IAC tycoon Barry Diller believes Hollywood studios need to “reorient” their business, and fast, or face potentially “catastrophic” consequences.
Former studio manager speaks to journalist Kara Swisher for her podcastHe also expressed pessimism about the ongoing SAG-AFTRA and WGA strikes, and suggested that old Hollywood studios should split with Netflix and its tech counterparts in AMPTP.
“I think there’s one key thing, which is that they absolutely have to get out of the room with almost their fiercest and most decisive enemy, which is Netflix and probably with Apple and Amazon because Netflix is in a business and they’re the rulers of that business,” Diller said. . “Apple and Amazon Prime are completely different companies, they don’t have a business model around film and TV production, it’s just something they do to support Prime or something they do to support their walled garden at Apple.”
“I don’t think they belong in the same room,” Diller added. “I think producers should go (to the unions) and say, ‘We’re on our own, we’re going to go right with you, we’re your savior. Historically, we’ve been working together for literally 100 years. We’re your natural allies, not your enemies.’
Diller argued that Netflix was the “architect” of the hits, due to its business model, and the fact that every other entertainment company has abandoned its lucrative pay-TV model for streaming. Now, thanks to the strikes, Diller tells Swisher that he thinks that next year, when the content pipeline dries up, the subscriptions hit will be “kind of catastrophic” for every streaming service except Netflix.
“A strike only does one thing, which is that eventually the strike will be settled,” Diller says. What do you do, or what do you do? It makes Netflix strong and others weak.
“Interestingly, two of those studios had quite good streaming services called HBO and Showtime,” he adds. “There wasn’t any Netflix destruction of any of those roofs, right. So you could have just said, ‘Leave them alone.'”
Instead, HBO is now part of Warner Bros.’s Max service. Discovery, while Showtime is integrated into Paramount’s Paramount+ service.
Diller argues that companies should instead “reorient” themselves in an attempt to revive the package.
“(They should) say that every one of us has a great television network, fully distributed in every household in the United States,” he said. “Let’s go compete, and let’s not treat it like it’s a little piece of yesterday. Let’s go compete. Let’s take some of our offers. Look, this isn’t the end of the hits business. Let’s take some of our offers and creativity and build our networks back up. It’s there for the taking.”
But he also expressed pessimism about companies’ ability to make this pivot in time.
“Now, after the consolidation, these companies are further down the ladder than they were, and I think they have atrophied in different ways,” Diller says. “There have been, and still are, some good leaders of these companies, but oh my goodness they have problems.”
“Bob Iger is, without a shadow of a doubt, without any rhetoric, a terrific CEO,” he adds. “Put a problem in this field to him and it is difficult to find a better person to solve it. However, he is now facing the kinds of problems that may be unsolvable.
In fact, Diller spoke of the Hollywood entertainment ecosystem as something that was there before, and may not be in the future.
“What a golden thing,” he said, “it was at its best.” “The circumstances are mostly external, but the circumstances have changed that for the worse and I don’t think it will come back.”
Diller also commented on some of the ways he made the news himself. Last month, Diller made headlines when he said top actors and executives should take a pay cut to try to help resolve the strike.
“The point I was making is that the top 20 actors earn significantly more than the top 20 CEOs,” he said. “I’m not one to ever say that people get paid too much for anything, but when you’re in the kind of existential trouble of going on strike, maybe it’s a good thing for all of your big-money bigwigs, both actors and CEOs, to they do it.” Showing little things to the majority of their fellow people. I thought you know, it’s a cute little olive branch. It took off in ways I didn’t really think about.
He spoke about the insider trading investigation into stocks and options at Activision Blizzard, which Diller acquired before the Microsoft acquisition was announced.
“The latest development, I think, fortunately, is that we haven’t heard from any of the government parties for some time. I’ve been interviewed extensively by the Department of Justice and the Securities and Exchange Commission, and at one session I went to Washington for several hours,” he said. Diller: “That was six months ago.” “Neither of us had any inside knowledge, no weapon, let alone hard evidence here.”