine and he does still doesn't know I'm not going back And that's what's happening across the board right? We have to get used to this broadband culture shift the shift of authority, right? We don't want to end up like the music business. I'm saying please don't kill me, but we're already fried So the Wii is a great example anybody here play the Wii I love the Wii right because what the Wii has proven is a very simple thing foresight The people who invented the Wii said people are going to get off the couch Move around the room. What a crazy idea for a game, right? You're on the couch eating chips watching the screen Everybody said this is a crazy idea. Nobody will buy this Because games are not about moving right they're the opposite of moving The Wii has been the most successful game for the last five years It's just sort of winding down and part of the thing that happens you have unintended circumstances of behavior changes That's this When people change behaviors you have damage How can we expect people to use the power of the internet and not create damage? Uh damage is privacy violation Is Identity theft is crime cyber crime. That's all the unintended consequences of the power The answer is not to say well, we'll never invent this again or we we make it illegal The answer is to tell people how they can put the strap of the Wii and not have it go in there right I mean Why would you make the Wii illegal right if you can just put it onto your wrist? All right, that is what media companies want to do They don't want us to play the Wii which is the power that we have right? We need to go to an approach that says okay, let's prevent the holds And find a sensible way of orchestrating this and I hope you get to do this in brazil What we're seeing across the way up, and I think you're feeling this very much how much more time do we have? No more time, okay Okay, I'll wrap this up quickly just as a quick As a quick way out here Texas Instruments is the most successful device that they have right They have decided that that Texas Instruments now they're moving from selling stuff To selling services. They have an iphone app Right texas instruments put this device into an iphone app that you can buy Virtually right so they're no longer in the stuff business They're still in the stuff business, but it's pretty much happening everywhere from a packaged goods And stuff idea to a service and experience That's happening everywhere with cars with devices With all kinds of things like mini cooper now has a right center where you can share rights in germany They sell the right center, but they make cars And of course nokia now has a music service What does it have to do with the mobile? Well, they want to sell experiences, right? Codec is selling stuff and this salesforce.com the most successful company in the cloud, right? They don't sell any stuff. It's a service, right? It's an access x and experience zappos BMW and many others so that's quite clear that we're heading in this direction We're going to take questions very soon. I'm going to actually go to the vet lab stage here Okay, just we'll click About experience right if you're in the branding marketing advertising business, you know, the most important thing is to sell experience Is to make people feel special about what you're telling them That is the most expensive part Will people listen to music on the internet and not go to the monitor a jazz festival or not go to glaston brory? No, they want to go more than ever Right people have cyber sex doesn't mean that one of girlfriend Right There is the experience factor, right? This is what you want. You want experience nike plus the running shoe The biggest invention in the shoe market had nothing to do with shoes Connect the running to the internet You want to reinvent your brand think of how you can add experience Some experience factor that may have nothing to do with what you have in terms of the actual product right jeep has a Huge facebook following people sharing their experiences and of course again apple, right so In the experience world Where we all are hungry for real experiences the way that we tell stories is changing And this is the most crucial mission. I think if you are looking at this, right You have to tell stories jet blue allows people to tell their stories, right? And you have to listen to people actually the media stories unfolding like this, right? All of a sudden storytelling has changed. There's links. There's feeds. There's interaction Other people are telling the stories right the fort side and this is an age old book from the 90s, right? Where I think don't tap tab skull wrote the book right markets are conversations Well, this is like stone age internet, right? It's finally becoming true, right so The idea of telling stories connecting a tribe Leading a movement making change that that's where the story ends up So what happens with a lot of brands is now we're moving into this environment, right? A trans media cross-media storytelling Where we have a story and we tell it and videos we tell it on the mobile We tell it on television any which way in the gaming platform any which way All right on all these platforms that people are actually using Other people are saying well you talk a lot about stuff. Let's talk about action That's the action when you're thinking about a business don't think like this Don't think about a walled garden Don't think about controlling something that you are inside and your customers are inside and that makes a happy couple That is possible, but it's highly unlikely All right, so do think like this Think of an open environment a scenario where you can allow people to contribute, right? Determine what you want to broadcast. What's your message? All right, if you're a global or a bobs or oy, what's your message? All right, what attracts people to your brand? Old appetizing is make-believe All right coca-cola as a baby makes you a better baby All right 50 years ago now the new appetizing is understanding All right, give an example of understanding Hyundai the car company Two years ago offered a deal where you could give back the car if you got unemployed In america their their sales increased by 14 percent. This is the trailer A decade ago hunday pioneered america's best warranty to show you the faith we have in our cars Today we're introducing hunday assurance to show you the faith we have in you Right now by any new hunday and if in the next year you lose your income, we'll let you return it A simple promise right how many people actually returned the car very few All right, think of this as a way of saying well, how do you build trust with your audience? Right, how do you move forward in this now? I will actually wrap up now I promised I would So to wrap this up as I was saying earlier. This is the recipe for success Open platforms open business open transparency open for conversation Yes, you can succeed being closed, but don't try it All right open is the way forward and I think as uh, Tim Riley already is from a from a rally publishing says Create more value than you capture That's the paradox of business and communications for the future when you create more value You are more value right that is the direction that I'm going with this So anyway, thanks for your attention. We'll go and take some questions now, I guess right And you can download the pdf of media features. Thank you You could say China has is basically stuck in the old world of capitalism That they're trying to Exploit, I think basically what's happening in China is and this is why I really like google's decision to possibly leave China Um, I think this is the last period that we're thinking that people can control and prosper You know, I think the Chinese government will realize very soon just like Iran For example, you can't control and prosper You can only keep the lid on until the connectivity is much higher Right. So what's happening in Iran right now is for example 30 percent of people are under the age of 20. They're all on facebook. They're mobilizing right There's no way you can put the lid on this like you did 10 years ago The same thing is going to happen in china And I think google's decision to pull out of china is a great proof that we can maybe still trust them All right, because they are opposing this kind of idea. I think Basically the it's quite clear for all governments if they want to prosper and to grow They have to allow people to connect and talk All right, and that's pretty much china or not. That's the future I'm just a little bit curious on how you see the whole aspect of you know multitasking and fragmented media consumption Because when you were mentioning the future of communications keywords Nothing really referred to that and I think we are moving towards A path where you're not going to do just one thing you're not going to be you know just using Twitter or you'll be doing several things at the same time Well, you know, I have to say I'm rather pessimistic or multitasking I'm too old for that. I think what's happening is because the Possibility of doing all these things are constantly exploding We have to learn how to juggle And have you ever tried to juggle, you know, if you've tried to juggle anybody can do one ball, right? Hopefully All right, you can do two balls Okay, that's not so hard. You can do three you can learn how to do three balls Not very not doesn't take much longer than half an hour. Maybe But four or five six balls right very hard. So it all depends how much you can juggle And I think what we're seeing right now is that basically it's a question of age is a question of Minescape, right, but the juggling is difficult So as I was saying earlier the responsibility that comes with the tools we haven't learned yet All right, the internet is like nuclear power All right, we can make a bomb or we can Heat the house So right now we haven't really figured out how to keep one from the other now on the internet We're just toying around right so we're still in the noise making stage The next few years I think especially when we're really used to it We'll get used to filter the noise and find the real stuff. We're still very much at the beginning But depending how young you are now like in 10 years all those kids that are there They're growing up doing 10 things at the same time. So it'd be perfectly natural for them Yeah, I think it will actually both, you know, I think the most successful stories are Stories that take all of your attention At the immersive experiences They're not experiences where you can also watch television write an email and send an sms, you know I mean, if you want to be successful in media, I think you have to have a really immersive attractive story That just takes you over And that could be a two minute story or a two second story But that that's what I'm looking for. I'm looking for an immersive story. I'm not looking for being part of the noise You know, I'm looking to get through the noise First of all, congratulations. Excellent presentation. Thank you My interest is mainly on how we made charge for content in the future You've done a good job of showing how traditional models have to change will change I saw in your presentation at picnic last year, which I Saw just the video You suggested then some kind of system of metering or monitoring content You made an analogy to sort of a water meter That would meter what people do on the internet and would would charge them a little drips that it would feel like I thought that was a very very silly suggestion But honestly because it goes against the whole the whole ethos of the internet, which is I mean, I mean, it was almost like a big brother concept And it reminded me of George Bush's patriot act when he was going to start monitoring the books that people take out of libraries And I noticed you you don't have that metering suggestion in this presentation Have you backed away from it? I think that was a misunderstanding, you know That's the first I was ever put together with George Bush in one sentence, but Basically the most successful models around the world are based on flat rate access, right your water It's not flat rated, but everybody has access very easily, right? You don't have to beg to get the water to work You have to pay but it's sort of flat rate. It's easy to get right electricity When you plug in here, you don't ask for a credit card. You just use the power here somebody else pays, right? Mobile phones cable tv radio, right? They're essentially models where we all use and we all make a payment, but it's not granular It's not happening at the same time So for music, for example The only model that makes sense for music is to be bundled into access flat rated This is exactly like radio 100 years ago when radio was invented all of the artists composers and publishers Said we hate radio It's free music Right free music is terrible for us because if people have free music that won't buy the sheet music They're won't buy the piano roll. They won't go to the concert Right. They tried to kill radio Radio became so popular that it could not be denied Most governments around the world said you have to give permission to radio And radio has to pay So basically what we have now is radio became the biggest driver of music ever So what we're seeing on the internet is the same thing It makes a lot of things free and we may not like it But there is money on the other end of that free Right. What we have to do is figure out how we can make it legal and turn into money And I think with the answer to your question finally The metering part comes in here really quite simple If music is included in my mobile subscription And I mean included not charged included Or my DSL subscription by wireless Then essentially all that needs to happen is to somehow get an idea of how many songs or which songs I listen to Which can be very easily done so that the creators can get paid proportionately For example, what happens now when you're on youtube YouTube knows which videos you've played We may not like the idea very much but that data can be used to pay the owners that created the video and the music But right now there's no license in place So what I was trying to say at picnic last year is really quite simple is the flat rate access is the way forward to monetize it It's not about controlling what people listen to Or monitoring it in the sense of data, right, but just distributing it So the there's all kinds of ways it would lead to too many details to get into all that stuff now But basically the flat rate scenario for music is the only solution and probably also for books But primarily for music And you're going to see it already it's accomplished like china google has a flat rate for music And then mark and canada you probably see it here fairly soon That means that anybody with internet access has access to music Is that is there any real way to charge for that kind of content that isn't metering? I mean your your your metering proposal is technically perfect But it seems to go against the whole idea of of free Oh, not not so much. I got your question. I was I'm going to answer it right away So basically what it's really quite simple when your content creator, there's three ways to get paid One way is I pay so I create and I pay Like a blogger right bloggers create and they pay right because they have to have the website, right? So I pay or you pay And the third model is they pay Somebody else pays. That's the three ways I pay you pay they pay So any model in the future has to be a combination of these models In other words, if I'm a journalist I have to figure out a way that maybe some of they pay some of The user pays right in other words. It's a combination of different streams The new york times already doing a very good job at this So you have a dozen different revenue streams. You have subscriptions You have appetizing which is a powerful model Always will be right. You have direct payments. You have voluntary payments patronage, right? You have systems like it's called flatter. You guys may know about flatter It's a way of giving credits to authors right by using a system of micro payments And you have ways of saying it's completely free, but you can make a payment somewhere else For example, what I'm doing for my iphone app I've uh, I think several thousand people have downloaded it already. I will not charge for the app I will allow you to go to a link and say you can buy my pdf even though my pdf is also free But there's a payment link, right? You can make a payment in the process of looking what I do Last year I made over five thousand dollars selling free books By people who can just get my books and give me money anyway Right the radial head model in a way you could argue However, I have to warn of course. There is not a uniform path to monetizing Everybody is in a different position All right, if murloc wants the wall street journal take money, maybe he can get it. I'd be happy for him I doubt that's a model across the board I think what is going to win in the future is a model that works for each In each place with each user group with each kind of content And there in lies the difficulty, right? So I think the answer is we'll have a mixed model some free some paid Some paid with micro payments some bundled I see telecoms moving into the market and saying we're going to facilitate the payment for the content by selling ads against it For example, I know music best. I'm going to use the music example again But in europe it's quite clear that if people paid one euro a week For music you could make music free One euro a week, right? And now it's quite clear that if I'm willing to pay a euro a week I don't have to because somebody else will pay it for me to reach me Right appetizers will gladly pay the euro to reach me So in fact, it's free music is free for me I somebody else pays for the for the profit, right? So basically looking at euro for example 800 million people paying a euro a week for music Makes the music industry twice as big in one and one blow And I don't even pay so it's possible to solve this problem, right? But what needs to happen? I think this is crucial for the creators is to give permission For those new models Is to look at how we can actually make it happen rather than saying but I really want 10 dollars Which is reasonable, right? Of course In the journalism, I think we have a great position in journalism Because journalism is not all about me writing it's also about curating All right, it's about looking at other stuff and formulating it New York Times isn't just a great paper because of the writers because they formulate right they curate the package The same is true for broadcasters So I think those models will be unfolding. In fact, I'll be speaking at a conference in april For the new york times about this topic Okay, so another question. What do you think will be The tablets the the devices that we will use more Well, I mean Yeah, I mean, I think all of us like to look for one track answers, you know There's no such thing here. I I think basically You have all kinds of different kinds of users different cultures different behaviors They will all use different ways to get the media So you will see basically cross-platform media So when you're traveling you use your mobile phone to watch the news When you're at home in your bed you use the tablet when you're living room We use the the playstation whatever it is that the platform will change But this is where cloud computing comes in right all of our media will be in the cloud All of our contacts our media our playlist They will not sit on my wristwatch or my mobile phone All the information will be up there and I can get to it wherever Device I am on it will be automatically formatted for the device All right, so what we're seeing with cloud computing is that becomes the key To how we can monetize the content right so I think ultimately doesn't matter what device you're on you'll always have the right mix of your content for that device Because it comes from the cloud Thank you Thank you