BILL MOYERS: 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.
BILL MOYERS: Why now? Why did you choose this moment to speak out on media conglomeration?
BARRY DILLER: Well, I don't know. Maybe because, you know, all the forces are, so to speak, gathered. What's happened is, is that this oligopoly that was attempted to be prevented by regulation over the last 30 years. You know? 30 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.
BILL MOYERS: Oligopoly. That's your word. I mean, that's a very strong word.
BARRY DILLER: Well, it certainly isn't an exaggeration.
BILL MOYERS: What do you mean by it?
BARRY DILLER: What I mean is, is that is that a very… a handful of companies are in charge of everything both vertically and horizontally that you get to see through a screen, a television screen not a computer screen. And I think… what I do think has to come along with that are rules and regulations that will make it so. That what we do not have in this country is a media and communications business that has no other voices in it. No air in it.
BILL MOYERS: Has that happened?
BARRY DILLER: Sure.
BILL MOYERS: I mean, you stated in your speech that ten years ago independent producers in Hollywood created 16 new television series. Last year, only one.
BARRY DILLER: Uh-huh.
BILL MOYERS: Is that the consequence of oligopoly?
BARRY DILLER: Sure it is.
BILL MOYERS: How so?
BARRY DILLER: Well, if you have… if, in fact, 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, in fact, 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 but, you know, less than a handful. What has caused that? What's caused that is the forces of consolidation and consolidation. And I am not saying that those forces are bad and that the results are evil. What am I saying is that with that I think comes the necessity to say, "Well, you can't own all your programs." Well, you can't own every voice there is to own.
There should be some restraints. And more importantly, what's happened to broadcasting is that broadcasting really used to be… it used to have a very clear public service quotient. And it's more or less now. And it's been lost. Now, you know, I mean, other things have been lost too. But this perfect balance which was fear. 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…
BILL MOYERS: The FCC… Chairman of FCC in the Reagan Era.
BARRY DILLER: In the '80s.
BILL MOYERS: Right.
BARRY DILLER: Who says, you know, a television is a toaster. It's just there for marketing. All that goes away. So…
BILL MOYERS: You sell a lot of toasters on television.
BARRY DILLER: Yeah, I do. I'm happy to continue to sell toasters. But, in fact, that's not what these mass engines of communication which are so vital. You know, they're so influential in everything. They have to have other aspects of responsibility and balance in order to do what they should be doing.
BILL MOYERS: Could a young Barry Diller make it today? A young Ted Turner? Could there be a new ESPN? A new CNN?
BARRY DILLER: Almost impossible.
BILL MOYERS: Why?
BARRY DILLER: Because, again, there is, you know, given the levels of concentration, if you're a new player, you have a new idea, you know? 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, you know, news network."
Of course everybody thought he was crazy. Everybody thought that it was hopeless. And, but what he did in individual sellings, 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 than that.
That can't happen today. It 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. You know? There's no chance you can own it. That's gone now. So as the stakes rise, you know, that becomes virtually impossible.
BILL MOYERS: Where does a young, bright upstart go with an idea?
BARRY DILLER: Somewhere else. You know, you don't, you know, look. In media and in entertainment and in certainly in journalism, I mean, if you've got a great idea, an idea will out. It'll just be owned by one of the large and concentrated players. I mean, that is…
BILL MOYERS: Five of them now.
BARRY DILLER: That is, it's reality. Yeah. So, and it's not that that's just altogether horrible thing. But what I do think is these five players who believe they are living in a justifiably unregulated universe should have enough regulation, enough regulation not that strangles them by any stretch to stop these absolute forces of complete vertical and horizontal integration.
BILL MOYERS: 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."
BARRY DILLER: Yeah.
BILL MOYERS: What's different now?
BARRY DILLER: Well, I think what's different now are a couple of things. The first thing that is different now is that the… I had hoped when I… that the regulatory process would tightly follow consolidation and concentration. And that, in fact, what would not happen is that we would not be living in an area where it is considered, you know, antique and, you know, stupidly liberal to have, you know, regulations, you know?
Laissez-faire. Let it all mix. Well, the fact is that unless… my feeling is that if regulation had kept with this. If, in fact, we had not gone and raised the caps on broadcasting on what any one person could own in broadcasting, if, in fact, we had said in this Communications Act of '96 that we would actually impose real public service obligations on broadcasters and not toss them out. I mean, much of this would… consolidation would have happened. But it would have allowed other voices to come in. It would have allowed… again, it would have just simply stopped complete vertical and horizontal development.
BILL MOYERS: 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."
BARRY DILLER: Yeah.
BILL MOYERS: And you say just the opposite has…
BARRY DILLER: Well, it was.... That what happened is, is that instead of the competition that was supposed to get more voices and all of those things, in fact, this, you know, I think dangerous oligopoly reconstituted itself in ways that nobody thought that thought would happen at the time.
And so what I think now is as the FCC is thinking about increased tossing more and more out. But instead they think about this issue for not only broadcast but the cable business which is now, you know, a cable business. One little…
BILL MOYERS: …dominating.
BARRY DILLER: …one little... You know? I don't know. Five, ten years ago there were thousands and thousands of cable operators, you know? Serving their local communities. Now, there are three big ones and three mid-size ones. And no one else essentially. So, and the…
BILL MOYERS: And the consequence is?
BARRY DILLER: Still, the consequences are in any completely concentrated area, the consequences have to be that when you get that kind of size that, in fact, 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, in fact, everyone has to do essentially what they say.
BILL MOYERS: 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.
BARRY DILLER: Yeah, yeah.
BILL MOYERS: Perhaps we have more diversity.
BARRY DILLER: 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 it being 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. You say, "Where do young people go?"
BILL MOYERS: Yeah.
BARRY DILLER: My opinion, young people go to the internet. To the internet distribution system right now, you put it up there and it's accessed by the world.
BILL MOYERS: But it's no competition for Fox, for CNN, for AOL.
BARRY DILLER: The internet sites?
BILL MOYERS: Yeah, the internet doesn't… can't compete with it in terms of scale.
BARRY DILLER: Well, no, no. The internet, again, the internet is… no. 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, in some years, 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 'cause broadband may, in fact, be controlled by the cable business. Because cable modems which is the way to get real fast connections today.
I mean, the most vibrant part of the growth is in cable. Well, certainly, what do they wanna do? They wanna be, if you can figure out how to be, to first create a toll bridge with them standing at one side of it and you having to pass through them. Now, okay. They own the pipe, so to speak.
But not okay to control it in the ways that current media is controlled. So my reason for being thoughtful about this now, and really it's to be thoughtful. It's to say, "Wait." Not full-stop, but wait. Let's, before we toss things, let's think about the media landscape that exists today. Much less is going to exist tomorrow when more consolidation is, of course, probably inevitable.
So let's think about that. Let's say what's appropriate? Is it appropriate for you to control 100 percent of the programming that passes through you? Is it appropriate for you to be able to block programming that passes through you if it's on economic terms only? Not on editorial terms, so to speak.
I mean, those are the kinds of things that one would think that appropriate authorities should do. The problem today is almost no one is paying attention to this.
BILL MOYERS: 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?
BARRY DILLER: Yes. Such is life.
BILL MOYERS: Such is life but what do the rest of us do? What does the public do?
BARRY DILLER: 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.
BILL MOYERS: And you want the government to do that for you?
BARRY DILLER: I want the authorities to do it. Yes, of course I want the government to do it. Who else is gonna do it for us? I mean…
BILL MOYERS: To tell you that you can't own but so much, Barry Diller.
BARRY DILLER: Well, you can't own so much. I mean, the issue here is distribution, it's the ownership of the pipes, you know, that is at issues here. It's the ownership of, so to speak, the broadcast pipes that are concentrated. Or, it's the ownership of the cable pipes. Or it's the ownership of the satellite pipes.
And that ownership, the one that allows pictures and words to go two ways therein is the area. Now here's the issue. Do you own all the programming? Is there any way to get on, other than through the Wizard of Oz? You know, in a corner someplace. Is there any access?
BILL MOYERS: To be one of the most successful media entrepreneurs of our time, you talk like a Neanderthal. I mean, regulation? A role for government? I mean, this is the age of free markets. This is the age of…
BARRY DILLER: Well…
BILL MOYERS: Laissez-faire.
BARRY DILLER: Yeah, I recognize that. But I also recognize that, you know, to its ultimate conclusion, it's a bad thing. It's also not a new note for me. I have felt this. I felt it about broadcasting. Because I grew up in broadcasting. I grew up…
BILL MOYERS: I remember an essay you wrote in THE NEW YORK TIMES, an op-ed piece, I think 1995?
BARRY DILLER: Yeah.
BILL MOYERS: In which you called for this sort of thing.
BARRY DILLER: I did.
BILL MOYERS: For this kind of regulation. This is before the Telecommunications Act was passed. They didn't listen to you.
BARRY DILLER: Not even close.
BILL MOYERS: Do you think they'll listen to you again? In a few weeks, the FCC will vote on removing the last rules against media concentration. The industry wants to remove the rules that limit the number of television stations in the same market that can be owned by a broadcaster. They wanna eliminate the rules that also restrict a single company from owning television stations that reach more than 35 percent of the national audience. What are the implications? What's at stake in this?
BARRY DILLER: If again, they are further loosened, then in fact the forces that I've talked about, notch one step towards absolutism. So, I'm against them going further.
I actually think that what they should do is take and look at those rules. And to the extent they have oversight over cable and satellite, they should think about applications of rules for broadcasters to cable and satellite. The reason being, that cable and satellite now make up 50 percent of what people see and hear. So, I think that it is a valid and more full-throated, so to speak, discussion that I am after on this topic. And I think that that can only be healthy.
BILL MOYERS: Should the FCC put off this decision that is now scheduled to take place on June second until there is more public hearing? More voices heard? More debate?
BARRY DILLER: Yeah. For sure. Certainly.
BILL MOYERS: Barry Diller, thank you very much.
BARRY DILLER: Happy to be here.