Diller: Death Will Come For 'Irrelevant Media'
ORLANDO, Fla. -- Barry Diller has good news and bad news for newspapers, and local TV should listen, too.
First the bad news: Their name. "The problem is calling them newspapers," Diller told attendees of the Newspaper Association of America's mediaXchange on Tuesday, suggesting that the "paper" side may have gone past its expiration date.
The good news is that newspapers still have prospects. "All of you have more audience now than you ever did," Diller, chairman and senior executive of InterActiveCorp, said in an interview with Katharine Weymouth, CEO of The Washington Post. But now is the time, he stressed, to get more granular than newspapers have ever done before, saying the same holds true for local television websites.
Diller said he's surprised that more newspaper and television sites don't capitalize on their "ability to be so granular and local that you are every possible grain to anyone who lives in a defined community."
Asked by Weymouth to predict the survival odds for such storied media brands as The New York Times and her own Post in a massively disruptive age, Diller said only those companies that are "sleepy" and behaving like "recovering alcoholics" as ads sales continue to drop off will face extinction.
"I see the death of irrelevant media," he said.
But those companies that are alert and willing to spend on innovation will be fine, he offered.
"There were moments when you didn't have to do very much," he said. "Everybody would come to you and there was no alternative."
Now, however, Diller said newspapers need to drill down to the core of what their product really is to find their way back.
Diller had praise for Warren Buffett's investment in the industry and his approach to executing strategy there. "I think he's done a very savvy thing," he said. "He has decided if you scale a newspaper to local and you have appropriate costs to a local product you'll be fine."
He added that Buffett's instincts "override anybody else's opinion about anything."
In a wide-ranging talk, Diller offered his take on everything from social media ("a princess phone by another name") to Jeff Zucker (the first executive at CNN in years "who actually knows what he's doing").
Unsurprisingly, he made his own disruptor's pitch for Aereo, the TV rebroadcasting platform which has made him the bane of the broadcast and cable world of late.
Diller downplayed a recent legal victory in a federal appellate court in New York that found the service’s streams of TV shows did not constitute public performances in the scheme of Aereo's larger fight. "It doesn't mean that we've won, but it means we haven't lost," he said.
He also downplayed News Corp.’s Fox network's recent threats of retrenching as a paid network in the face of Aereo's threat. "That's a lot of noise," he said, noting that he suspects the network threw down that particular gauntlet to pressure Congress to change copyright laws.
He was more generous in his assessment of the prospect of a Fox sports channel to rival ESPN. When Rupert Murdoch had $500 million on the line to launch Fox News, everyone told him that the world already had a CNN, Diller said, and the world now knows how that gamble turned out.
A new sports network could work by the same logic that saw Fox News soaring while the comparatively uninventive Fox Business Channel has remained grounded in the ratings. "You don't want the same thing repeated. You want an alternative to it," he said, noting that Fox has a "pretty good" record in the alternative department.
Complacency and success are incompatible in modern media, he stressed, especially in sussing out revenue.
"Once the brick is thrown, then you have to develop new revenue streams," he said. "You have no choice. It is that concentration of innovation that will produce new revenue streams."
Asked by Weymouth about his paywall views, Diller conceded that even a disrupter such as his own Daily Beast will ultimately have to find new revenue streams or die. And he lamented that he ever invested in Newsweek, whose "week"-ended name doomed it.
Also doomed, he opined, was AOL's hyperlocal Patch effort, which "doesn't make any sense."
He views other pureplays, such as about.com, which he purchased from The New York Times last August, as having a stronger model. Having seen the site's fortunes already dramatically reversing since taking the reins, Diller said prospects are strong that serious revenue can be extracted from its search-related content.
And he cautioned that all of these moves are happening on the precipice of a major generational shift with the intersection of the media and rapidly advancing technology.
"We are at the very end of the first generation … not yet in the second generation," he said. "That's why I'm optimistic."