 Welcome listeners! You have tuned in to Tribe Radio. I am your host, Marie Germain. Today, I have a special treat in my longest interview yet. Find time to sit back and soak in the wisdom, the clarity of my guest, world-renowned futurist, Gerd Leonhardt. In this hour, he speaks of the very serious challenges businesses and brands face. He offers solutions. On a more somber note, he exposes the ploys of controllers on Internet freedom. Sopa, to be clear. The Wall Street Journal acknowledges Gerd as one of the leading media futurists in the world. Powerful, incisive. Gerd is simply delicious to the ears. Keynote speaker, founder of the Futures Agency, advisor to top corporations and governments, author of five books, The Future of Music, Music 2.0, The End of Control, Friction is Fiction, and The Future of Content. You've guessed it, Gerd's background is in music. But today, he is a top game-changer, inspiring entrepreneurship and guiding us into a prodigious, digital world. Let's meet Gerd now. Good morning, Gerd. It's such a pleasure to have you here this morning at Tribe Radio. Now, you win Switzerland. I'm at home in Basel, Switzerland. I work for my home office, and it's winter here. It's not really snowy, but it's quite cold. To help introduce you to everybody, I wanted to use a little metaphor. Many years ago, I was in Manhattan, and I went to buy a box of cigars for a friend, and I went to the Dunhill Humidor. I believe it's on Avenue of the Americas. I was met in a dim room with a 25-foot ceiling by a gentleman that reminded me of Charles Dickens, and I was sat down before a glass table and a lot of cigars pinned like butterflies under glass, and I proceeded to ask him very pointedly that I wanted a Monte Cristo No. 2, and he climbed up on a ladder with slid down a wall in this enormous room with a thousand drawers and knew exactly where this particular cigar was at the top, near the ceiling. And I think of you as this ubiquitous, Renaissance social media maven transforming everybody in the book business, the music business, the movie business, at least attempting to guide them from rights management into the future, the connectedness, and you know for all of these different industries and their paradigms, which drawer to go and pull out, I see you on the ladder going to the specific drawer or many drawers to help them transition into the future. So I don't know why I thought of that metaphor this morning, but you are the master humidor, man. I liked it, you know, but the thing is I know where the cigars are, but I can't make them smoke them. They take them out, they look at them and they feel intrigued, but they don't dare smoking them. What a great response. So, Gerd, one of my driving reasons to interview you today was to help the big brands and the small brands, the new brands, the emerging brands, all of them, because I can tell from my conversations with them and my work with them that they are all very nervous about what's ahead and they're scattered trying to adopt social media. They don't know quite what that is. They're overwhelmed by it and I can understand it because every time I learn a new app I pull my hair out for a few days and they don't really see the return on investment because they tend to stare at the apps rather than the people using them and listening to them. So there's a lot of work to do there and I want to talk to you about how they can transition as these brands that you've helped, the music industry especially, which you have such a history with, like the whole entertainment industry, these brands can be digitized, the books can be digitized, the movies can be digitized, but in Canada, Blue Notes Jeans and Kicking Horse Coffee, as an example of brands, what do they do? How do they begin to make that transition because their issues aren't quite rights management, although some of the larger brands are on top of you in terms of using their logos and stuff. What do you have as a suggestion for them coming into the future in terms of using social media? What parallel can you make between the rights management issues and the physicality of their brand? Of course, first of all, it's not about digitization as much as it is about becoming human, which is kind of an oxymoron, but basically when brands go online and they show themselves to people, they become sort of human brands in the sense that we can tell who they are, who the people are. I mean, everybody knows, for example, what kind of brand Virgin is because of Richard, right? Richard Branson. So basically the brand becomes touchable at that point, which means it has more chances of success. And we see that with the biggest brands that we see now, Google, eBay, Amazon, Apple, and so on, that they become human even though many of them are about technology. And the other thing is that, of course, the name social media sort of implies that it's like a cheap marketing budget, like a building a better mousetrap, you know? And when clients come to me with that view, then I don't really want to talk to them really because really what we're seeing on the web is that the web is becoming a social operating system. So there's transparency, there's honesty, that it's very difficult to lie on the web because everybody knows that they can track check and cross check and get opinions, right? If I say that I've played with the Rolling Stones, you can find out it's not true very quickly, and my plan will be hampered. So basically it's not about social media, it's about what I call the social operating system, you know, the whole context of conversation. And to be frank, you know, many brands that you see every day in your everyday environment, they're not that interested in talking to their users or buyers or even clients. Many of them are interested in just selling, right? I mean, just shut up and buy, like iTunes, you know? And that just wouldn't work. And once we realize that it won't work, then we have to say, okay, if I'm a pharma company, if I'm an insurance or a bank or retailer, I have to figure out how to become human and have conversations and get engaged, and then I sell some. Yes, you make that distinction in your notes, many of your videos and audios, that selling is just not a model anymore. So that's to be, in fact, you say yelling is dead, to quote you. And you also say things such as formally known as consumer. And you also say advertising is becoming content. Yes, I mean, when you think about it, especially like this, I mean, we didn't have love choices before the internet because the television told us what was real and what was not, which is Fox News still trying to do that. But basically, we didn't have all the options of being able to consult different sources or get together online or build Etsy's or Amazon's or eBay's. It was all top down. Now all of a sudden, we still have top down and that will continue, but also we have this many to many system. So my friends tell me that this electric car is a good one to buy and I look at it and all of these things happen online. And they happen in digital, mobile, social environments. And the brands are scared because it removes this utter control mechanism of whoever yells the loudest sells the most. That's what the past was. And now we still have lots of yellow and chaos online, but it's very hard for them to dominate in this environment. So my new book talks about this, how we're moving from the sort of ego environment to big companies, big opinion, big marketing to the eco environment, which is not about ecological, it's about being interconnected and being the sort of many to many. Oh, yes. Well, you just taught me something here. I understand you're using the word eco as another ecosystem. Yeah, I mean, it's basically the idea of the ecosystem is very important for commerce, right? Because basically when you are the ecosystem, say Walt Disney or Universal Music or MTV, when everybody has to move along your guidelines, right? And you dominate in a marketplace. Then you don't have to care what people say because you know what choices do they have, right? It's my way or the highway, right? But in this system that we have today, we're all of a sudden interconnected. And you can see right now what Greenpeace is doing, for example, protesting Volkswagen as a bad ecological brand, whether it's true or not, you know? They have to respond. They can't do anything else, right? And this is a major issue with retailers. They have to all of a sudden pay attention to what everybody else is doing as well, right? They're no longer just, you know, sort of Roman empires. And frankly, if that bodes well for the formerly known as consumer citizen, if that bodes well for them, then it has to bode well for the marketer, the brand owner. So that's a good thing. Well, I mean, you could argue, of course, in that context that in a way because of what we have now in a truly digital society, we don't need marketing in that definition that we used to have in the age of TV, right? Because their marketing meant you show up so many times in my life that I can't help but not look at your stuff, right? Through TV ads and outdoor advertising. But now, because we're now in a networked society, people mention you to me, it's a whole different process which I can't always control the same way. That's like, you know, Twitter news network versus CNN. So TNN versus CNN, you know? Well, indeed, that noise as it's also called, that intrusiveness, I think people had it, had wear out, we called that in advertising, they had wear out before, but right now it's opt out. They don't, I mean, they just click out. And, you know, that's the shift, I think, is opting in and following, and you've said that. So maybe you want to say a little thing about that, how if marketing is a withering paradigm, selling is dead for sure, or yelling, selling yelling could be a metaphor. How do they begin to market themselves in the long tail, lest that be cut short by SOPA, which we'll talk about, but, you know, is the new game what Gary Kawasaki calls enchanting them, being exceptional. Because you do talk about the context, all of the context around the brand that allows you to bundle in the music industry and the film industry, and I want you to make a case for that. Maybe we can parallel that for brands. Talk to me about that bundling, that extra added value that helps people in, you know, obsessed with rights management and entertainment. Talk to me about that bundling and that added value that can help them leave the internet free. Yeah, I mean, I think that if we take this analogy and we say, okay, it's basically, imagine the difference between a magnet, a big magnet, and handcuffs. You know, in the old days of commerce, there were essentially handcuffs. You know, if you have cable TV, then you handcuff to that deal. And if it's down, then you don't watch, right? And if you don't pay, you don't watch. On the internet, you know, it's about attracting people to come and do something with you, like Netflix, right? Where I can opt in and out, and I can probably get it for free if I try it, or I can get it outside of the US. But it's a mechanism of attraction, right? And in the media business, it's been like this for a long time that essentially because of the control of distribution, you had to be inside to consume, right? Inside of cable, inside of the DVD, inside of iTunes. If you weren't inside, you couldn't consume, or at least you were illegal, right? So that hasn't helped them because basically I can always be on the outside and still consume, right? Because that's the nature of technology. With physical products, of course, it's quite different. But there is a comparison there in basically saying that it's all about as Guy Kapposaki says, the enchantment, but I call this the sort of the feeling of attraction, the fact that you like this brand and you love the brand, some people would say, that makes you decide, all the added stuff makes you decide why you buy something. It's not the core. When you buy a new car, you don't count the gas mileage as the number one factor some people do, but most people don't. They have a certain feeling about a BMW, right? And that's why they buy a BMW for 95% of the motivation. It's a perception issue, right? I mean, this, of course, in my business, that is my number one driver of my own business is perception that I'm the right guy and then I hope I can fulfill it, right? But, you know... Absolutely. Yeah, absolutely. I've made some arguments about perception. I believe the perception is not everything anymore because of the transparency of the internet and I think a lot of brands were romanticized beyond their actual value, especially as the, like Seth Godin calls it, work their way to the bottom in reducing prices. In fact, Jeffrey Haslett and I kitted about how you can't cut costs anymore. There's no more meat on the bone. There's not even any marrow. They've got down the bone. So I think the value of brands have been romanticized beyond their delivery. Yeah, I mean, there's also too, of course, that the obsession with profit and short-term gains has taken over to a very large degree, not just brands, but also with government and other things to where you were basically saying, you know, whatever works tomorrow, let's go do it, right? Because you don't want to really plan for a long time. But if you're looking at brands that have been built like Harley-Davidson or like South-West Airlines or Virgin or others, right? Where the value has been built and there's a strategy behind being social. It's not just a thick leaf. Yes. You know, if you make thick leaves, you're definitely going to be naked, right? That's my view. And therefore, don't even try. Because, you know, that's happening kind of cold with the Twitter thing and with everyone, you know, these are just thick leaves for bitter, bitter mouth traps, right? And if we do that, then it really doesn't make any sense to even go there. Oh, you're a man of such great metaphors. I know that when I listen to you, I just relish on your metaphors. You're such a great communicator. Thank you. You're welcome. I don't want to appear unctuous, but I'm probably one of your bigger friends, I think. And increasingly, so every moment. So what you're saying is perhaps I use a metaphor that the past is very much an arranged marriage and now we have to swoon them with real virtue. Yeah, what I'm saying is I think it actually gets more complicated so there are arranged marriages that work quite well, for example, in India, right? They're not in principle to be denied or, I mean, in my point of view, this of course is a cultural question, right? They do work sometimes. So what I'm saying is like it can work. I mean, look at Apple completely controlling every single environmental factor of how they sell and it works. Well, you're right. The algorithms can pair a couple together properly, the customer with the brand. You're right. It can work. I'm just saying that the chances of a controlled environment working in today's fast-paced interconnected world are so slim that I wouldn't want to try it because the chances of having a more open environment and a more sustained conversation and growing of the brand are properly much larger, which doesn't mean that it's a rule. It's just sort of a world for you, I guess. One of the big overriding messages that I got from all of your materials really is the debacle, the war that is on. I don't want to say between the past and the future. I don't want to do that. It's too banal, but the difference between the hegemony of the industrialists and the large corporations, the control versus the actual truth about the web, which is access. So it's control versus access and selling to them. I think your task has always been tell me if I'm quoting your task in life properly, that you're trying to persuade them that there is revenue and profit and longevity and sustainability in access and finessing that access, and costly, by the way, versus holding on to the lock in rights controlled past. Am I correct that that seems to be the great challenge for you and for corporations and big brands? Well, of course, that's a challenge for everyone, really. This goes all the way down to individual issues. Clearly, we all like control. You don't want to feel like you're out of control, but we also know that when you obsess with control, it doesn't do you any good. We have experienced both. So there has to be a balance of when you are and when you are not and so on. It's like when you have kids that you learn that, right? How control and trust is a mix. But the music industry is a perfect example which has been hammering on control for the last 15 years on what we're not allowed to do and by result, the only thing that really works is Spotify which they're just about to destroy again because, you know, they can't agree on how much money they should pay for something they don't have, which is customers. I mean, it's a bizarre situation. It's like, in this case, you can say that the free market economy hasn't worked, right? Because it hasn't produced an outcome when there are sort of landlocked situations between labels, artists and fans, right? So there needs to be impetus to change it and my view that is the government's role is to also say, guys, this isn't working. You know, come up with something that works or we do it. Well, let's talk about that. I hope that they are seeking you out and if they're hearing this, they better contact you because you ought to be in this dialogue on January 24th the great D-day for SOPA. I forget the full meaning of the acronym but the Privacy Act sorry, the Piracy Act. Yeah, Stop Online Piracy Act. Right, Stop Online Piracy Act which is the movement against the Piracy Act is occurring and Eric Schmidt and Sergey Brin Jack Dorsey of Twitter Reed Hoffman of LinkedIn Mark Zuckerberg of Facebook all of them are facing this and fighting against SOPA and they certainly should be seeking you because you can't just argue something. You've got to come in with solutions. You can't just go into the debate and say this is going to destroy the internet it's going to destroy the greatest resource the world has known the greatest GDP productivity. There are solutions there are ways to satisfy everybody and I can understand you're having difficulty getting them to the table. This has clear parallels to all the other issues that we're facing including of course the Keystone Pipeline and all issues and all these things if you're looking at what's happening on the internet this bill basically is not at all about piracy it's about who gets to control what happens and it's the people who currently make other money that want to control the new money it's very much like the oil companies run US Congress for the same reason because they want to run the energy of tomorrow as well and this is why they don't get so much money from the oil companies to vote for these laws but in the end there's no common benefit to those rules the benefit goes to the top 1% and that is where the injustice comes in in my view is that the amount of money spent on lobbying for these issues like SOPA or other issues that I just mentioned is so huge that the people who are actually concerned which is 99% don't get to say anything because they don't have the money to pay their way in and this is why I think that the work of the EFF and many others is absolutely crucial in this balancing process because yes you don't want to give everything away for free on the internet but that's not what we're saying I mean basically the US has always been on the forefront of making room for entrepreneurship with the DMCA and other options even though there are issues there as well but this now is going back in a whole different direction where we can essentially say that's exactly the same as lobbying for more oil and more carbon and maybe more nukes even well to quote to Chris Anderson's long tail and one of the wonders of the web that is beloved by everybody who is on the web and I would say I think 90% of the people on the planet are on the web if you include mobile devices they're talking about a blackout already the app owners are talking about a blackout as a protest they're clearly asking for civil disobedience in this case this is essentially a law like we have in China now and this puts the US on course to compete with China as far as censorship is concerned and that is really it's embarrassing and it's utterly ludicrous for a country with that sort of spirit that the US has to even consider these kind of measures so I think in the end this is something that is really going to polarize the sides and maybe that's a good thing if it happens clearly the outcome as France has shown the Hadopi law which is the three strikes that Basi says if you've downloaded three times and were caught then you get disconnected in France that's in place and it's a law didn't do anything for legal business commerce it has given millions of dollars to lawyers and people in government but nothing at all to the creators so clearly it's just a very very bad idea somehow because they have failed to relinquish that control through regulation they're trying to keep the control but it might excuse my expression bite them in the ass right you can draw the parallel here clearly this is yes you can buy a victory you can do these things and you can buy laws to this effect but in the end you will still lose and this of course you can learn and need our four brands you can probably buy your way to the airwaves and you can buy your advertising but you can't buy your way to the heart of the buyer and the consumer we're still not going to do this we're still not going to buy for those prizes we're still not going to subscribe we're going to vote with our wallet and if there's one billion people around the world they are refusing to be part of this and you can't do it and that's the end of the story well said I think that and actually the creators of music and books and entertainment you have corporations like Nike Sony finally dropped its support of the privacy act but you have brands like Nike that are supporting it and many others and you wonder what's their play in the whole thing because they're not digitizing their shoes but in the end they control the mention use of their brands and then the mind goes into what could possibly happen to get people in trouble in terms of Nike and I can see a new development in terms of people using the word Nike in their texting and their SMS messages or even showing a picture of a shoe and getting charged for it so there's a whole new revenue stream for them so I can see now people starting to refer to Coca-Cola perhaps as that brown syrup I can't name and then somebody else responding and say oh yes I know I had a glass of that brown syrup I can't name so there's a a false belief system going on in their minds that through their own brand equity which by the way 90% of the world trust peers about any product artifact or brand and not the brands themselves so I can tell you that the top brands don't have the love don't have the affection and it is effectively them that are driving this piracy act so they'll end up with nothing I think Well in the end I think that it may very well turn out as corey doctor of this class in many of his books you know in the end we may just say look whoever support this and made it a law and gave millions of dollars to vote for this right we're not going to buy from them anymore we're not going to buy from these supporters of this law and if a lot of people do this it will really hurt them I totally agree we'll take our money somewhere else like you know right now I'm already considering how I can cut out all these guys from my life if this law becomes a reality because it's really appalling to see how much they they think of their own sphere rather than the entire system to this idea of ego versus eco right I mean in my view any company that's not willing to build an ecosystem of like-minded mutual relationships you know doesn't deserve to be part of this thing Well I totally agree I'm glad we're talking about this because the future of the brand could be shifted by this ever so temporarily because I have a feeling if they get their way it won't last very long they'll be apologetic following that very shortly let's pretend that the long tail remains and thrives and let's pretend that this isn't happening and talk about the future and talk about how brands can build their ecosystem because again you were talking about opting in and building a context around brands and getting them in conversation how can you sell how can you stop selling and get more context and engagement what are the moves you see them doing let's pretend we're you know blue notes jeans and they have stores but they also manufacture these wonderful jeans which I'm wearing right now by the way they're Canadian brand and they're wonderful and they make American eagle jeans look like nothing I think that the the main thing I said in age with very soon we'll have probably three billion people connected to the internet and then maybe in two or three years four and a half billion from the total basically all the brands become publishers of some sort even if you're a mining company or if you're a bank or an airline you publish things about yourself and there's a certain belief that comes across for example again we think of Virgin as being a sort of a snarky brand you know irreverent and so people who are irreverent like to buy go with Virgin Airlines you know they're sort of a fit there right but in many ways brands become publishers and therefore they need to create something that is really that is publishable for example BMW had a film series five years ago called BMW Films which created a huge boost in the revenues but didn't have any logo in it whatsoever but it just showed what it's like to be in a BMW but it wasn't a commercial so it's this idea of creating context of being reachable in as for example as Pepsi has done with the Pepsi Refresh Project that you may know about exceeding new ideas that Pepsi gave like 30 million dollars to startups to come up with good ideas to make the world a better place those are all sort of contextual things and I think that lots of marketing and advertising money will move into creating context that is a benefit for anyone that's interested for example car companies coming up with light sharing services you know many of the big car companies are getting into car sharing I mean that is not the car business is to share a car but to own a car right but now they get they're saying you know it doesn't matter if people share a car they still buy one right so I mean this is a larger view of the world rather than saying you know we sell DVDs or you know we sell jeans you don't sell jeans you sell a lifestyle of some sort right and Levi's has been very good at this right and so as Heineken for example with beer and the sponsoring of music and as you know this is not new but because of the way that the web is evolving all of a sudden this is moving center stage now that is not an extra thing anymore that I can also do it's becoming a requirement that you publish you have to create context you have to talk to people you have to be conversational and you have to lubricate I call this lubrication you have to lubricate a market by creating something of benefit that transcends the possibility of buying so you know it's not enough to just sit there and say yes yes now you can buy this you get five dollars off you know that's not big news but to say that when you buy this then you can create something else that has benefit beyond this purchase of a good product right like you know we buy a holiday because clearly hey it's easy writer right it's it's the culture that we're buying I don't have one but I can imagine how people would perceive that right and so that is really the job for marketer now enough for a branding person is to say okay how can we create this context that is really attractive and powerful to people and the most successful brands including Google for example in the tech space you know they have succeeded in brands beyond you know some individual product an interesting term that we both used and the two views the lot is flowing the constant stream of upselling of experiences and I don't know of a lot of the legacy brand people understand that that's what the web is it's it's a life it's a stream as a constant stream this is the challenge here really is that a lot of brand managers you know if you're traditional brand manager you're thinking of a transaction you know a unit sale and and and then will ever get the unit sale to come in you say okay I count the units right it's like in the music business all about CD sales and download sales you count the units right but now you don't count the units anymore you count the amount of attention which is what we call flow right the amount of attention that you can meter in various ways and then the outcome translates into units right you know in some sort of way but if you only count the units then it's not enough because the metrics are flawed right and if you're going to be measured by selling units then that's the problem you have to also be able to sell and to make a benefit out of the flow absolutely the analytics are still very important it's funny how we always talk about search engine optimization it's important but those are you know there's a lot of qualitative work still on the web and we need a sorry quantitative work on the web we need more qualitative analysis it's better to analyze a response from a thousand people you know the intended tribe to some experience that particular stream that they experienced that day then to say there are a thousand coming you know it's the qualitative that's missing and the algorithms have their own hegemony Eli Pariser has talked about the filter bubble as probably has your friend futurist Kevin Kelly and in fact Tim Berners-Lee who invented the web is concerned about the filter bubble so there's that issue as well I think a lot of the data that we need to draw from the internet is very quantitatively oriented and not qualitatively oriented so it leaves us to our own devices to say hey you know we struck a note this this upsell of this stream is is going to help us define the brand and create that experience but basically I think you have to you have to have more believe and less and less sort of reliance on stats because I mean look at Steve Jobs wasn't about doing focus groups and then saying okay let's make an iPad right it was all about beliefs and I think if we are if we're going to society to where you can say that it's based on some sort of mechanical formula as to who likes what and who's gonna buy what and if we're gonna live in a world of cloud and peer index and all that stuff you know that is not human that won't work because it's this is just one piece of the equation and if we confuse that and we're taking the numbers as the real thing and then we do everything according to the numbers and we become the machine which means it will just crash right because there's a disconnect between you know most people are humans they have emotions right they want to be creative they want to be touched in some sort of way and if you're using a mathematical formula only it will completely derail in my view is to have effect because this is just one piece of the equation that you also use yeah yeah I know the numbers are faking sentiment aren't they well I think there's a lot of things I use numbers but you know if you're saying we're gonna do this because of the numbers you know then you're missing that important step to say well what kind of chemistry do we have here right what could happen if we did XYZ I mean we don't base our precious behavior on facts we just don't and that is a pretty much a given scientific value is that people are saying you know this is all part of the decision but in the end we make an emotional decision in many ways we make that decision in the first two seconds of appearance so therefore you can argue about all these things but the bottom line is it's all helpful but in the end you have to have emotional impact as a brilliant as an artist as a writer of some sort and this is why decisions get made mm-hmm in the end you know it's always about trust I found that in my entire career as a branding marketing communications consultant previous advertising agency owner it's always been about trust if you can get the customer the recipient to trust and right now what's happened is that the legacy brands used to think they had as trust is now genuine authentic trust between people and how to get you and your friends to be talking about something into positive light is probably the most powerful source of trust that you can generate on the web and stopping the yelling stopping the selling stopping the perception stopping creating ideas and foisting them on people but going out inserting yourself into a conversation humbly and listening and watching and learning how these people feel live what is their lexicon I think is going to inform the qualitative that will drive the quantitative if you see I think one of the curses here really that we're thinking if we can trust then we also probably can't be trusted and this is a typical example of course from the media business that there was no trust whatsoever that consumers would do the right thing and create value monetary value for the creators is completely bogus right I mean 98 99% of all consumers are fans right they will do the right thing but you have to trust them in a way to do it in their own way right so you don't give trust you don't get trust and this is one a typical example of course of many brands who are looking to protect and secure and to nail down what they have with patterns and what have rather than going the other way and saying you know we put this out because we trust it will come back like many other brands have done and of course without being idealistic this is really a question of the world view right I mean if you are pre-internet world view then you could control it all right it was possible but now essentially because you know the internet is putting a a giant detonator on this issue of control whether it's control of media or digital content or brands or logos or you know it doesn't even work in China even though they spend billions of doing so right that is just a question of what you believe and I think that when we come down to the bottom line and said in the network society we have no choice but to be interdependent you know otherwise you know we get ostracized we become like a satellite that flies off into space oh I totally agree that's a very good point trust isn't just something that happens between peers you're right the corporations need to trust the consumer I think there's an inherent lack of due respect to them that's a very good point two-way street trust isn't it yeah I mean again because we're now in this big switch to saying this concerns all involved parties and this goes for media it goes for bands it goes for environment right rather than saying okay these guys should pay these guys or you know have sort of mechanical setups you know now it's all interconnected so if we want to make this work if we want Spotify which is the my view the leading streaming music service if we want that to work on a global scale then we have to allow them to do it under conditions where they can survive you know otherwise we'll never get to see what it could have been this is like having said in the 1920s that radio is illegal you know and our radio is the biggest has been in the past the biggest provider of commercial impetus for the music industry has been radio right how would we have known if we hadn't allowed it yeah yeah well whether they want to or not engage the customers in in the creative process they're going to shape the brand anyways so they might as well because you may set out as Coca-Cola using a brand saying we add life for instance or we teach the world to sing I keep bringing that up from time to time but in effect it doesn't matter what the brand really says it'll it'll be transformed it's sort of like that telephone tag game it'll be transformed once it goes into society on the web and it'll become something else so yeah there's a sort of Darwinistic reality here as for companies is that you can see that you know in general maybe up to half of what people were offering companies were offering were faulty products that didn't add any value but they were selling anyway for one reason or the other because they had monopolies or whatever right but today if you don't add value you don't you don't get to live right because it's it's such a short lived illusion of having value everybody talks about it you're gone and somebody else can bypass you immediately right so it's basically this is a part of Darwinism in a way that you can't lie anymore and that you're different than you are you can do that but in many cases it's a very short lived experience and it will get even worse I mean you know this this sort of you know once you have 4 billion people interconnected through digital networks you know you have to add value otherwise everybody will just completely disregard you absolutely there's even at the core what you're really saying is there's also a raison d'être a French expression for a reason to be is is now being challenged because a lot of brands have existed by that control and default but really never by distribution actually in excess really never had the opportunity of the feedback from the marketplace and now that they have it their true core vibrancy is at stake and maybe it was never there maybe there was never a there there with a lot of these brands and I think I don't know who said this but there's a saying that says when the tide goes out you discover who was swimming naked back to by the fig leaf and now you can say okay there's lots of brands lots of people out there now that you should hit the fan the tide goes out and you realize you weren't there you didn't have anything on to begin with it just looked that way so this is very true for banking, for insurance, for financial services value do you add this is the first thing I tell many of my clients let's really examine what your value is and how you make that bigger and what you build around it before you can ask how much money you can ask for your stuff when you pull back the curtain of a lot of the advertising campaigns and the values that have built around pretty skeletal brands there's nothing but the little man with buttons yeah yeah so I mean this is of course we can learn that from the media business but I mean if you're looking at newspapers okay you know people are going to stop buying paper they won't be stopping to buy news but the paper was that that was like the reason for them the embodiment of their value right now they have to make a new embodiment it doesn't mean that their value is questioned embodiment is questioned and so car companies will become companies making wind turbines that's clearly a trend already and car sharing and community owned cars and all these things they'll get into all of these things they can mutate to add value but they're going to have to do it in a way that the majority of the users not the other way around which is to say oh yes you can buy a song for a dollar you know big deal yeah that was cool 15 years ago now it's like people want a virtual jukebox and they're struggling with that because it removes control of distribution oh it's going to be interesting how this all falls what do you think is going to happen Gerd who's going to win what kind of truce will there be what do you see happening in 2012 in terms of this well I think 2012 is as many people have outlined not a year of disaster but I think it's a year of a major showdown of some of the really top level level issues who gets to control information on the internet will it be the top not even 1% but the top 0.01% or will it be the rest of us who controls what happens with the environment the ones that make all the money or the ones who are living on it all these issues will come down to head I think in many ways and going back to branding and marketing I think a lot of brands will find themselves in a very tight spot if they aren't ready for that sort of eco network interdependent future of controlling every piece of the chain so if you're looking at the biggest success of the last decade in general like Amazon, Ebay, Skype and Twitter and what have you they're all decentral they have central pieces but Amazon has a million affiliates and a best example for how Amazon adds value is to say well guess what all the prime members now are thinking in the US unfortunately not here but they keep adding value they think in this direction of the network society if you're not part of the network society thinking then you're going to have a tough future that is sort of my summary there one of the problems was with a lot of these congressmen and senators that took incentives if you will to promote SOPA and understand the internet and I would say that even the lobbyists don't understand the internet and I would say that maybe in some of the leading brands don't understand the internet if you could go and inject yourself into the dialogues and all these boardrooms with these corporations and help them understand because it is complex and that's the problem I think as well Gerd they need someone like you because we make it complex don't we when we talk that's true but at the same time it's also very simple you can just ask yourself a question do you believe that ultimately the more control you have the better you're off or do you believe in the virtue of collaboration or creating sort of a joint project I think Al Gore said if you're not he quoted it from a Chinese saying that if you want to go fast you go alone if you want to go far you go together yes yes I think it's a Chinese saying but basically it's a question of what you believe in and I think if we're looking at the fact in the US half of the house is there millionaires half of the congressmen and senators are millionaires so what are they going to believe in and this is I think this is a very big issue especially strong America and also Europe is that okay who are we voting for and who are we representing and this is the Occupy movement of course that is behind this whole upheaval of saying hey you know we're still here and we are indeed the 99% what do you say Gurch can we hire you the 99% of humanity can we hire you as our lobbyist for humanity and exceed the incentives of these other boys I think that me just like everyone else who is working in the sector we're facing the exact same economic pressures of course there is more money in the traditional system advising companies who have the money to change themselves then to start scratching and to build on the other side and luckily enough there is ways of doing it like being an academic or writing successful books or writing speeches but I think what we need to come down to eventually is to say you know what this shift is happening right now and clearly what I call the ecosystem will fail it will fail on the internet it will fail with the environment it will fail with what I call sustainable capitalism because that window is closing so if it becomes catastrophic in that manner and they retrench will we be able to flip the switch back on will a new internet begin with a new satellite from humanity what will happen if they flip the switch off will we be able to flip it back on well absolutely I think that the they can make this law just like they made the Hadoubian free strikes law in France right they can make the law but it will be rightly disregarded it will not be actually implemented I mean it has been like a couple thousand people were disconnected in France I think but it will not have any effect on what they thought it would do everything that tried to delay is going to happen anyway in fact with doing this you stalk the resistance right I mean you you pull fuel on the flames of the resistance by making it even tighter and of course the numbers of people who are different are growing every single day so I view for example this whole idea of you know starting from media all the way through brands of that control mechanism is becoming clear to every single person in those companies that it's futile so what we need leadership there we need real leadership because Obama in that regard President Obama has become a bit of a disappointment in that leadership I understand why at the same time you know a leader is a leader and at a certain point you know it has to stop it has to become real leadership and so basically I think this is what we're missing in many ways from the media industry too well you know we're going to be distracted too with the imminent conflagration and the Strait of Hormuz it's quite frightening I don't know how that's going to distract us from our economic daily life a lot of things will come to the head this year and this may be one of them I hope not but you know because it's basically the system is very fragile now and it's not the logic is at risk right it's not individual it's like saying okay you know you have a disease but you don't put a bandaid on and just walk around with it you have to go a little bit deeper and our diseases that this belief system is crumbling in many ways and I think there's lots of brands who are already sort of ahead of that time there right which is a good thing and there's lots of music companies also like Beggar's Banquet and others who are ahead of that time there but dragging along everyone else you know this I think this really needs to be the majority of people rather than the reverse I see the future of the free market system in an unhampered web really I see the tail getting longer and longer I see the birth of brands new brands daily challenging old brands and I think they see it too because the trust is between peer to peer and because a lot of the major brands have worked so hard at reducing their costs that really the quality if you remember quality is job one and the ISO and in search of excellence I mean that all fell by the wayside I see new emerging brands that can still remain economically viable creating even more of a long tail in the economy and I see that as a fear that they have but also an opportunity I see entrepreneurship and small business really taking off and but I also see that this may be an attempt to not allow this to happen in a natural combustion well I think this is a great opportunity for small and medium sized companies to take over and if you see what happens as far as leading brands around the world now we have companies like Tencent which is a Chinese company which is one of the biggest brands in Asia we have brands that are coming out of nowhere and taken over from some of the established brands to witness the huge change of decentralized user driven experience I think in general this is a great opportunity but having said so there has to be a level playing field for people to compete without being hampered by thousands of regulations thought out by people who are currently in church oh you brought up the key point because these regulations are what's killing small business not afford it and this is in the regulations in the physical world and I'm sure they're going to want to apply that to the web and every which way from Sunday but what is Tencent? We wouldn't have Facebook or YouTube or Twitter if there was a super law in place right? Because he could have sued what's his name chat early after a week and put into jail for what he did and the DMCA him to say well you know what under this law we can try this and this is clearly not in the attention it can't be in the intention of an enterprising government and of an enterprising nation to come up with laws that will prevent any such experiment at the cost of less than 1% of the industry having their old cake and eating it This is where the jobs are coming from this is how economies will survive it is centric to surviving the economic downturns that we're all experiencing and the debt that is crushing everybody Now you mentioned Tencent and China Well it's the biggest brand that they run in China is called QQ just QQ the two letters QQ.com and it's like Twitter they own all kinds of brands they are the biggest sort of messaging service on the social media platform and it's run by a fairly young Chinese guy I think they're on the stock market already but you know there's lots of things happening like that around the world we can clearly see a trend that this is very bad news for America I mean you know Canada but you're safe but you know the trend clearly is all of the cool stuff is happening in developing countries in Brazil Asia, China, Africa because they're looking to actually create value and reinvent rather than to stick with the stuff they used to have which wasn't much I mean in terms of the economy they want to grow and this is of course precisely one of the issues of their compliance with environment and so on but they are the ones who are inventing stuff now Why is it the western world isn't inventing stuff now In comparison we are inventing lots of stuff in America still but the key factor is that we're doing it on a very high level we already have a lot of things I mean in Europe our main problem is that we already have everything so if we're going to make 3,000 euros a month or 4,000 or 5,000 we already had 3,000 we're not at 100,000 so we're not as hungry and we also come to expect a lot of things from life and from services so we're not in the position to gamble or to experiment as easily and this is for example the Silicon Valley startup culture is that they go for it and it's all out right and this kind of philosophy needs to be retained and nurtured rather than to be because that is the driver of some really drastic innovation and this is where brands also need to bring in people that have this kind of philosophy to invent something and you can see in all of you that Paco said a few years ago is that brands are not defined by the campaigns anymore but by the ecosystems that they nurture so what do they create that creates a larger story and that can be at the center of this but there's an ecosystem Yes and I think that might be something that the more established corporations should consider is more innovation and more management of their legacy brands Yeah it's hard because basically the larger you are of course the more stuck you are with mechanisms and so on it's not so easy but I think usually this is one important point I think is that people don't change and companies don't change because they have insight into why it's better on the other side that just doesn't happen because that's an intellectual process it doesn't have a lot of time stuff companies like Amazon or Netflix that are able to do this but most companies change because either they are under significant pain they are in a painful place and they're going to die and this is why they change this is what Kolek tried for example or they fall in love with a sort of idea they are hooked on something that is good so in general people change when there's love or pain and it's very much the same for brands so that is a good sort of way to start and say okay if you're helping a company let's look at those points of pain and love and see if we can turn those into reinventing Yes absolutely I'm thinking of the motto if it ain't broke why fix it is probably the motto that's operating in their minds but when you put almost all brands all creations that are out there up against the changing world I think all of it needs fixing Forbes I think did a prediction that 70% of businesses would die for this lack of flexibility so I think that's important to warn to give a caution to everybody that they need to be brave and evolve I mean this is part of my job is to help companies develop what I call foresight so just simply I'm asking a simple question what if and then you fill in the gap depending on which company you work with what if somebody invented something that would make what you have look like the lamest duck ever what if some piece of your chain would just fall out and go somewhere else and think about this and try to develop foresight as to what you think is likely to happen in the next three to five years without sort of guarding yourself from what may be new then you can derive it a pretty scary place or a very joyful place depending on which way you're looking well one of the classic examples that we're talking about is how long the car manufacturers held on to those massive cars those what do you call them the SUVs thank you the SUVs see it's left my memory already remember when we had SUVs I think that basically I think the job that we're going to see in 2012 for a lot of people who want to be you know causing changes is to bring either love or pain to those that are about to change because that is the only way they're going to change I mean there has to be some excitement about something and then they go I mean pain for example Fukushima the nuclear catastrophe there that caused a lot of pain around the world and the Swiss government and the German government decided to get out of nuclear and the pain that was caused in Japan caused governments to say we don't want that kind of pain here so therefore we decide differently well you got to give Germany credit though they've been ahead of the game for a long time it's very self-sufficient on alternative energies this is city in Germany called Freberg Freberg yeah so I mean it's very self-sufficient it doesn't use any old power but that's the hegemony that we have to overcome isn't it you know I look at Microsoft Bill Gates never saw the webcam either you know and by the way he's injected into this prosopa battle it's very interesting that some of these players are also some of the technocrats so we've got quite a battle there don't we yes I think we do and of course in a way it's also a bit of a proxy fight it's not just about the issues at stake here right this is basically a desperate move by companies who are feeling that they're going to be displaced by a title search of entrepreneurship that is coming out of the current possibilities like now of course everybody cannot think that a world would exist without Facebook and YouTube you know but this is precisely what a lot of companies don't want they don't want the Facebook of tomorrow or the YouTube of tomorrow because their world is changing and they don't like that right so and this is really what it comes down to it has to be an equal playing field for real innovation that actually has a benefit for the large number of people it's kind of hilarious though because you can't hinder progress you can't hinder revolution you can't hope that the public will forget the web I mean it's just it's actually insanity we can't regress and it's just not going to happen in my view this is my perspective it's just not going to happen so I think this is their final attempt and it's going to be rather interesting year and it'll be bumpy but I think in the end the 99% will rain we'll have major confrontations on these issues not just that but also on a global level these issues have been sort of saved up for decision making point including the climate protocol including intellectual property protection and all these trade rules I mean now a plane that flies from the US or Canada into Europe has to pay mandatory carbon offsetting as of January 1st because the EU decided that you have to offset I know it's ridiculous you're hardly paying for your seat on the aircraft anymore they don't even tell you sometimes I found out that 70% of what I pay at the gas tank is actually taxes and this creates of course a huge amount of conflicts because in the end this is a global topic but the EU has taken the first step now Chinese people have the Chinese government just announced a few days ago that they aren't going to pay and so these are all issues that will come to head and as far as branding and marketing is concerned many of the same issues are going to come to head for example the complete demise of traditional advertising which essentially has always been useless it just never knew about it and there was no other way to do it but now because of social networks and because of mobile devices now advertising is essentially being completely reinvented that's a trillion dollars basically around the world that is being reassigned in 2012 will also be very big year for that so I think what we're agreeing on after this wonderful rich conversation you have such a great intellect I think what we're agreeing on is that we're going to see the market change we're going to see the players change we're going to see new brands erupt old brands wither and die it's going to be a very different place in a year or two isn't it I think so and I think this is a good development because a lot of these things have been percolating for a while but they have to come to a decision making point and the question that I would pose to people are you going to be part of an ecosystem or are you going to be part of an ecosystem you know if you want to pick the ecosystem that's fine I don't believe that's the feature but if that's the way you're thinking of the world then I'm not going to be I'm not going to be your advisor that's an excellent choice ecosystem versus ecosystem that's my next book that I'm writing is on that topic what a great sound bite so you have a lot of hope for the future don't you Gerd I think so I think because in the end the only thing that is getting in the way is of course vested interest that are associated with power and money and a lot of these things become insustainable as we see in the Arab spring right I mean they've had that power and money forever and now a lot of these states and families and kingdoms are crumbling right because when it's enough and it just cracks and so you know maybe America is going in the wrong direction but in the end you know it will crack because it's not sustainable if we could kind of put the cherry on top talking about the consumer because that's an old word too we are not consumers and consumption doesn't seem to be the paradigm anymore how would you re-describe the new audience the new peers vis-à-vis the brands I think the bottom line is that I think we need to get rid of that understanding of the consumer to be an engine consumes gas right but people are so much more fragmented now than just being consumers I mean we're living in a world where there is like a hundred different types of people wanting a hundred different types of things I mean the fragmentation is everywhere right it's in television it's in magazines it's in food it's more diversified than ever before and some of it is a long tail some of it is not but in my view it has little to do with consumption but with participation and those participants are your customers and your suppliers again this is why I call it the ecosystem because it's no longer like you're going to say well we're Walt Disney you know we have the copyright for these images and you can print them in Tanzania therefore you pay us I mean this kind of logic is only possible in a completely controlled market space but it's not possible in a network society because there's always way to circumvent and to recreate and everybody's dependent on everybody else so this is why you know Rachel there's a new movie coming out I think from what's the name it's called Connected not Rachel Boltzmann that's somebody else but it's called Connected the movie and it describes that process of how we're totally connected well remember that we're only like a very small way there because the real power is the other three billion as there's a company with that same name the other three billion are becoming connected everyone else in the southern hemisphere basically is getting connected to the network so when they come in they're going to really push forward lots of these issues and they will not have this western agenda of saying it has to make a profit and it has to grow it's not just that there's lots of new things coming in that are basically going to put away with this idea of consumers and basically this sort of regulated way of saying who makes and who buys and who owns and who does own and so on and that's all going to happen in the next three to five years these three billion people are not going to be like us when they get online they have their own cultures, their own languages English is not growing on the web, it's diminishing it's Chinese, Mandarin, Farsi that's growing on the web and these companies in those countries are going to invent the stuff that we're going to buy in America and Europe well we don't make much anymore do we yeah now we have I mean in many ways it would be improper to say that there isn't enough innovation in America or in Europe there is but in many ways you know there's a little hungriness and the roofless invention that is really tough for us in Europe in particular because you know it's very difficult well the thing is it's like Seth God and was saying in that video that we both shared and loved in the last few days I noticed that on your site too by the way thank you for the retweet America frankly North America has been largely deindustrialized we don't make much anymore which is odd but you know as you see the rise of a middle class the word the hegemonies don't like to hear the rise of the middle class in the emerging nations who are coming into this play the three billion you're talking about you know the the profiteers will be looking for a cheaper labor pool again because they won't be cheap anymore and you see this happening I mean this happened in China and India you don't have that very inexpensive labor pool and they're looking for new markets you see America becomes so broken by the fact that it's economy suffering and globalization that it becomes the most affordable labor pool so don't assume right now that America has everything it is suffering I mean 20% of the population is on food stamps we're facing a crisis that has probably been the biggest ever in America because it's a crisis of the belief this ultimate belief in what I call extreme capitalism which basically means whatever makes money is okay that's right that was for the program for a long time and ever since Reagan it's been everything has been geared in this direction of saying okay, progress, growth profits, money and this system is derailing now because it's topped out well since Milton Friedman passed and there's a voice on privatization and Reagan and Thatcher and so on it's shifted to Keynes which is all about fiat money so I'm getting a little technical here but it's government intervention and handouts and subsidies and this kind of collectivism but I don't think that's going to make it either it's sort of anti-web and freedom anyway so it's a quite a mess out there but I mean these things are the same there's some of the same thinking behind this but basically the ecosystem is a copy of what's happened on the web in many ways because the web is decentralized right it's the nodes are equal there is a process of repairing if there's damage there's lots of chaos yes that's true that's the same than in the ecosystem right and it can be Darwinistic right but it's much preferable to an ego system which would be essentially saying we've got two TV stations and that's that that's what we have in the 50s or whatever I see the web as the saving grace so if we kill that we trigger civil unrest of the 99% but remember that of course the web really can't be killed in that way because it has become like oxygen like water and no matter how you try this it's become now something that is in Finland for example a legal right is to have the internet right in many countries I think there's like 20 countries where you can sue if you can't get online so no matter how you look at it you can't regulate the use of air how well somebody came out some pundit came out I don't know if it was a United Nations person a few days ago and said it might have been a politician in congress who said that the internet was not a human right yeah well you know that's probably somebody who has his emails printed and typed by a secretary which you would not believe it it's actually true many ways but in any case I think that is because that is the case this is an abruptly failed effort it just throws a lot of distraction and noise into the system that we could much better use for other things which is to create a more fluid ecosystem that is a mutually beneficial one rather than an individually beneficial one your new book is called Ecosystem or from ego to ego from ego to ego and what is it coming out well I'm heavily at work on it and I've been talking to publishers and I'm going to really make a big deal out of this book and put it out in the proper way not just on the web I mean which will not mean that it won't be available on the web but it will be done in a larger way including a few other things that I'm working on but basically the subtitle is why business as usual will kill us I recommend that people buy your future of content download it right away it's affordable it's a Kindle book and do you agree that in the context that we're having today that probably is the one that's available right now that's more relevant right yeah the future of content is very much about content of course it's like a three dollar Kindle book so there's no harm done picking it up no printing is being done either but otherwise you know if you want to find my other I have like at least five books that are available free and of course my various essays you know you just put in GERD which is my like the disease you know GERD if you type that and free PDF into Google then you find all of my stuff and of course at mediafuturist.com you can see my various books and G Leonhard on Twitter so I very easily just put in the name yes and I'm particularly liking the titles Friction is Fiction and the end of control which I love this is what we were really talking about and I would assume that's very relevant to our conversation today correct yes I mean it has been written five years ago and it was sort of a half finished I realized as I was writing about that this issue of control is very much you know on people's mind and what goes beyond that control is as you believe and that is necessary right and so it really was about the larger topic which I'm writing about now you know from ego to ego and those two things go together I don't really echo in the ecological sense you know I mean in the connected sense right and so this is really the topic of the end of control is also this topic which has been merged into this book that I'm writing now FrictionAgents.com we have lots of resources about 25 other people who are like minded individuals publishing lots of great stuff including my colleague in the U.S. Glen Hebstra on futurewist.com who has very very similar things when's your next speaking in North America you know that's right now I'm heavily going south you know Brazil I do a lot of work in Brazil Indonesia and Asia but I'm on Plancast you know there's a site called Plancast which allows you to share travel plans so if you put in if you go to my website you can see my travel schedule on my website futurewist.com you can see the next three months there I think I have something booked in there okay well we could we're working on that aren't we Gerd yes well I just want to thank you so much this was the longest interview I've done so far but it was an important one I think everybody needs to hear every drop of this interview I think it will be very helpful very insightful and and hopefully it'll trigger a lot of this connectedness and this this streaming and flowing that we're talking about I hope that you become sort of a household name in the boardrooms because it sure needs to get there so thanks very much oh you're very welcome I was such a pleasure and I'm inspired more so and I want to do this again I have a feeling in six months the world will have change will be on its ears and I may be calling you for a panic interview okay ready when you are okay sounds good Gerd we'll talk to you soon bye bye