Transcript
Byers Market
IAC and Expedia Group’s Barry Diller
Dylan Byers: Hey, it's Dylan Byers, senior media reporter for NBC News. You're listening to Byers Market. (MUSIC) Barry Diller is a titan. A media mogul, a Hollywood legend. The guy whose yacht you probably wanna be on. But more importantly, he's a thinker. He's a man of ideas. He has opinions and he shares them, because after almost 60 years in this business, he's entitled to them. And he's not beholden to anyone.
Barry got his start in the William Morris mailroom three weeks after dropping out of UCLA. He went on to become the chairman and CEO of Paramount, then Fox, where he launched the Fox Network. And then USA Networks. After that, Barry launched his current act, IAC/InterActive Corp, where he has a portfolio of companies that span media, technology, news, online dating. Oh, and by the way, he's also got Expedia, one of the leading travel websites in the world.
But one doesn't seek out Barry to talk about the past. One seeks out Barry to talk about the future, because he's got a really keen eye for where all of this, Hollywood, Silicon Valley, media, technology, where all of this is going. In this conversation with Barry, we discuss the soon to be launched mobile streaming service Quibi.
A disclosure. NBC Universal is a minority investor in Quibi, and NBC News is producing a daily news show for the platform. When I caught up with Barry, it was actually just a few days after the Oscars, which he had a few thoughts on. So without further ado, my conversation with Barry Diller.
Barry Diller: The Academy Awards are often-- they are either spot-- (LAUGHTER) which makes them nothing. They are either spot on or completely weird.
Byers: Yes.
Diller: And most people thought 1917 was gonna have it, 'cause it the was kind of most revered film. What was the thinking of the Academy in rejecting it-- both for director and for film to Bong, I don't know what's in back of that or in front of it. I don't think anything thematic.
Byers: Don't you feel like it's long overdue? I mean I think about all the incredible non-English language films that probably could have won best picture any number of years--
Diller: Well, yes, but if you look at the films who've won best picture, I mean I'm not gonna riff off on the ones that are utterly ridiculous--
Byers: Right.
Diller: --in retrospect where you think, "They did that?" So I don't think it's an indication, certainly not an indication of everlasting excellence in film.
Byers: To me, the greatest takeaway, and the thing that my colleagues always wanna talk about, is the number that comes out the day after, which is how many people watched. And it seems to me like the amount of people, I think it's down to 23.6 million.
I think in a decade it's lost something like 47%. My guess, as a guy who owns a nice portfolio of businesses, is that if one of your portfolio companies came to you and said, "We've had 47% loss in subscribers over the last decade," that you would probably offload that company as fast as possible. Do you worry about this sort of, like, waning interest in--
Diller: Popular culture?
Byers: Yeah.
Diller: Well, I don't think there is waning interest. I think there's just so much of it. You know, we have to remember that the Academy Awards/motion picture business basically grew up both pre-radio, then post-radio, with talking pictures in the '30s.
When that was it. There was no television. '50s come along, television took a huge slice out of that movie business. Has never really recovered from that. But why would it, when, you know, choice brings obviously options, and those options chop up-- previous majorities.
So the fact that every year it goes down means that-- to me, it is that there are not only many more options, but also the motion picture business is no longer our cultural template. And yet, this year, you know, surprised me in making movies that-- you know, I've really come to believe there was no movie business left, really.
In the worlds I understood it. And the worlds understood it was that a movie company developed projects based upon what interested them. And they had anytime 100 to 200 pictures in various stages of development. Then every year they'd make 15, maybe 18 pictures, which was the kinda average. There was no such thing as sequels, templates, tent poles. That--
Byers: Right. Prequel--
Diller: Yeah.
Byers: --remakes. All that.
Diller: That is only the last 20 or so years. And that has totally changed the movie business. It is no longer this business of development of books or ideas that you got interested in. It is much more marketing-based and big, big, big picture-based.
Byers: I find that so disheartening, 'cause--
Diller: Well--
Byers: --in my--
Diller: I don't think so, because look, what's replaced it as the creative, basically template is streaming and cable replaced it, basically. So you're seeing now so much work, and really a lot of really interesting work, in that arena. And you're seeing one off films being made directly for that, not for theaters. 'Cause the theater experience, for sure, a big 3D epic on the big screen, fine for theaters. You know, you notice that very few comedies are made. Comedies are what filled theaters, 'cause the communal experience allowed them--
Byers: Yeah. And comedies feel strange (UNINTEL).
Diller: --was kind of necessary and when you're watchin' it all alone, you don't have a lot of advisors telling you when something is funny. Or just not telling you. Just by their actions they're joining with you in what's funny.
Byers: So why are comedies harder to make now?
Diller: It's just the there's less of an audience for them. And also, you know, they're not thought of, you know, there's no cutting edge. I mean there's no Preston Sturgess, who was a wonderful movie maker of the (SIGH) '30s, '40s. I think probably that was the 20 year span. Or Frank Capra.
Byers: Right.
Diller: So there were some attempts at it, but, you know, mostly it's Honeymoon In Vegas or--
Byers: Right.
Diller: --you know, kinda gross comedy.
Byers: So I think the thing with the-- obviously you can get movies, TV shows, all the content you want across more streaming services than ever. And if you want the big tent poles and the sequels and whatever, you can go to the theater. I think the thing I worry about, and the reason that I bring up the issue of the waning interest in the Oscars is-- maybe this isn't a bad thing, but it seems to me like there is sort of a loss of a common-- I don't know. Like a common narrative or a shared narrative. And that perhaps when you were at Paramount, say you made a film at Paramount, and everybody sort of cared--
Diller: And you (UNINTEL)--
Byers: --or you--
Diller: --first of all, the kinda (UNINTEL) enormous amount of choices you have now, on all different areas. Gaming. Video. Concerts. You know, it used to be there weren't that many concert tours a year. Now, every week there's something going on--
Byers: Right.
Diller: --for you to go out and see. So there's endless amount of choices. And how could you say it's a bad thing, in a sense, unless you want kind of one voice. We had three networks. Then we had four. We had three networks for 50 years. And so the fact that you now have this amount of choice, rather than everybody gathering around, the whole concept of gathering around the television set on a Sunday night with your family. I mean just not possible.
Byers: Yeah, and I do think there's this false sense of nostalgia that some people have for a sort of, you know, more archaic time when there were fewer choices. But I will say this, and maybe it's just because I cover the industry. I do sometimes feel overwhelmed by the vast amount of content.
You know, it's, like, Netflix is investing $18 billion in original content, and then there's Disney Plus and there's HBO Max and there's Apple TV Plus. Which is great. I just don't know. Sometimes I go on, and I just feel like, you know, you have to sift through this vast amount of--
Diller: But it isn't, though. There's a vast amount of (UNINTEL)--
Byers: What do you watch?
Diller: There's not a vast amount. But there's an enormously greater amount--
Byers: What do you like--
Diller: --of diversity and things to watch than ever before. Now, there's still, however, a relatively small talent pool.
Byers: Yeah, right--
Diller: And so the expansion of that talent pool, the pressure on that talent pool, given the amount of dollars that are now flowing into it, the task-- productions of every stripe and color. You know, it's not a surprise that there's a lot of stuff, but there's also a lot of really good things.
Byers: Right.
Diller: What do I watch?
Byers: Yeah, what do you watch?
Diller: I watched a wonderful doc the other night, which one the Academy Award, called American--
Byers: Factory?
Diller: --Factory.
Byers: Good?
Diller: Superb.
Byers: And that was the Obamas' first sort of foray into--
Diller: I didn't even know they had anything to do with it. I don't know what they had to do with it, but it was--
Byers: I think--
Diller: --really good work.
Byers: Yeah.
Diller: And what else have I liked? Cheer is fascinating. Another doc. Yes, you laugh, because everybody smiles. Cheer. There's a new Harlan Cobin on Netflix that I started watching. It's a little hard to get into and little typically "Let's hide every fact so that you'll stay tuned till we get to reveal some of them." But I don't know. You know, it's all pretty good.
Byers: Yeah.
Diller: The amazing thing is how I, and I think a great many people, simply don't watch linear television anymore. You know? I don't think I've watched a broadcast network in years.
Byers: Why would you? I mean unless you wanted--
Diller: No, and--
Byers: --sports.
Diller: --the thing is, though, yeah, live and stuff. But the thing is is that some of the programs that they are doing are really good, and yet, they get no attention. They get not interest from almost anybody. They're kinda here and gone.
Byers: Is that a marketing--
Diller: I mean I remember--
Byers: --failure?
Diller: --the last thing I watched was The Good Wife, which I thought was spectacular work.
Byers: Is that a marketing failure? Is it growing intolerance for commercials? Is it just a sense that (UNINTEL)--
Diller: I think these broadcast networks don't matter anymore. Except maybe for CBS to CBS. 'Cause it's such a much smaller company. But the other two are, you know, owned by very large companies with very diversified, you know, assets and things. And I just think it's inattention.
Byers: So how much longer does linear television get to exist?
Diller: Well, like, you know, these things don't-- everybody says that there's this replacement. There isn't a replacement. What there is is a segmentation, which is they just go lower down in the minds and interests of mass people. And they don't talk about them very much. But broadcast television, linear television, cable television, I mean it's getting squeezed, and it loses its numerical numbers. But there's still an awful lotta people who actually watch it.
Byers: Right.
Diller: And will probably continue to, in some ways. I mean I thought recently, you know, about broadcast television, that increasingly-- because if you have resources, you really don't want to watch commercials. So you'll pay. And what that means is is that the broadcast audience is basically advertising to people who can't afford their products. So--
Byers: Right.
Diller: --(SIGH) what the per unit prices just keep rising to basically cover the, you know, difference--
Byers: How does that--
Diller: --in audience.
Byers: Yeah, and how does this work, that somehow fewer and fewer people are watching, but you have to spend more and more as an advertiser?
Diller: What do you mean how does it work? It (UNINTEL).
Byers: It seems to me, like, if I were an advertiser, at a certain point I would just be like, "You know what? No."
Diller: Well, what advertisers are doing, obviously, is they're increasing their amount of money that they spend on, let's call it non-broadcast media. It used to be, for instance, that just in the movie business, there's always a big advertiser. I mean not as big as the car industry, whatever, but movie advertising, a large segment of broadcast television. The savvy people in movie (CLUNKING) advertising, particularly companies like (UNINTEL) are so good as A24 as a distributor. 95% of their advertising spend goes into digital. They don't buy spots anymore.
Byers: Right.
Diller: That shift is gonna continue to happen.
Byers: Yeah, just from the outside it feels like a sucker's game. But the thing I worry about, you know, let's say you're a company like Disney, and in the last quarter they reported that ESPN, for instance, cable subscribers went down by 4.5%. That seems to me to be a pretty significant loss. There's a time when ESPN had more than 100 million subscribers. Now I think it's trending toward under 80 million.
Diller: It's still, by the way, wildly profitable.
Byers: Right. But I guess just that trend line, even if you look at--
Diller: Yes, it's going to continue. Look, the management at Disney got very angry with me five years or so ago when at a Sun Valley conference thing. I was on stage babbling (HONKING) around, (LAUGHTER) and I said, "Why would 6.8% of the actual viewing," which is how much viewing takes place on ESPN, "pay 100% of this huge income and don't watch ESPN?"
And (LAUGH) I think it was Mr. Iger got up and said, "No, that's not true. Our audience is greater than that, with all of the other places that people watch." And I said, "Well, I don't know. Seems like 94% of your audience is subsidizing what they don't see. And eventually when there are alternatives to that, that's gonna end."
Byers: Right.
Diller: Not that I was so prescient, but of course when people had a alternative to the warehousing of cable, this giant warehouse of all this stuff. And they say, "Well, I don't watch most of that stuff. Why am I (MUSIC) bothering with it?"
Byers: Right.
Diller: They'll go off it and go onto Netflix or go onto other things.
Byers: We'll continue our conversation with Barry after this short break. (MUSIC)
Byers: (MUSIC) Correct me if I'm wrong. You've always been quite bullish on Netflix.
Diller: Since the very beginning.
Byers: Since the very beginning. Has that calculation changed for you now that you've seen Disney Plus launch.
Diller: Calculation in what way?
Byers: Just that, I mean look, what Netflix's critics would say is that one Disney makes a run on streaming--
Diller: (UNINTEL) on the others.
Byers: --once HBO Max, once Peacock, once they all make a run on streaming, Netflix is the sort of replacement for television. Becomes--
Diller: It's not the replacement for television, but it has a lead. Look, all of these companies were, as often happens, late to a game they didn't know or understand, and somewhat snuck up on them. And it snuck up as they were kind of filling their little bags with some dollars from Netflix for their own programming.
Which was thought of as, "Oh, found revenue." And it was. It didn't exist before Netflix. And then of course they realized, "Well, you know, the eventual demand for our product, if it's all gonna be a Netflix, Netflix is gonna have such market power that they'll decrease our prices, so we have to get into it."
So they're all playing various forms of catch up. And Disney, I think having done a magnificent job in putting so much on the table, and being such great marketers, and so aggressive and clever about getting subscribers at relatively low return. I mean their individual, you know, their per subscriber, if you average it out, is--
Byers: Pennies, right?
Diller: Very little.
Byers: Yeah.
Diller: But their strategy is, "We'll just get the most we can while we can, and then we'll raise prices." And I'm sure that they will. And I don't know in the end, I can't money it out as to when the line crosses from their investment to the profitability and then as against the revenue they've lost in the meantime, et cetera, et cetera. But theirs, it's an approach which is very, very much macro to an industry they plan to play in for the next thousand years or whatever.
Byers: Right.
Diller: And so I think they've done a great job at it. Now, I don't think it's gonna remove the hegemony of Netflix, or deter it much, 'cause Netflix is so ahead. And once you're that far ahead and after you spend that much money on programming, that dwarfs everybody else, you're still subject to the vagaries of the creative process, but you'll probably tend to get it, at least on the averages, an inch more right.
So I don't see it being displaced, but I think it's gonna be a lot of different surfaces. They'll have a different investment and profits profile, and business plan. Amazon's business plan has nothing to do, basically, with how many people watch the entertainment stuff they do.
Byers: Yeah, their business is shopping.
Diller: Their business is--
Byers: Yes. Home delivery--
Diller: --getting people to buy things on Amazon and wanna join Prime. So which is if you're in the entertainment business, and your history basically is, "Okay, how many people are sitting," standing, whatever, but in other words how many seats are you filling? And how much that individual person is paying that is getting to you?
I mean that has been true, you know, since the beginning of motion pictures with nickelodeons. How do you compete with a business model that says, "I don't care how many people are in the seats. I can still outspend you for programming, not because of its popularity, but because of how many subscriptions it drives to Prime."
Byers: Right.
Diller: That's like, "Oh my God."
Byers: So who in these so called streaming wars, which I know is a complicated name for what's going on, but who gets to have a seat at the table in five to ten years? And who doesn't?
Diller: I don't know. Well, certainly the incumbents. Netflix, Prime, Apple to the degree, just 'cause it's such a huge, closed circle of audience. To the degree it chooses to play, which is thus fair fairly minimal. But definitely incumbents aren't going anywhere.
And Disney will be successful. I don't think it won't be. AT&T, HBO, Warner, I don't think they're gonna go outta business, but HBO, hindsight is lovely, but HBO was of course the one that should have been out there from the very first competing with Netflix.
Byers: Yes.
Diller: But the management of HBO at Time Warner, this is the trouble with conglomerates to me, said, "Just give us the profits. We're not interested in your strategies." So HBO was making a couple of billion dollars a year. And Time Warner wanted every dollar of it, and wasn't much interested in what HBO's destiny could or should be. So they basically gave it to Netflix. Now they're trying to reform HBO into being HBO Plus Plus Plus, i.e. competitor to Netflix. I'm not saying it's not possible, but it's awfully hard to do.
Byers: So I want to take a quick detour here, because you know a lot of people in the sort of what I would call the Hollywood talent community. And sometimes--
Diller: Yes.
Byers: --one thing I wonder about, look, at the end of the day, this is a business, and some people think, you know, people get too sort of-- they wax too poetic about the sort of prestige of HBO and whatnot. But sometimes I think about it. It's, like, (CLICKING) if you were a really talented, in-demand actor/actress/director/producer whatever, and you've got a lotta money.
And you've got all these different services to choose from, it seemed to me that there was a case to be made that if you kept HBO as this incredibly prestigious brand that was only known for quality content, and not mixed in with all the other crap that exists at--
Diller: Yeah, you wouldn't have--
Byers: --Warner.
Diller: --200 to 300 million audience, but you'd have an incredibly profitable--
Byers: It seems to me that for the creative community in this town, that that could (COUGH) have been the edge by which you said, "You know? I could take this to Netflix or--"
Diller: People (UNINTEL)--
Byers: --"I could take it to HBO--"
Diller: --are actually still doing it. I mean people are making those choices. Those qualitative choices. But they are changing, because the change of management at HBO is such that way of dealing basically was replaced.
Byers: Right.
Diller: So people are probably making that choice less now.
Byers: And if you wanna just do anything you want, you wanna be sort of left alone--
Diller: Well, a lot of--
Byers: --and just (UNINTEL)--
Diller: --that-- and (UNINTEL) here I am. A lot of that choice-- not a lot of it, but some of that choice is now going to Apple.
Byers: That's what I thought. And yet, Apple's whole roll out seems to me, for a company that was so successful when it used to roll out new iPhones, their sort of entry into Hollywood seemed to me to have been quite bungled. I mean in--
Diller: I don't know. How can you say it's bungled? It hasn't started yet. I mean that's--
Byers: But that's exactly it. It seems like such a slow start. In the past, Apple would come, when they were dealing with just pure hardware--
Diller: Yes, but their hardware--
Byers: --Apple (UNINTEL) with fully fledged ideas.
Diller: But that's a world business of vital importance to them. This isn't. This is, you know, playing tiddly winks to everybody else. They're still not in it with both feet.
Byers: But don't you think when Tim Cook and--
Byers: --were sitting at the table at the Golden Globes or whatever, that they sort of wished that they had--
Diller: That they Fleabag?
Byers: Yeah. I mean look, it's a company that has a track record of world changing successful moves and innovations. And it just seems to me, like, the way that they've sort of--
Diller: They are a product manufacturing hardware company. Doesn't mean that they don't and haven't, since Steve Jobs, revolutionized basically music with his 99 cent music iTunes business. But that and their own soft services businesses, and particularly in programming, I mean, you know, they have a fluency for hardware that is extraordinary.
I mean they keep improving their products and honing them and making them. You know, the iPods are the most recent to me incarnation of manufacturing hardware genius. So they know that. They don't know this area. This is not something they've ever done. Making programming?
So they've hired what they think, I'm not disputing it at all, a couple of very bright people to run it for them. They've put some capital in, but relatively little. They're not making a major effort. So why should you be disappointed that they're not making (MUSIC) a major marketing effort? They haven't decided yet, clearly.
Byers: Stay with us. We'll be right back. (MUSIC)
Byers: (UNINTEL) I wanna talk about another forthcoming entry into the streaming services, and this one is someone who is known as one of the many killer Dillers. One of your progeny, which is--
Diller: Oh God.
Byers: --Quibi.
Diller: Yeah, yeah.
Byers: Quibi. So you and I, it's February right now. Quibi, which everyone listening to this podcast will know, Jeffrey Katzenberg's bet that people will want to watch premium content on their phones, less than ten minutes long. And it's gonna launch in April. Are you bullish? Are you bearish?
Diller: I'll tell you what I am. I'm admiring of the bet, 'cause it's a total speculation. And it's a total speculation that's being backed by, you know, a considerable amount. And it's being promoted. You talk about the lack of Apple promotion towards its service. The one thing you will never be able to say is they didn't try their hardest and put everything on the line. They're spending a huge amount of money. If you watch the Academy Awards, I think they had six spots.
Byers: Right.
Diller: I think they were in the Super Bowl too.
Byers: Yeah.
Diller: So they're putting everything on the line. With this very clear concept of premium content less than ten minutes. Now, you know, the speculation or skepticism, of course, is premium content? How much difference is there between premium content and a cat on the chandelier twirling around?
Now, of course there's a lot, but does that really matter to the audience? Look at TikTok. Which people are (CLICKING) watching enormous amounts of, probably not more than, I don't know how much, ten minutes at a time or less.
Again, I don't know that you could define the category that narrowly, but they're going after this concept blazing. Hiring as many talented people as they can. Promoting it like crazy. Will a sufficiently large size audience say, "Okay, I want that?" Is a giant speculation.
Byers: So it's been about a year now since I interviewed Jeffrey and Meg Woodman at South by Southwest. And everyone since before then until now who I talk to in Hollywood will give me a list of ten reasons why they don't believe it will work. And then the last thing they'll say, and so much so that on stage there Jeffrey called me a doubting mother (BEEPING). And then the last thing they'll say is-- but that's against Jeffrey Katzenberg. And I guess (LAUGH) what I'm feeling is two months out, I see a service which I don't recognize what demand it is satisfy. So--
Diller: Well, I said, it's a very clear proposition for a demand that has not been demonstrated, except that people watch YouTube. They watch TikTok.
Byers: Right.
Diller: They watch Instagram. I use this word watch advisedly. So you, you know, it is a giant, and gutsy speculation. And nobody's gonna know until the counts come in.
Byers: Yeah. And I feel finally ready to bet against it.
Diller: And mostly most people when they hear it aren't overwhelmed by the idea. Which makes it all the gutsier. Now, by the way, the fact that ten out of ten or nine out of ten people say it won't work gives me hope for it.
Byers: Right. Because you feel that Jeffrey will fight all them (UNINTEL). (LAUGH)
Diller: No, because I think they don't know anything.
Byers: People don't know anything?
Diller: No.q
Byers: Yeah.
Diller: So I mean--
Diller: --I've never--
Byers: --talk to you.
Diller: Look, when we started the fourth network, I promise, you--
Byers: --Fox.
Diller: Fox. Eleven out of ten people said it wouldn't work.
Byers: Right.
Diller: But nevertheless--
Byers: Yes.
Diller: You know, and Jeffrey is not shy. And the thing that I'm very admiring of, whatever happens, is he's so naked out there with this. You know? He's just standing there truly waiting for the tide to either come towards him or leave him naked on the beach.
Byers: And so that's interesting to me, because it feels like there's a lot at stake here for him. It feels to me like he's called in every chit the the has. That he has-- He really he's-- He has worked his ass off to raise as much--
Diller: Of course he does--
Byers: --money as he possibly can.
Diller: Yes.
Byers: I'm not even sure they have enough money to make it through the year. And it does sorta seem to me that if the thing blows up, and if after six months people decide that they don't really done to--
Diller: They are not subscribing.
Byers: Year not subscribing. They didn't actually need to be able to watch horizontal content vertically. They didn't need to watch, you know, Justin Bieber, Justin Timberlake for six missile at a time. That he will then go back to Sun Valley, and that will be a hard trip for m.
Diller: Here is the thing that of course nobody knows. And this is his hope. It's his great hope. Which is in there in the I don't know how many individual pieces of programming they're offering, in there is gonna be a giant hit. In there is gonna be something that people say, "Oh my god. I gotta see it."
Byers: Right. By the way, I take great solace in this, which is that for all of the so called radical change that has happened in this industry, which you have seen many waves of, and the rise of streaming services and the growing, what you have referred to in the past, as the relevance of what we traditionally think of as Hollywood.
that there is this great thing about Hollywood, which is that at the end of the day the content matters, and there is no algorithm to develop the perfect (COUGH) content that does go viral and capture the zeitgeist. That there's some magic to that still. At least from the outside.
Diller: Well, of course there is. So long as--
Byers: --magic.
Diller: and even you go back to the bromide of, you know, as long as people can tell stories, somebody's gonna come up with a story that is going to absolutely demand that people pay attention to it. It's always happened. I think it always will. We have examples of it every decade. Every year there's maybe one. But every few years. There's definitely one.
Byers: Right. So you're telling a different story now at IAC, which is you have this portfolio of--
Diller: Please don't forget Expedia.
Byers: And Expedia.
Diller: Yes.
Byers: And actually I wanna talk about the travel industry too and what Google is doing there. But, you know, so let's say Jeffrey made a bet. He said, "Okay, here's something where I'm gonna put all my chips in and make a better."
Diller: Right.
Byers: When you started IAC, what was the bet that you made in terms of the companies that you buy? You've got the travel space. You've got the home and lifestyle space. You've got the dating space. You own OK Cupid and Match.com.
Diller: Well, yeah, and also--
Byers: Tinder.
Diller: --look at what we've owned that we've spun off.
Byers: Right.
Diller: Ticketmaster. Endless numbers of things that have, you know, gone on. I mean Lending Tree.
Byers: Right.
Diller: It's all over the place, which was, in a sense, when you say what was it, it was nothing that you could-- take it as the opposite of Quibi, which is a very clearly defined, narrowly defined program idea. When we started IAC, we simply said that interactivity was going to change things.
And we were at the right time and the right place for that to happen. This was the very beginning of the internet. That interactivity was gonna change things. And we were opportunistic. I would go in any direction that I thought was simply an interesting idea that was essentially a virtual company that functioned primarily on the internet.
And of course there was so much opportunity. I mean the list of things we missed is obviously wildly greater than the things we did. But the things we did ended up, when you value them, and it's a fact that I'm always astounded at, and I think to myself, "Jeez, how did that happen?" Which is we took a company that had $40 million in sales and a $250 million market cap, and it is now 25 years later. That has turned into $70 billion of assets.
Byers: It's incredible.
Diller: So, you know, by the way, not conventionally done. There is nothing like that kind of concept of building up companies and then spinning them out. We are both a conglomerate and an anti-conglomerate at the same time. That's, like, a unique idea. It was not, by the way, born full-blown.
Byers: So yeah, so philosophically what did you see? Did you see that people--
Diller: I had one thing. I had one idea. I had one idea. It wasn't even an idea. It was a kind of epiphany, which was when I went to QVC in '92, after I left Fox. And I didn't know what I was gonna do, except I didn't wanna repeat myself. n I went to QVC and I saw screens being used for something other than telling stories.
For the first time, I saw this screen. All I knew you did on screens was tell stories. You know, whatever. Comedies, dramas, whatever. Musicals. And I saw a screen that was being used, in that case at QVC to present products, and the audience interacted with those products and bought them. Basically off the screen.
And I promise you, I had nothing else in my mind. It's not like I said, "Oh, this is gonna happen. That's gonna happen," 'cause I didn't have a clue. But I did say, "Well, this fascinates me. I've never seen that before. So I'm curious about that interactivity." And that curiosity is what gave IAC, the beginning of IAC and all its progeny, that curious gave impetus to playing. That's it.
Byers: Right.
Diller: You know? Now, I was incredibly lucky. You know, I believe that, you know, there's a lot over-credited to people, me and, God knows, many others, (LAUGH) that are entirely dependent upon timing. You know? You know, it's like, "Okay, well, there was John D. Rockefeller."
But there actually-- who was, you know, I'm probably comparing myself, but he was a pretty big business genius, as it turned out. But if they hadn't discovered oil in I think it was not Oklahoma. Ohio. If they hadn't discovered oil in Ohio, what the hell would he have done? So I got to a place of curiosity at the very beginning of a radical transformation of communications and media. How lucky do you get? (MUSIC)
Byers: We'll be back right after this. (MUSIC)
Byers: So there's something happening right now with travel, which is Expedia, if I go to Google right now and I search for the fastest way to get from, say, LAX to JFK, the first result I'm gonna get, even probably if I type in the word Expedia, is going to be a Google flight box that is going to tell me--
Diller: Not if you type in Expedia.
Byers: Not if I type in Expedia. But it does seem--
Diller: That's our hope.
Byers: But Google is doing this thing, and this is sort of--
Diller: Yes.
Byers: --the great concern of regulators and the Elizabeth Warrens--
Diller: Yes.
Byers: --of the world that say you can't simultaneously be a platform--
Diller: We are a top five--
Byers: --and offer a service on that platform.
Diller: --advertiser of Google.
Byers: Yes.
Diller: We spend billions, and I mean multiple billions. Last year three and a half billion. On Google. And Google is increasingly competing with us, its advertiser.
Byers: And how does that make you feel? (LAUGH)
Diller: Many things. (LAUGHTER) Many, many escalating things. I think that, look, Google is a monopoly. They are doing what is natural to monopolies. And they won't stop doing it until they get regulated, which they will. It's only, to me, a question of time.
Byers: Dude, I feel, like, government is so feckless and I feel like (LAUGH) regulation is-- I feel, like, by the time that Washington gets around to regulating Google and the other tech companies, that they will be regulating problems that existed five years ago, and they will not be positioning themselves to regulate the problems that are coming down the (UNINTEL).
Diller: It's often true, but nevertheless, regulation has been historically a break on monopolies. And a healthy break on monopolies. And you know the examples of it well. The monopoly, Google is not gonna be brought to its knees, but it probably will be brought to its ankles.
And that's healthy. You can't have a monopoly. Monopolies. Well, why would I brother with such a bromide. (SLAPPING) Monopolies are (LAUGH) inherently obviously unhealthy. And monopolies act absolutely in similar ways. There's not, like, a lotta multiple turns on the ticket of a monopoly.
If you're a monopolist, you look to extend, in ways that you can, because you're a monopolist, your dominance over whatever world you're a monopoly in. That's natural. It's gonna happen. It does get stopped. It will get stopped. And, you know, it always takes extra years longer. But I do still believe in that. I've seen it. Obviously, history. Notwithstanding what you feel of our current government or any government period, history has told us it'll happen. So I believe that.
Byers: And so just while we're on this, what's your current sense of where Facebook is headed? And also just sort of how you feel like Facebook has navigated its way through the last sort of five years of controversy and scandal and being sort of whipping boy for all that's wrong with tech.
Diller: You know, I'm amazed, in a way, that I think two things. They've made enough mistakes, mostly, almost always in the public relations part of it--
Byers: Right.
Diller: --than you'd ever think could happen with unforced errors. (LAUGH) It's quite amazing to me. At the same time, I do not think that Facebook is one of those, quote, "monopolist's market monopolists," that needs, quote, "regulation." Unless it involved purchasing TikTok, for example, or, you know, other things.
You know, every kinda situation like this needs a ringer, and Mark Zuckerberg, and I think again, you know, he doesn't have natural instincts as a public person. So I don't think it's, quote, "his fault." I think there's nothing evil-- and I know Mark for a while pretty well. He's the opposite of evil.
Byers: Right. He has been portrayed as evil. I mean--
Diller: No, no. I'm saying he is a decent citizen. He's incredibly thoughtful. He's a natural, truly natural, brilliant kinda organizer of things. I mean it is not an accident that Facebook happened in the way it happened, nor an accident that they bought Instagram. And WhatsApp. He's done beyond fantastic.
Diller: And when you think of what Facebook is criticized for is the recklessness of its incredibly vast audience and the ability to manipulate that audience by-- whether it's states or dark, horrible people practicing bad things. And could they have been earlier at trying to regulate it themselves? Trying to get bad actors out of it? Yes, probably so, but they were running so fast and it happened so quickly. I mean, you know, it's just '16--
Byers: Right.
Diller: --when all of this basically happened. They did put, have put huge resources into trying their best. For which they get nothing for it.
Byers: No, they get no credit for that.
Diller: And I think it's the most monumental botch up of really a public face of a company, for which I blame, frankly, everybody but Mark. Anyway.
Byers: Yeah, no, but so this (UNINTEL)--
Diller: And I'm sorry, I wanna do one more thing. Which is on the thing of him saying that they're not gonna regulate political advertising or they're not gonna vouch for the truth in political advertising, what an absurdity to ask somebody to vouch for truth in political advertising.
Byers: So I agree.
Diller: And yet, he says it. A totally sensible position. And he gets crucified for it.
Byers: Yeah. This is an area where I agree with you, and I will tell you, working in a news organization, everyone acts like that decision is so cut and dry and so easy. And then you have to remind them that even their own network actually isn't allowed to stop running a political ad.
Diller: Yeah. By the way-- (LAUGHTER)
Byers: Because it contains--
Diller: --I can say when this happened--
Byers: --a falsehood. (LAUGH)
Diller: --that it is against the law to actually intervene in political advertising on broadcast or linear television.
Byers: If you had Mark's ear and you were to say, "Look, the tide of public sentiment has turned so hard against you. You are operating from such a deficit. Everything you do, you will get demonized, no matter what you do," what would your advice be in terms of how to get out of this morass that they--
Diller: Keep on trucking.
Byers: --they find themselves in. Just keep on trucking--
Diller: And I've said, but don't hide. Be transparent. Communicate more. Just keep communicating. What you say is thoughtful and makes sense. You just keep saying it. Say it louder. Not louder, so to speak, banging it, but say it. Be out there. You can't hide. So say what you think and you believe. And since you're a sensible person, and a good, decent citizen, it'll work out. Eventually it will work out.
Byers: Yeah. So I wanna end on politics. You and I are talking on the day of the New Hampshire primary.
Diller: Oh yes.
Byers: (LAUGH) You're a Bloomberg person. Yeah?
Diller: Well, a Bloomberg person.
Byers: Is that a fair assumption?
Diller: I've known and admired Mike for many, many years. And if Mike gets the nomination, I'd wildly support him. But I will support almost anybody who gets this nomination. Now, you know, I hope that everybody in the Democratic party is by definition a progressive.
I hope that we don't have somebody who takes that too far, and a couple of them are up there taking it too far and getting, particularly in Mr. Sanders. I would hate it if he became the nominee. For so many reasons. I think, well, primarily, inelectability.
But, you know, kind of was happy at what happened last week with Trump. That he at his apex, it seems, right now. That everybody said he had this fantastic week, between the impeachment and the Iowa mess. And that, if you asked most people, they said, "Oh, he's gonna be reelected. He's gonna be (CLICKING) reelected." I mean to me, it reminds me (CLEARS THROAT) of Bush after the Iraq War. At 80-some odd percent.
Byers: Right.
Diller: About the same time, February, March, April, May, something like that, prior to the election that elected Mr. Clinton. I love that Trump is in this right now ascendant position, because I think it's gonna fall from here. And I think he's not gonna be reelected. But the Democrats are certainly doing their very best (LAUGH) right now to set off, you know, a rocket and then run to where it's going to land.
Byers: Yes. It seems to me like the Democrats--
Diller: But that's okay. You know, (LAUGH) that's okay. A late game is perfectly fine with me. So I don't pay much attention to this. There are many candidates, many candidates that I think are worthy. Certainly Pete is remarkable for so many things. For such wisdom and sense at a young age. And I like Amy Klobuchar. I think she's great. And those are probably the ones I--
Byers: It seems--
Diller: --would hope for, 'cause, I mean you can say be more than a centrist, (RUSTLING) but I don't know how in politics you really get enough people around you unless you are centrist.
Byers: Right.
Diller: Anyway.
Byers: I think being (THROAT CLEARING) centrist right now is sort of a radical proposition.
Diller: Yeah. Yeah.
Byers: It does seem to me that part of the larger debate happening among Democrats right now is sort of a debate that's typified by Sanders versus Bloomberg, which is one of sort of populism versus-- you know, I mean from the Sanders point of view, he said it right before you and I started this interview, that Bloomberg's just another billionaire trying to buy the election.
Diller: What an idiot statement. I mean, first of all, look. Maybe 'cause happen to be one, but I don't really think so. I mean, you know, there's many dopes. We have the greatest dope billionaire, I don't even think he's a billionaire, as president.
But, you know, there's every grade. To simply categorize all of them in one big heave, you know, horrible pot is insane. To say anything about Mike Bloomberg and his, quote, "money bags," as against this career of excellence in being able, again, against every odd possible, to build up this information system of Bloomberg to the degree he has.
Then to dedicate himself for 12 years as mayor of New York, and I was there with him. I'm not with him, but I was there observing and participating, to a not really large degree, but whatever. And watching him be such a superb executive. Just simply you cannot criticize his executive leadership of that city for that period of time. How do you criticize somebody who says, "You know what? I'm giving away all my money." Who's been philanthropic, but not philanthropic in anything safe.
Byers: Right.
Diller: I mean, believe me, saving poor people in the world, I mean, God go with them. But Bloomberg, who cares deeply about, for instance, the tobacco. Cares deeply about, you know, sugary drinks. About gun violence and (CLICKING) climate change and all those things, and has put his resources in big numbers to work against them. How the (BEEPING) forgive me do you demonize that person and call him a billionaire.
Byers: And so on that point, though, what I wonder is the rhetoric plays very well with the crowds, with Sanders' crowd. And I guess what I'm wondering, you are a billionaire, as you said. (LAUGH) Do you worry about this larger, I don't know--
Diller: Demonization?
Byers: --this sort of class struggle and this sort of demonization of billionaires in the sense of the sort of widening gap--
Diller: Well, because look, it is absolutely right and fair to say that this gap is much too large. I blame it on the demise of unions, and the fact that companies have really actually, for world competitive reasons, whatever reasons there are, profit or anything, we pay our workers too little.
We have not given them the benefits of this incredible economy over the last 20 or 30 years. It used to be finance was a relatively small part of the economy. It's a huge part of the economy. It doesn't add value. I'm not saying it's a bad thing.
But all these things are true and real. But it's not like its productive to, quote, "blame" the ones who have, either through their own grit, their luck, their this or that, or inheritance, who have most of the goods. The problem is, truly, government policy.
And yeah, I absolutely believe in a lot of the specific-- look, when Bernie Sanders says about health care, and all of his stats about health care, he's right. Well, we tried to change it. The forces were against really changing it. But those are the things, yes.
Those are the things to go and actually fix. And we have to fix this. To me, to fix the inequality you have to have strong unions. Corporations have to earn less money. So what terrible thing will happen if they do? And that will, you know, help as we make this transition, this next transition to, you know, automation and artificial intelligence, which is gonna change the workforce dramatically in the next 30 years. Anyway, you don't wanna hear me babble on about that. q
Byers: I actually do. We are running outta time. I do wanna ask you one more thing, which is also somewhat about a civic-minded question. You and your wife are working on a park in New York?
Diller: Yes, we are. (UNINTEL PHRASE).
Byers: It's an island--
Diller: It's an island.
Byers: --off the west side of Manhattan.
Diller: It is.
Byers: How's it going?
Diller: Oh, drive by it.
Byers: When are we gonna be able to--
Diller: You can see it.
Byers: --walk onto it?
Diller: In probably a little more than a year. I think we'll finish this year. Formal construction. And then we'll open in the spring of '21. But, you know, for those people driving up and down the West Side Highway in New York City, I love that, you know, they keep cheering me on with emails and letters and things like that. 'Cause when you see it rise, it's certainly unlike anything else.
Byers: Right. Just for the folks who haven't heard about this project, what is the philosophy here?
Diller: What happened is, you know, like all accidents, and this is an accident. Everything I've ever done (UNINTEL) is one way or the other some (LAUGH) accident of circumstance or whatever. It started because they asked me if I would rebuild a kinda pier, of which there are many in New York. Boats went on either side of them. Now boats don't go on either side of them anymore, but they're used for, you know, other, you know, purposes.
And I said, "Well, I'm not really interested in doing that. Like, building a pier like every other pier. But if I could be ambitious about it, if I could actually build something in the water," which New York has never done. And believe me, I don't have pretentions to the Sydney Opera House. "But if we could build something iconic and interesting in the water, that would give people pleasure, you know, wow. I'm up for that."
So we started. And like many things, it went wildly beyond the original concept. I mean the original concept I think were-- can I even do the multiplier anymore? It was seven or eight times what we thought we would spend on this. But once you're in pursuit of something, you know, you get in train (?) with it.
And so we're lucky enough. We have resources. And it is ambitious architecturally. It's ambitious in what it will do, which is gonna be a place where people cross these bridges to get to the island, and hopefully leave New York behind. But be able to still see it. Look, we're able to do it. It's, to me, every day fascinating and engaging for me to do this. And I hope since we're doing it, it's total non-profit. It's only to please people. And we hope it does so.
Byers: The sounds like a great risk, but from all the screens and the streaming and the--
Diller: Yeah, yeah, yeah.
Byers: Thank you, Barry. (MUSIC) For doing this--
Diller: It's a pleasure. Happy to be here.
Byers: I'm very grateful. (MUSIC)
Diller: Happy to be here in my own building. (LAUGHTER) I'm here very rarely. (MUSIC)
Byers: That was Barry Diller, chairman and senior executive of IAC/InterActive Corp and Expedia. Byers Market is a production of NBC News and is produced by Jonaki Mehta of Neon Hum. WE have production help from Tanner Robbins of Neon Hum and Allison Bailey of NBC News. The show is engineered by Scott Summerville. Steve Lickteig is the executive producer of podcasts for NBC News. And I'm Dylan Byers. (MUSIC)