Barry Diller Takes on Media Deregulation

Editor's Note: This is an edited transcript of an interview with media mogul Barry Diller who appeared on the PBS weekly newsmagazine NOW with Bill Moyers, on Friday, April 25.

Many things can be said about Barry Diller. But what he says about himself goes right to the point.

"I've not conducted my life in the service of smallness," understates the man who created Fox Broadcasting and ran some of the world's media giants: ABC Entertainment, Paramount, Vivendi Universal. And is even now chairman and CEO of USA Interactive, itself an empire of informational services from the Home Shopping Network to Ticketmaster.

"Second," says Barry Diller, "I am a contrarian." This is the man, after all, who at the failing Paramount Studio took a huge gamble on a movie called "Saturday Night Fever." Everyone else said it was a sure loser. It then broke every box office record and moved Paramount from last to first place in the motion picture business.

Now, once again, Barry Diller is shaking up the media world. A couple weeks ago in Las Vegas, he stunned an audience of broadcasters with a speech in a moment where fewer and fewer conglomerates own and determine more and more of what we see, hear and read. And the FCC is about to allow them to own even more. Barry Diller said, "Whoa! We've gone too far." He's here to talk about that contrarian idea. Welcome to NOW.

BARRY DILLER: Nice to be here.

Why now? Why did you choose this moment to speak out on media conglomeration?

Well, I don't know. Maybe because, you know, all the forces are, so to speak, gathered. ... Thirty years ago, three companies controlled 90 percent of everything we heard or saw. And that was a bad idea. Now four companies, five companies control 90 percent of everything we see.

I mean, you stated in your speech that ten years ago independent producers in Hollywood created 16 new television series. Last year, only one. Is that the consequence of oligopoly?

Sure it is.

How so?

Well, if you have companies that produce, that finance, that air on their channel and then distribute worldwide everything that goes through their controlled distribution system, then what you get is fewer and fewer actual voices participating in the process. Used to have dozens and dozens of thriving independent production companies producing television programs. Now you have less than a handful. What's caused that is the forces of consolidation.

There should be some restraints. Broadcasting really used to have a very clear public service quotient and it's been lost. Other things have been lost too. This perfect balance which was created by fear (is gone). Fear that your license would get taken away from you plus a real sense of public service responsibility. That those airwaves actually belonged to the public. You used them. You profited from them. But you had to keep it in balance. That was a healthy environment. And in that environment, of course, mistakes get made, excesses happen. But they rebalance themselves.

Today, after Mark Fowler says...

The Chairman of FCC in the Reagan Era.

Who says, you know, a television is a toaster. It's just there for marketing. All that goes away.

Could a young Barry Diller make it today? A young Ted Turner? Could there be a new ESPN? A new CNN?

Almost impossible.


Ted Turner started with TBS, which was a rundown Atlanta television station that he got to Superstation status. But he was still a tiny, little player when he said, "You know, I've got this idea for a 24-hour news network." Of course everybody thought he was crazy. Everybody thought that it was hopeless. But he sold cable system after cable system on this idea. He got backing from a whole group of people to start what was then just a stand-alone. I mean, he didn't have very much more than that.

That can't happen today because if you knock on the door of these entities, they say, "Well, first of all, you know, it's not independent by definition 'cause we'll own it." There's no chance you can own it. That's gone now. If you've got a great idea, an idea will win out. It'll just be owned by one of the large and concentrated players. ... But what I do think is these five players who believe they are living in a justifiably unregulated universe should have enough regulation -- not that strangles them by any stretch -- to stop these absolute forces of complete vertical and horizontal integration.

Is this a change of heart for you? I mean, you've run huge companies. You run one now. If I remember correctly, when Disney bought ABC you said, "This is a great transaction."


What's different now?

Well, I think what's different now are a couple of things. The first thing that is different now is that I had hoped that the regulatory process would tightly follow consolidation and concentration. And ... that we would not be living in an area where it is considered antique and stupidly liberal to have regulations.

Laissez-faire. Let it all mix. If we had not gone and raised the caps on broadcasting on what any one person could own in broadcasting. If we had said in this Communications Act of '96 that we would actually impose real public service obligations on broadcasters and not tossed them out. Much of this consolidation would have (still) happened. But it would have allowed other voices to come in. It would have ... simply stopped complete vertical and horizontal development.

You mentioned the Telecommunications Act of 1996. The chairman of the FCC, the Federal Communications Commission, said at that time -- and he was a Democrat -- here's what he said: "The new law is intended to begin the era of genuine competition." And you say just the opposite has (happened) . . .

What happened is that instead of the competition that was supposed to get more voices and all of those things, this dangerous oligopoly reconstituted itself in ways that nobody thought would happen at the time. ... Five, ten years ago there were thousands and thousands of cable operators serving their local communities. Now, there are three big ones and three mid-size ones. And no one else essentially.

And the consequence is?

The consequences have to be that when you get that kind of size it has to restrain the ability of any new player. It gives them such buying power. It gives them such overwhelming power in the marketplace that everyone has to do essentially what they say.

The chairman of the Federal Communications Commission, Michael Powell, and others say, "Look, we have 500-plus channels. We have the satellite. We have the wide open internet that they are gonna know so well." I mean, these have radically changed the media landscape. Perhaps we have more diversity.

No, we don't. Because what we have is an absolute fact that five companies control 90 percent of all of it. It has been reconstituted. Instead of three channels that were controlled by a few people, there are now 500 controlled by a few people.

This doesn't relate to the internet, by the way. ... First of all, the internet is currently two dimensional -- meaning the internet is not broadband. It doesn't really have live, fast big pictures. And little pictures in a computer screen. Soon though the internet will have broadband capacity. And that, by the way, is a chance for another reconstitution. What I'm worried about is that unless you think about this now, broadband may be controlled by the cable business. Because cable modems are the way to get real fast connections today. ...

But isn't it also the case that these big oligopolies, as you call them, have so much access and power and influence over the very authorities that you say are supposed to be asking questions in the public interest?

Yes. Such is life.

Such is life but what do the rest of us do? What does the public do?

Well, I think what the public does is say, "We've gotta have through our representatives, we have got to have a voice in this. Some voice."

And you want the government to do that for you?

Yes, of course I want the government to do it. Who else is gonna do it for us?

Bill Moyers is host of the weekly newsmagazine program "Now with Bill Moyers" on PBS.

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