IAC’s Diller Says Media Industry Has Too Few Decision Makers

  • Creativity suffers under few owners, former studio chief says
  • Recent deals have made sense, CBS CEO Les Moonves counters

Tie-ups in the media industry have limited independent production and threaten creativity, though that may be changing with the growing popularity of online entertainment, according to IAC/InterActiveCorp Chairman Barry Diller, who has led several Hollywood studios.

Barry Diller arrives at the Allen & Co. media conference.

Photographer: David Paul Morris/Bloomberg

Diller, in Sun Valley, Idaho, for the annual Allen & Co. media conference, told reporters Wednesday he expects more mergers in the cable industry and the number of major movie studios to contract to fewer than six.

“You have so much more consolidation and so few actual decision makers,” said Diller, whose long career in entertainment has included stints at ABC, Universal Pictures, Fox and Paramount. “That’s not so good.”

The growing number of internet-based video services, including IAC’s Vimeo, is allowing content creators to bypass traditional distributors, Diller said. The U.S. paid video market has grown to $100 billion, and Vimeo, which specializes in independent videos and documentaries, is seeking a larger share. The service has more than 280 million monthly users and about 710,000 paid subscribers.

“You’ve got essentially more buyers than you’ve ever had,” Diller said, referring to the TV networks and online outlets that are acquiring video programming. Newer services “will allow creators for the first time to not be dominated by distributors, an all-together healthy condition,” he said.

Unlikely Buyers

Asked if the internet giants might be potential suitors in the media industry, Diller said he didn’t think so, and that such purchases would be “at their peril, actually.”

Les Moonves, chief executive officer of CBS Corp., said recent media deals have made strategic sense for buyers and sellers, citing Comcast Corp.’s purchase of DreamWorks Animation SKG Inc. and the pending acquisition of the Starz premium cable networks by Lions Gate Entertainment Corp.

Les Moonves arrives at the Allen & Co. media conference.

Photographer: David Paul Morris/Bloomberg

Moonves declined to comment on speculation CBS might reunite with Viacom Inc., where controlling shareholder Sumner Redstone is trying to oust management. Redstone also holds a controlling interest in CBS.

“Right now we’re happy with our assets,” Moonves said in an interview.

Buying Studios

Ron Meyer, who led Universal Studios for 18 years and continues as vice chairman of Comcast’s NBCUniversal, was skeptical that buying a major Hollywood studio would be a sound growth strategy.

“Acquiring studios isn’t easy,” he said in an interview. “We wanted to grow in animation so DreamWorks was a perfect fit for us.”

Diller arrived at the summit alongside his wife, designer Diane von Furstenberg. Others who came to hear early presentations included Facebook Inc.’s Chief Operating Officer Sheryl Sandberg, 21st Century Fox Inc. CEO James Murdoch, his brother Lachlan Murdoch, co-executive chairman of Fox; Viacom Inc. Vice Chairman Shari Redstone, Apple Inc. CEO Tim Cook and Walt Disney Co. CEO Bob Iger.

Following a morning talk by Canadian Prime Minister Justin Trudeau, many attendees and their families, including Sandberg, went on a rafting trip.

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