“It’s all of broadcasting that’s in danger because of what’s happened with streaming and with other services in that the only people who are willing to watch commercials are people that can’t afford to buy the goods being sold,” says media mogul Barry Diller. “That’s an existential long-term issue. It’s a fascinating time because it truly is a giant arms race. When you have a giant arms race it really is kind of last dollar in.”
Barry Diller, Chairman and Senior Executive of IAC and Expedia, discusses how streaming has upended broadcasting and Hollywood in an interview on CNBC at The Allen & Company Sun Valley Conference:
Don’t Know Who Is Going To Win The Streaming Wars
I don’t know who is going to “win this” (the streaming wars). This is a weird transformation. Ten years ago you essentially have these six movie companies that had hegemony over the entire production-distribution business. Along comes two complete outsiders, Netflix and Amazon, that totally upended what was a kind of a stable business in terms of how it functioned all throughout the world. If you owned a movie company you kind of had a worldwide franchise. Now you have an arms race that never existed before. You have a complete blurring of television and movies which only happened in the last couple of years.
You have these two new entrants which have forced not only consolidation on the old players but forced them to now make investments in their wildest dreams they’ve never had to make before. So you have Disney which has mobilized itself like a true, God-knows, super force wanting to compete in streaming because of these two big players, Amazon and Netflix. You have AT&T reorganizing itself, buying Time Warner. They’re going to compete.
Hollywood Was a Cottage Industry and Now It’s an Arms Race
How many people are going to be at this table five or ten years from now? I think it’s impossible to say. Hollywood is irrelevant. It is irrelevant to the following extent. Before, anything those majors did was kind of an absolute. You couldn’t dislodge them, you couldn’t do anything. So along comes two outside players and everybody is completely dislodged and discombobulated because they can’t get access directly to the audience.
The fact that they’re competing and the fact that you’ve got two big funded players─although they do have a lot of debt─Disney and AT&T, who are going to enter this in a very vigorous way, but that has nothing to do with what we used to call or think of “Hollywood.” This was a cottage industry and now it’s an arms race.
All of Broadcasting Is In Danger From Streaming
I’ve said this to my parral, no one is going to compete with Netflix in gross subscribers. I believe they have won the game. There is nothing that I can see that is going to dislodge them. Amazon is in a completely different business in that it’s selling Prime which gives you all sorts of services, just among them is video and television. Disney has the best chance just because of its very very popular content and the money, the distribution, and the Disney name that it’s putting behind it. Disney has the best chance to get millions of new subscribers. Will they ever get to Netflix (subscriber levels). I don’t think so. I don’t think it matters much.
I never thought and don’t believe that it takes size really (to compete) because if you’re making content there are so many buyers. You don’t need to have any size, you just need to have some talent and some energy and you can do well. Can you build a big empire? Unlikely. I don’t think that the smaller players are necessarily in danger. It’s all of broadcasting that’s in danger because of what’s happened with streaming and with other services in that the only people who are willing to watch commercials are people that can’t afford to buy the goods being sold. That’s an existential long-term issue. It’s a fascinating time because it truly is a giant arms race. When you have a giant arms race it really is kind of last dollar in.
I Think That Regulation Is Mandatory (of Big Tech)
I have absolutely always thought and always believed in sensible regulation (in regards to Google, Facebook, and others). When you get to be of a certain size and when you influence markets there should be regulation that’s tailored to some of the things that are outgrowths of you having a certain kind of market size where you can dictate things that may not be in, let’s call it fair playing field, best interest of all players, etc. I think that regulation is mandatory. I think that it will happen.
I don’t think that these companies should be “broken up” unless it is proven that regulation doesn’t work. I’ve lived in environments where I grew up in broadcasting, broadcasting was a very regulated world. You actually got your license from the government and they could take it away from you. That’s sword over your head made you act. If you didn’t want to act decently, it sure of spurred you along the way. So I’m a believer in good regulation. I’m hopeful.