The entertainment business is going to experience a period of “profound dislocation” soon, says media mogul Barry Diller.
The IAC chairman, speaking Thursday at a keynote session at the CES conference in Las Vegas, spoke bluntly about the change that the entertainment industry is experiencing as new entrants like Netflix and Amazon have changed distribution by bringing shows and movies directly to consumers.
“The media world has been closed since radio,” he said, speaking to moderator Michael Kassan, the CEO of consultancy MediaLink. But the internet has changed that dynamic, removing the ability to create scarcity and giving control to consumers. “Until there was an alternative like the internet … there was only one way to buy programming. It doesn’t take more than a semi-imbecile [to realize] that once you have the opportunity, you’re going to pick what you want.”
Diller, who served as CEO of Paramount for 10 years, also spoke about the changes in the movie business. “Movie companies rarely make a lot of money,” he noted. “They have, in the past, been part of the guardianship of all the other downstream models.”
The exec continued: “The movie business is no longer the hit movie business. It’s now a horrible thing called a tentpole business. The business formation is now huge blockbuster movies that have to do $500 million to break even.”
Diller, who currently serves as chairman of Expedia, got his start in the William Morris Agency mail room before establishing himself as an entertainment executive at Paramount and, later, Fox, where he made a failed bid for Paramount. Today, his IAC owns Vimeo, Electus and Match Group.
Diller believes that the future of content will be an a la carte model where consumers pick what they want to watch. “It’ll either be curated or you’re going to curate it yourself,” he said. “You will decide: I like Netflix, I want Amazon, I want ESPN. Why would you let anyone warehouse for you if you can individually choose?”
