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>>ARORA: --that solve the issues that we constantly grapple with and try and find a solution and
try and find a way to get a right, are some of the issues, which Colette has been highlighting,
and I'm very glad to hear that a lot of things that she's said sort of resonate with us,
and resonate with the challenges we think we face and the challenges we think all of
us are likely to face going forward, in not just a digital marketplace, but more so what
I would try and say is a digital society we're sort of heading towards.
So, it's good that we should be debating these issues, because if you think back 10 years
ago, which is when I used to live in Boston, and I remember getting myself an Internet
account and not quite knowing what to do with it because I was told it was good to be able
to use so that you can see magazines online. And I couldn't quite understand why I would
want to see a magazine online since I already have a copy in my house.
And I didn't have too many friends who had email at that point in time.
At that point in time, the Internet was for geeks, or the early adopters, as we like to
call them. And at that time, there were about 57 thousand
people on broadband 10 years ago and 70 million people connected to the Internet.
If you play that movie forward, as of the end of last year, there are 1.4 billion people
connected to the Internet around the world and about 400 million people connected by
a broadband. So, clearly, this is no longer an early adopter
phenomena or a phenomena for people who have technology affiliations.
This is a phenomena, which is mainstream, and it is appropriate for us to be debating
these issues, and trying to understand, and how do we continue the march towards 6 billion
or 7 billion and make sure that we don't have issues like social inclusion or issues like
people not having access to the various kinds of technologies and opportunities as they're
offered. In that context, there's a way I like to think
about it, is this is like 1.4 billion people who live in a new country, because a lot of
these people have a very similar set of characteristics. If you think about what's happening on the
Internet now, or this digital society, people are beginning to maintain their identified.
People go on Facebook, people go on MySpace, they go on LinkedIn.
They are beginning to manage their identities. People like to have their own email address
with their real names. I remember 8 or 10 years ago, we would just
want to have an email ID, just so that we could what's going on.
But, now we're beginning to maintain our identity on this net.
We are beginning to show similar characteristics. We are beginning to collaborate. We are beginning
to form communities. And not only that, we are beginning to have
similar expectations from businesses that we interact with on the web.
So, you're beginning to see a whole set of characteristics as the digital society is
beginning to take on, and it's important for us to understand the implications of this,
and it's important for us to play this movie forward, and then come back and say, "How
do we need to shape these things from a regulatory perspective, or from a policy perspective,
so that we can get towards more desirable outcomes in the longer term?"
As opposed to make some early mistakes, which could end up in the wrong place.
If you take a look at how this society is beginning to impact different parts of business,
without wanting to sound like this is too big a deal, but I actually think this is almost
like the next revolution that is happening in our lives, because it is going to change
almost everything that happens around us. And the way I like to describe it, is I think
we are the transition generation, all of us in this room.
Because my daughter, who is 11, does not understand why things have to be programmed and watched
in television in sequential order. She thinks everything should be available
at any time she wants. She walks up to me, asks me questions, and
says, "Dad, why does an Octopus have 8 legs, and October is the 10th month?"
And when her father cannot answer, she figures that Google or Wikipedia are more likely to
give her a better answer than her dad. So, you can already see the new the generation
is trying to figure out who to get all these things answered without having to rely on
their parents. So, this is going to reshape how we live,
or how the next generations live. We are the few people who remember what life
was without it, and what life is with it. But if you go back and say, "Do you remember
a world without electricity?" We would have to relearn how to live if suddenly
we didn't have electricity for a few years, or even more recently, we'd have to relearn
how to live if we didn't have mobile phones, and maybe in a few years, digital cameras.
So, this is what's going to happen, I think with the Internet.
Ten, 15 years from now, people will find it hard to imagine a world without the Internet,
or without this digital society. And what we do now is going to shape how that
looks like 20 years from now. So, it's very important. It's very hard to
see that evolution happening when you're sort of in the midst of it, except if you step
back. I moved to the UK 9 years ago.
I moved from the United States. I have VCRs, which I'd recently bought, and I didn't want
to replace them, so I plugged one in the UK. Purely due to my stupidity, it blew up in
my face almost, not realizing there are slightly different standards in different parts of
the world. So, I decided to get myself a new one, and
when I went to the shop, the educated and probably resigned gentleman said, "Don't bother
buying a VCR. Buy a DVD player." Which, I did. Except when I went to my local
video store, there was a small rack of DVDs, which I could buy, which were all the classics
because they figured out the only thing, which will sustain in the long term would be classics
because it's very hard to have a DVD and a tape for new movies.
So, I was sort of relegated to watching classics on my DVD player. I couldn't get a new movie.
Nine years later when I walk into that store, I can't find a tape. I don't know where all
of the VCRs have gone. And if 9 years ago somebody had told me that
in 8 or 9 years VCRs won't exist, I'm pretty sure a lot of people would've said, "That's
ridiculous. That's unlikely to happen." So, it's very important, if you think about
that, if you think about what people are doing on the Internet, and I think there is the
seamstress and there is the gentleman wanting to read the Swedish newspaper, and it is impacting
everything that we do. If you look at the world of commerce, in 2008,
440 billion dollars of ecommerce was conducted on the web.
About 150 billion of that was in Europe. That a good number.
It's 150 billion dollars of goods and services exchanged on the Internet.
But, even more so, what's important is over 70 percent of the transactions are actually
influenced by the web. It's very rare now that people, or consumers,
will go buy a big-ticket item without spending time on the Internet and doing the research,
which is actually changing the way things are sold.
I remember talking to an electronics retailer in the UK.
I said, "How's business?" He said, "Business is okay, but this Internet thing is a bit
of a problem." And I said, "Why is it a problem?"
He said, "Well, in earlier, if you came to buy a TV from me, I had really smart sales
people, and they'll tell you, this is one TV, this is the other TV, this is the third
TV, and the real clincher was when the consumer said, ‘Which one, should I get?' the
guys would say, ‘They're all three good, but I actually have the one on the left.'
And that'll be the deal, because if they guy who knows everything about TVs is buying the
one on the left, that must be the best option, and that would make the sale.
"Now, people show up with sheets of paper printed out from the Internet, and they want
to know the difference between aspect ratios and big sale ratios, and where the AV plug
is. So, they consumer is way more informed, and that is changing the way."
So I said, "Well, how are you solving this problem?"
He says, "Well, I've got to send all of my sales people to Internet training."
So, again it is changing the way that commerce is conducted in today's world, and it is going
to continue to change the way commerce is conducted in the future. If you look at the
world of information--I'll give you the example of my 11-year-old.
She believes that it is much easier to go find information on the Internet.
I grew up in India. I studied in engineering. I could not get access to books, which were
printed in the United States or the UK, because I couldn't afford a trip to the British Library
every week, but I'd want o read the book. Today, with the benefit of the Internet, with
the benefit of digitization, there are consumers around the world who are able to access information,
which is far more easily available than it used to be available at that point in time,
and I think this is going to become more and more the case.
What we're going to see, is we're going to see a lot of people having to bring information
and make it available digitally around the world.
If you take the world of communication, I told you the notion of my not knowing what
to do with email 10 years ago, now I don't know what to do without email.
On last count, there are about 1.3 billion email addresses that people have.
On last count, over 200 billion email messages are sent every day.
Skype accounts are 8 percent of the international voice traffic.
The 18 million uses update their statuses daily on Facebook telling their friends what
they're doing. So, clearly the way we are communicating with
each other is beginning to change. I could give the example of how the motivation
of a lot of people in the UK is how they can communicate with their relatives far away.
It actually doesn't matter how you get hooked onto the Internet, because once you get hooked
onto something, you start using it and discovering the other users that it has.
So, there will be very, very many different things that people will do, and whether content
is king or services are king, or different things that we do are king, in the end it
is the end consumer who's actually going to use all these services, and it's their ability
to discover them, their ability to learn about these, their ability to be educated about
these, and us making sure that everything that they need is available for them, is going
to be important. If you take the world of entertainment, I
think the biggest change that is going to happen in my lifetime is going to be the way
entertainment is created and consumed. We're seeing what's happening in the music
industry, and I understand some of the issues around it, but I think the next big revolution
that's going to happen is going to be happening in the television business, because, like
I said, my daughter does not understand why she has to wait on Friday evening at 9 o'clock
to watch something, which might be past her bedtime, or why she has to be home on Saturday
afternoon when something's playing on television when she'd rather be out playing tennis.
So, we are going to go to a world, which is sort of more an "instant gratification world"
where things are going to be available when you need them and where you need them.
There are various examples of--there's this Portuguese girl who studied in the UK who's
a music fan, and she decided to start recording songs and putting them on Youtube.
She did that and she went back to Portugal and she kept doing that for about 30 days,
and she started developing a following, until a point in time where over half-a-million
people around the world were beginning to log in to listen to her every morning when
she'd record something. Well, thankfully for her, as well as the music
industry, I think it was RCA or Columbia, one of them, decided to sign her up for 1
million pounds, and she is now a new budding artist.
The reason I am telling you the story is not because--there's always a case you can find,
but actually it is an insight into how the dynamics of the entire artists discovery talent
discovery process is going to change the music industry and the television industry.
So, there's a tremendous amount of change that it likely to happen in the entertainment
business as well. Take the case of newspapers. It was hard for
us to get a Swedish newspaper on time or an Indian newspaper for me if I was in the UK.
We're going to see a lot of disaggregation of content happened as this begins to be used
as a platform for publishing and gathering news as it already is.
So, if you look at all of these changes that are happening in front of us. These are going
to have a significant amount of impacts on businesses, as well as a significant amount
of impacts on consumers. If you think the first thing, which I see
from my perspective--the best way to think about the Internet is actually, it is the
world's largest information communication and distribution network.
That's what it is. It is going to change the rules of communications, change the rules
of distribution and to change the rules of the way we access information.
And if you believe that in any business that is involved where distribution is involved
is going to change. There are examples of the guy, John Murray
Wells who is in the UK, again, who started a company called Glasses Direct.
He couldn't find prescription glasses cheaply. He decided he wanted to start a business from
his father's extra bedroom, and today he's the largest prescription glasses retailer
in the UK, because he offered these things for $29.99, and people decided that he was
offering good service, and he was able to build a business on the back on that because
he eliminated the entire cost of distribution and he turned it into an on-demand business.
He ordered, he went and ordered and delivered to you.
So, it is going to change the way we actually look at distribution in the business world.
There is a whole different power that is going to get created in terms of the power of collaboration.
Consumers are beginning to collaborate. I think that the most recent example is the
example of the election in the United States. There is a website called MyBO--my Barack
Obama--where 25 percent of the people who voted for him in the election were connected
by using Facebook communities. So, people could go up there, be part of a
community, and they could choose to donate, they could choose to get together on a certain
set of issues, and the amount of collaboration that it created was phenomenal and people
felt that they were engaged. To Colette's point earlier, there is a tremendous
amount of participation that is going on from a societal perspective, and they are going
to participate in the process of forming opinions. On a much closer note, at Google, we were
able to take a bunch of data--and in the US--we've taken the data, and we have been able to analyze
the searches around flu. And based on the searches on flu in different
parts of the US, we are actually now able to create a predictive model for flu outbreaks
before they happen, which is much quicker than the way the government agencies can collect
the data or report it, get it all from all the doctors, and figure out what to do with
it. So, there is another sort of positive opportunity
here. This is a positive opportunity with the power of data.
You can actually take tremendous amounts of data and reuse it to provide much better services
for the consumer, or much better services for society.
The other one, which is because whilst people think we're in the advertising business, we
think we're in the technology business. The other fascinating sort of development
that is going to happen with all this data for us, is we're going to think that the whole
concept of translation is going to get enhanced by this.
So, traditionally, translation has been sort of dictionary translation.
You take a word, you look at what it means, and you translate it.
Now with the fact that we can actually find tens of millions of books, which are digitized,
we actually are able to compare sentences. So, if you look at a sentence that is translated
40 times the same way, we believe that this must be the translation for the sentence,
so it becomes more sort of easy to translate as opposed to looking at it on a word-by-word
basis, which usually has very, very strange results.
So, again, there's this tremendous power of data that can be used as this begins to happen.
So, if all this is going to happen, the question which I often get asked, is, "Well, how are
we going to pay for all this stuff on the Internet?"
How are all these business in entertainment going to make money?
And people get surprised. "Well, there's so much online advertising going on. There's
so much money being creating in advertising." I don't think it's any different than the
way we've been monetizing content for the last 50 years.
For the last 50 years, the way it works is you create content, and either you charge
a price for it, and you get paid a subscription, or you advertise against it, and people pay
for it by advertising. I have free newspapers in the UK I can pick
up in the tube, I can read and leave it there, and they're fully funded by advertising.
And then I have newspapers, where I have to pay a subscription, and I have journals where
I pay a subscription, there's no advertising in it.
So, there's a huge sort of spectrum of how these things get paid for.
Interestingly, a lot of the Internet is paid for by advertising, and whilst Colette talked
about Internet advertising, and I wrote down the words she said.
She said, "It is about transparency." And I totally agree. It is about transparency.
She said, "It's about informed consent. Consumers should be able to opt out."
And I agree. Consumers should be able to opt out. It is about their ability to change their
mind--and it is about their ability to change their mind--it is about effective processes,
and not advertising against sensitive areas. I have fully subscribed to that notion. This
is the way that we need to make sure that we are able to advertise to consumers and
also make sure it's relevant, which is what she said.
Because fascinatingly enough, if you can get advertising as close to information, it ceases
to be advertising. And the best way to illustrate this is if
you and I are walking in a desert, and we're really thirsty, and you see a big sign saying,
"Water here", I'd consider that information as opposed to advertising, even it had, "Evian"
or "Volvic" at the bottom of it. But, if I see another one 50 yards later,
then I'm actually going to probably get bothered by it and deem it as advertising.
So, the question is, how can you understand the preferences of consumers and be able to
give them advertising, which becomes closer and closer to information, which is probably
going to be one major way that we are going to be able to pay for all the content, as
well as the creativity that we need to continue to maintain as we transition to the Internet.
If you think about these issues from a regulatory perspective, there's a lot of conversation,
and I think there is a need for a holistic look at some of these issues, as opposed to
looking them in silos, because if we look at them in silos, a change here makes a big
impact somewhere else, in which you are unable to anticipate.
And I just want to make sure that we don't risk the development of this digital society,
when we look at it individually. So, if you think about the notion of--we test
upon the notion of advertising, and interspace advertising--but, you think about the conversations
and our privacy. I think it boils down to something the Commissioner
has said in her speech, and I was able to look at it--it's the notion of trust.
If you can find a way that there is transparency and trust, this thing is going to evolve.
I remember many years ago getting a credit card, and once I have a credit card, it is
so convenient, I don't carry money when I travel around 30, 40 countries around the
world constantly, I prefer using my credit card.
Well, I pretty sure, if somebody wanted in my credit card company, they would know exactly
what I ate, when I ate it, when my birthday was, when my wife's birthday is, how old my
child is, what I buy at the grocery store, how many people I had dinner with, and where
I like to eat. All these things are easily deductable and
are here to stay. These things are easily deductable from all
the information about me from my credit card company.
But the reason I choose to use it, and continue to use it, because I trust they will not abuse
the data. I also choose to use it because it gives me
convenience. So, I've made a conscious choice as a consumer
that somewhere, there is tremendous amounts of convenience, and as long as I can trust
the provider of that data. I think the same principles will apply on
the Internet over time. It is just that if you don't have enough experience
with enough providers on the Internet and people who want to create sustainable long
term businesses are going to have to follow those principles of making sure that they
can be trusted with consumers' data. If you take the issue of copyright, I gave
you the example of the book which I could not read when I lived in India because it
was in the British Library, and I had to wait every morning--it was a physics book for my
lectures--I had to go to the library every morning, and my fellow student who borrowed
it decided not to return it for the semester. So, we would all go there, and we'd wait for
it, and we wouldn't return it. So, we had no choice. We didn't have access
to the book. But, if I remember, you go to the library,
and go look through the index cards, flip them, and say, "Go to isle number 3, turn
right, it should be in the third section." And you go back and say, "It's not in the
third section." And we couldn't quite tell if it was misfiled
or didn't exist. And I wasn't even sure that was the book I
actually needed, or if there was another book. Now, today's technology actually allows you
to very cheaply digitize the entire book and index it digitally, and then I can see a snippet
of that book and understand if that's the book I want or not.
But, today's copyright laws do not allow me to do that because they were not created for
the digital world. So, the question is, how do we take a look
at existing regulation and see whether it is going to go forward and enable this digital
society, and what changes do we need to make to some of these issues.
The other issue is the issue of openness. I think one of the things we need to continue
to drive this Internet society or this digital society, is we need interoperability and openness.
We need things to be based on open source, open cords.
I'm surprised that today instant messengers don't talk to each other.
This is like saying the telephone network of one operator should not talk to the other
operator because I want to protect it. Imagine if our mobile phones stopped working
if--and we would have to know which mobile phone operator the other person is on before
we would able to talk to them, or we're not able to talk to them.
So, there are some things we need to do in terms of creating openness and interoperability
to drive this continuous sort of evolution of the digital society.
So, from my perspective, there is lots of tremendous amounts of opportunities that this
offers us, and there are tremendous amounts of challenges.
And the question really is, can we make sure that we think through these, find the right
solution in the interest of the consumer and making sure we don't create more barriers
in the way. And I think we're fully signed up to do something
like that. Thank you very much for listening.
>> SPEAKER1: That was very interesting. We're running a little bit late, but I'm sure--