Finland has a business culture that helps start-up companies in the tech sector, says the chief operating officer of Rovio, the makers of Angry Birds. He fears, however, that European regulation could create problems in the future.
Harri Koponen is chief operations officer of Rovio, the Finnish games company that produces the Angry Birds app. He spoke to EurActiv’s Jeremy Fleming in Brussels.
How did your company come into being?
This company started in the early 1990s, and arose from the Assembly demo party. Assembly is a gaming event in Finland which takes place between July and August, and lasts three to four days. Through the 1990s, Assembly grew so large that they rented the largest sports arena in the country, an ice rink in Helsinki.
Rovio started by winning a competition with a game called “King of the cabbage world”. It was no big deal back then, just a few guys drinking Coke and eating pizza in the hockey hall. They were awarded something, but it was no big deal. Nowadays Assembly is a massive event.
Did the fact that it was based in Finland help?
At that time in Finland, we had the mobile and ICT tradition – with companies such as Nokia and Sonera – and that was a big help. This group of companies created an atmosphere where there were knowledge workers at an early stage. It was clear that fixed line [telephony] was declining. You needed that kind of an ecosystem to pave the way for what was coming. It meant that when you went down to the pub, or in the locker room after hockey, people would say: “Why don’t you do this, why aren’t you doing that?” It meant that you were getting feedback from ‘the other side of the aisle’.
It is not necessarily by design that such an ecosystem occurs, so much as by chance, but it helps. It was also undoubtedly assisted by a service-driven environment: where the company was only taxed when it started to generate income. We ICT companies cannot operate alone; we need an ecosystem around us.
Where might European Commission data protection proposals impact on your service?
The best way to improve our service is to analyse the data, not using it for marketing, we are very cautious about using our fans information like that. But engineers can improve the experience of fans, making it more delightful and a positive experience through that, and that helps us to improve our service which in turn helps us to sell more.
App companies are small, we do not have extra people to look after data, and if we are forced to do so then that means hiring extra people. It is completely unnecessary and an unwanted process, kind of “big brother is watching you”. We do not want to interfere; we will do what is legislated but hope that this is not too burdensome.
With the Angry Birds app, where is the potential for difficulty in the data interfacing?
There is a consumer with an iPad or a mobile phone, and there is information coming and going through the app into that item. Our interest is ensuring that they get the best service, we are not selling their data.
The IP location is the most important data we will use. We do not use the location of the equipment to sell anything to the user, but to guarantee a minimum downloading speed. It helps, for example, to identify where there might be a problem. If there is too low a speed then the bandwidth might not be enough, if the service is going to be seamless then it is really necessary for us to use this data.
If data protection regulation did stifle innovation, then where do you think that start-up companies could be attracted to go, if they leave Europe?
Right now the entertainment and apps business is one of the most competitive environments. The Nordic region represents a business hub for innovative ICT companies, but so do parts of the US, and Asia is also coming.
How can Europe invigorate its innovation tradition?
‘Mobile valley’ has existed since the 1970s and 1980s in Finland and Sweden. That is where mobile technology first emerged with Ericsson and Nokia. The big operators came from there, and Europe was a driver.
Now we need to keep that development in mind. We need to show that we have done it before, and to demonstrate that we can continue to keep it coming. Let's remove the “We can’t” from the European mentality and lets have "We can do this as a team!”, instead. Europe needs to stand up and start to do things. We would like to see others taking this approach. We need smart regulation and smart institutions.
Can hubs be encouraged using subsidies?
Subsidies are good when they are tailor-made and targeted. If you want to scale something up and there are ambitious people, they need subsidies. Subsidies granted with with no incentives attached are a bad thing in my opinion.
But we are employing 550 people so we are part of the ecosystem now. The data regime is important because we need to remove the obstacles of fear from peoples' minds about roaming. Europe has potential but we need to let it flourish and not stifle growth. If there are funds for companies then they should be put to help companies. We could do more with structural finds. These are going to stay in the EU, since we are not going to leave Europe.
IP protection is one area where the EU can really try to push itself. For example, with trademark protection, making sure that there is no need for companies to change domicile, and that intellectual property is proportionately taxed.
IP is a chance to capitalise on Europe as a hub because on copyright it is already considered one of the world’s best places. So lets make Europe fast on IP, because then there will be more developers here and there are already good schools, and this will then become a self-fulfilling cycle. Ericsson is still doing pretty well, whenever the attention is facing US we think that we have lost.
What is in the pipeline for Rovio?
We have built up one of the largest animation studios in Europe we have we are launching services this spring, then we are going to make a feature-length animated movie in 2016. So we are in the entertainment industry, so it’s a combination of games and video and animation. The Angry Birds feature film will mark Rovio’s foray into movies, after selling games, books, a wide variety of toys and other consumer products over the years.
The company will produce and finance the film entirely outside the studio system in order to retain full creative control. John Cohen, who worked closely on the Hollywood animation Ice Age, is working with us. It is going to be an animated film but we have not said what it will be about exactly.
>> Read our special report, The internet: Europe's future growth driver?