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At a conference call to discuss IAC’s second quarter financials, chairman Barry Diller says he’s recognized that the “world has changed” when it comes to media and expressed hopes that others in the industry would come to the same conclusion.
Addressing a recent decision by a New York judge to deny an injunction to shut down Aereo, the TV-streaming service that gained large financial backing by Diller, the media mogul said that this was only the first hurdle in a long process, but added that he hoped the plaintiffs in the case would “at some point actually affirm the basic right to receive over-the-air broadcast signals free without any middleman essentially co-opting the process.”
Diller continued by saying that he understood that retransmission consent has provided extra revenue to broadcasters, but nevertheless said the future would be different.
“Broadcasters ought to cheer us because we are essentially adding audience,” he said.
Earlier today, IAC announced its second quarter financials, which included a 40 percent growth of its revenue to $680.6 million. The results surpassed Wall Street analyst expectations and investors also liked the announcement that the company would be doubling its dividend to 24 cents a share.
In early trading, the company’s stock price has risen sharply, up more than six percent to over $51 a share.
Investors don’t seem to mind the $18.6 million pre-tax charge that IAC announced to take on a majority stake in Newsweek Daily Beast.
The conference call was largely devoted to IAC’s strong quarter that was buttressed by excellent growth in its paid search engine and online dating websites. But Diller also took a moment to address new realities about how the media world is changing within the company’s own divisions.
In particular, Diller was asked to address the future of Newsweek Daily Beast, which IAC now firmly controls after the family of the late stereo mogul Sidney Harman said it would no longer invest in the newsmagazine and website.
Diller hinted that the time could be near where Newsweek becomes a web-only publication. He said that Newsweek is a stronger brand at the moment than it was when IAC acquired it in 2010, crediting editor Tina Brown and her staff for the improvements, but also said that IAC’s investment next year will be “considerably less” than it is this year.
“The brand is good,” he said. “What is the problem? The problem is manufacturing and producing a weekly newsmagazine. That’s going to have to be solved. Advertising in this category is entirely elective. The transition will happen. I’m not saying it will happen totally. But the transition to online from hard print will take place. We’re examining all of our options. Our plan is that by September, October and certainly … (we’ll) firmly have a plan in place for next year. It’s going be different than it is this year. I can’t tell you in what ways it’s going to be different. But it will be different.”
E-mail: email@example.com; Twitter: @eriqgardner
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