 Future isn't my cooking. What a good fit. Great speech. I'm a hobby cook myself, so I totally get what you I don't just have ideas I also actually make things, you know, that's rare, but for my Brazilian for the Brazilians here I have a little snippet here I want to talk first about what a futurist is many of you be saying what in the world is a futurist I mean sounds like a mad mission in fact it is but it's about flying ever flying cars or What is it about right? So how can you even know the future? So I'm not a futurist like Ray Kurzweil or Alvin Toffly, which I could be I'm much more about the present So I was actually thinking about calling myself a presentist But that's another meaning so it's taken so in a nutshell. This is what I do for my clients. I develop ideas I look at the next three to five years and I bring those ideas into my clients. I run a company called the Futures Agency It's a lot like agents for the future. That's sort of the concept If that's even feasible and my main mission is to do this Which is why I really enjoyed this conference. It's been fabulous doing a lot of listening rather than talking which is unusual for me I have to admit But that's sort of you know, that's my do but come to that later so I'm originally a musician and producer made what 20 records I played in Caesar's Palace in Lake Tahoe. I went to Berkeley College. I had a good time as a musician But then I switched to doing stuff on the internet and before I knew it I became a futurist by virtue of my clients telling me that I was one I didn't know what it was so Very much like you and just to give you sort of a highlight of my life You know I do about a hundred gigs a year speaking to companies and conference This is one of the worst and the best gigs I ever done. This is Tehran I'm speaking in front of the Mullahs. Here's me and You can you may guess who this is I'm not going to comment but you can guess who that is in the picture You know, which is of course everywhere in Iran this picture and my topic of my speed is change Of my speech that's quite an ironic topic in Iran. But anyway, so I get to do some interesting stuff Bottom line is, you know, we all grew up if you as old as I am you grew up in this system This is the ego system big companies big banks big record labels big publishers big big broadcasters big taxes big government All of a sudden we are now switching to this kind of system We're switching to a system where all of a sudden we are actually getting more power as consumers as users And we're not of course doing away with the big system not yet It's a little bit like you know, they're still over here But we have gathered a lot of cloud, you know, we can go to trip advisor and complain about hotels We can check flight schedules on kayak, you know We have more power every single day and in many cases that's kind of frightening in fact if you look at Facebook But this paradigm for example of broadcasting and of being a central entity. That's been with us for a long time All right, so big television station mass media and so on and now we're adding this This is sort of the connected economy, right? And it's not actually taken the other one over it's sort of coming in addition So Facebook for example is the biggest broadcaster in the world five in the 50 million users But what are they broadcasting? They're broadcasting us to each other Not regular television or film quite yet, but they will eventually right so they're doing this and the BBC is doing this So I'd say we have both at the same time. We're creating a new ecosystem Ecosystem of the previously unconnected you know the network NBC CBS and the network Which is us coming together sort of in this new ecosystem that I want to talk about in this speech We're having a bit of a war of the worlds right of the disconnected and the connected And you can't really read this quote, but it's a CEO of Telefondica saying one of the biggest phone companies in the world Saying that he wants to charge Google for internet access He wants Google to pay because so many people are googling down the mobile phone Creating network load. He wants to get paid for that. And then we have our friend Rupert Murdoch Saying that well, this is a son actually saying that whatever you are talking about when people cut and paste news content It's theft. It's stealing end of story So you have this completely the world view of saying this is all that's not a good idea You have Viacom soon YouTube right in the end you have this complete War of ideas what how this can actually work together and then we have this Which I perceive sort of be the only way forward not going to Africa, but creating something together creating an ecosystem The CEO of Google CEO of Google has said many times he sees the purpose of what he does to create an ecosystem That has mutual power and mutual appreciation. You may not believe it, but I think he's trying hard right, but this is the model for the future is collaboration now Many times I speak to really hardcore business audiences, you know CEOs of big companies and they say what in the world Are you talking about you've lived in California for too long? This is like some sort of ideology or something But it's not This is not a hippie geek pipe dream, you know, even though I did live in California I think it's the key to the future The key to the future is collaboration in an in a system of win-win scenarios The music industry can't possibly survive without the internet service providers the ISPs and telcos There has to be a system that generates money in a new way that to me is the key of how this works Give you some examples the ego system MTV not to say it's bad. I'm just saying it's an analysis, right? Not to say that MTV is bad. It's good, but it's based on their opinion YouTube is based on our opinion So it's an ecosystem right we say what the program of YouTube is The car industry as opposed to local motors which were heard about yesterday great talk same idea Again the music industry saying if there's a website without a license says the RFPI. It's a big problem for us The BBC says use our stuff to build your stuff There's an API you can suck off the whole thing of the BBC and build your own website or the Guardian Right, you could suck off all the content of the Guardian make a new website in China using all that stuff for free Rupert Murdoch's newspaper The Times one pound now to get access The Huffington post says bring all your buddies which we start a social community in the Huffington post They have now more traffic than CNN So you can see examples for how we're going from the ego system from the you know It's about my money my audience to an ecosystem Not has much to do with food, but it's a sort of similar scenario So we're seeing the shift to hyper connected and interdependent What that means is that we can't make money if the other guys don't make money We can't do what Disney has done Which is to create a complete empire that money always comes back to us one way or the other And that's not the bad thing just it worked great for a while for them All right, but now we have to actually make sure everybody else makes money as well And then we do what local motors does we go from not invented here to proudly found elsewhere Everything I'm telling you today pretty much is proudly found elsewhere The smartest stuff I find on the web Twitter slide share my blog feeds you guys probably tweeting me sometimes We're going from the shift in the minds of people who run companies from return on investment to return on engagement Not wondering so much how much money do I spend to acquire a customer? How much they're going to give back to me? How can I lock them up or target them all that military language? Right now we're talking about return on engagement Close to open I'll explain a little bit later control to trust and fear to confidence If you look at the music industry and the film industry and the digital economy bill, it's a work of fear All right essentially saying okay if this happens we'll never make movies again because we don't get paid Telling every musician that they have to go along with this because they won't get paid unless we stop downloading right That's just a product of fear How is that going to get us to the next iteration of this model? We need engagement. We need confidence in germany Gamer, which is the german author society Wants 12 cents for each song that is being played on youtube as a video Right because that's what they used to have you know, 20 years ago for on-demand performances in china Google has licensed music and shares the money From the free downloads with the record companies All right, so that's again two different models here And of course we have apple all right all of us are obviously happy apple users And cultists I could say I love apple, but You know it was essentially saying okay everything you do is within our control That's the ipad. I'm happy with that as a user But in general we have to say that probably in the long run Can't work you know this idea of great machines that do great things, but just for them I think this is a good example, but probably the last one If you want to keep a close chop like apple you have to be damn good You have to be as good as he is and that's very few of us So it can't work, but most of the time it won't You might recognize this slide That's the music business All right I'm saying that because I worked in music business for a long time I wrote a book called the future of music now it's the past of music But in any case the industry has shrunk 65 in 10 years So congratulations to the music industry leaders with the policy of fear and control. They've made lots of money But I didn't find this myself didn't make this up myself, but I say in the past Power was about what you can control In the future power is about what you can unleash what you can create at a moment's notice Twitter Facebook and so on using those kind of tools, but power is what you can unleash If EMI would take that motto and put it into practice, they would gain I'm certain of it. I tried but of course they weren't listening This is their speech right the record industry association the IFPI In the uk saying protecting intellectual property is key to growing the business Well, none of us would mind protection of intellectual property But is that the key to growth? How can protection be key to growth? That's sort of like saying, you know, it's it's it's not very good fit Now if we put this what timoraili is saying, he's saying obscurity is a bigger problem for authors than piracy I can personally attest to this having made 20 records Obscurity they're all fairly obscure and written four books right Obscurity is a bigger problem than piracy Our problem is not that people want to download our stuff without paying opponents that they don't even know us And then there's no mechanism to pay So we have to turn this around we have to think of this a little bit differently The music publishers association of america ran a campaign last year or the year before Saying who's protecting your rights? Of course that question is very present in britain the current discussion of file sharing and so on I think it's barking up the wrong tree Right, it's the wrong question The question isn't who who's protecting our rights, but how do we get lots of people to use it? And what's the mechanism to monetize? It's not protection. It's engagement Now with the digital economy bill and as you know, you know, 28,000 people have been sued for downloading music Many many more are being sued and the ipad is next right We're going to see a lot of discussion This is the ecosystem the ecosystem saying, okay, we'll lock you up if you do the wrong thing on the internet first music Then pdfs motion pictures jpegs word of blog blog posts Whatever it is right you'll get kicked off because you didn't do the right thing I mean think about that. We'll be ending up in china very soon if we go in this direction Benjamin Franklin summed it up not Any better than I could he said those who can give up essential liberty to obtain a little temporary safety To serve neither liberty nor safety I think that's something we have to face we have to face the fact that we can't do this Without giving up a lot of things that we really like So the alternative is to build a system that works Not one not one that locks Which brought me yesterday, uh, you know searching my in my archive, you know This is you make loud. It's a great, uh great cartoonist right and saying, you know, this is what a wall garden looks like, right? You want to live in this world where everybody who is inside makes money everybody else can go screw themselves, right? That's the world we live in If that's the world of the internet in the future, I don't want to be there We have to get out of this wall garden. We don't need more wall gardens. We need less We need good gardens, you know talking about cooking, right? They create good food But for everyone not just for one person For one company So I'm proposing this is a mock-up. I'm proposing a facebook world leaders group, you know where we have Gaddafi and Hugo Chavez, you know talking about how they Get on, you know, we should do something like this, you know, this is obviously mocking that wasn't my idea But this is the kind of stuff you find on the internet, yeah So here's marx lookerberg from facebook, right? And he says facebook is the most powerful distribution network and distribution network. He's not talking about social network Distribution network facebook is a broadcast and the most powerful mechanism has been created in a generation 10.7 billion minutes spend on facebook every single day Not of us here because we can't get on But you know in general, that's how it works So facebook has started to spin and I think basically we have to face the fact talking about facebook Ecosystems are complicated Openness is hard Permanent beta see google can be stressful Democracy is sometimes work If we want to live in an ecosystem and we really have no choice, we have to do the work It's a lot easier to live in a tyranny. Look at apple We don't have to decide we'll just buy So in general, I think that's something we have to face ecosystems will be requiring work from us and When we talk about ecosystem, we can't get around the fact that most of this will not happen in england or germany Or in the u.s. It will happen in those orange and red areas in the so-called developing countries I do some work in brazil that's here just in case you didn't know Okay, what's happening in brazil now all of a sudden in brazil This idea which was expressed in my first book music like water stolen from david bowie by the way from an interview All right, this is actually happening in china and in brazil in brazil is being discussed that you can pay 150 a month To get the right to download stream anything you want as a music consumer and even better You don't actually pay you bump it off to the advertisers So you solve the piracy opponent by the government saying this is the deal like radio It can't be illegal if 95 of the population is doing it That's the alternative to our digital economy bill So the idea of going from a copyright essentially To a usage right That doesn't deflate copyright. It just means makes it available. Right? It's an expansion or maybe it's a You can set an exception in a way like radio. So that's what we're going to see. I think in the future We're going from a copy economy To an access economy This is good news for everyone Except for those that sold hundreds of millions of copies Right because obviously the more we access the more we cut away from the heat from the hits, right? So in music terms the five people who made a killing with music they're going to probably sell a little bit less Including you out you too and bono and you know who has spoken out against the flat rate and those kind of things, right? So that's basically what's happening. All content is becoming a click All books or music or films And we have to create a new logic. I spoke at an event a few years ago in vienna called the creative With ours electronics And basically what we came up with is that we need a new social contract Of how we deal with creation and who gets paid with what we can't just take the stuff from the past and throw it on top of this Now I do a lot of work in branding and marketing as well. We have the same issue Marketing is just one step behind the media business same disruption From the ecosystem to the ecosystem Branding used to be this, you know, just give your stamp out in the consumer and they'll buy anything once they heard it 10 times Now it's this The paradigm of twitter whether it's twitter actually are not makes no difference But the paradigm is one of following of friendship, right of connecting of liking you could say, right? That's so much harder than to say you're going to see my ad 10 times and you'll just end up remembering on buying my damn car Anyway, that's how it used to be branding sort of top down All right, so I think branding becomes banding, you know going back to my music experience So you're essentially creating a band with your followers with your users with your consumers And that is the power of the network that we that we can use for this Similar to this, you know appetizing on television radio news as you know, of course is declining everywhere So now the watering can that we use to use as marketers is no longer really working with skipping to a sprinkler system The most efficient marketing is direct marketing now very soon on the mobile devices with opt-in mechanisms When you drive by my shop, you get a message if you have opted in you interested in cooking You'll get a bleep on your iPhone as you come in the vicinity, right? That's the sprinkler system that we're going to see that's going to pay for a lot of content $1 trillion in advertising money Marsha McLuhan The original future is you know, he said this very astutely. I think 50 years ago He says he he's only talking about he I'm sorry for you, but he talks about he but he means everyone people He says he wants a way of interrelated by which people feel that they are changed that they're getting with it They're getting involved. They are participating That's really what it's all about Even if participation only means clicking the like button Or sending out a youtube link or or doing a rating or whatever it is He don't have to write Wikipedia entries to participate That goes with this slide This is all we were concerned about in business for a long time We want people to damn just buy the stuff and just shut up and buy our stuff today It's this first It's getting some sort of fan right getting a relationship with somebody who is going to say, you know, this is basically Confronting us with this whole logic. We have to get fans first before we get customers