Barry Diller Says Studios Should Split From Netflix and Amazon by Cutting Their Own Deals With Guilds

Alex Weprin
·4 min read
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IAC mogul Barry Diller thinks that the Hollywood studios need to “reorient” their businesses, and fast, or else face potential “catastrophic” consequences.

The former studio executive, speaking to journalist Kara Swisher for her podcast, also expressed pessimism about the ongoing SAG-AFTRA and WGA strikes, and suggested that the legacy Hollywood studios should split with Netflix and their tech counterparts at the AMPTP.

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“I think one fundamental thing, they should certainly get out of the room with their deepest fiercest and almost conclusive enemy, Netflix, and probably with Apple and Amazon, because Netflix is in one business and they are the rulers of the business,” Diller said. “Apple and Amazon Prime are in completely different businesses that have no business model relative to production of movies and television, it’s just something they do to support Prime or something they do to support their walled garden at Apple.

“I just don’t think they belong in the same room,” Diller added. “I think the producers ought to go [to the guilds] and say, ‘We’re on our own, we’re going to go straight with you directly, we are your savior. Historically, we’ve been in business together for literally 100 years. We are your natural allies, not your enemies.'”

Netflix, Diller argued, was the “architect” of the strikes, due to its business model and the fact that every other entertainment company abandoned the lucrative pay-TV model to go all in on streaming. Now, thanks to the strikes, Diller told Swisher that he thinks next year, when the content pipeline dries up, the hit to subscriptions will be “kind of catastrophic” to every streaming service except for Netflix.

“The strike does one thing and one thing only, in the end, because the strike will get settled,” Diller said. “What does it do? It strengthens Netflix and weakens the others.

“Interestingly, two of those studios had perfectly good streaming services called HBO and Showtime,” he added. “There was no destruction by Netflix in either of those services, right? So you could have said, ‘Leave them the fuck alone.'”

Instead, HBO is now a part of Warner Bros. Discovery’s Max service, while Showtime has been folded into Paramount’s Paramount+.

Diller argues that the companies should instead “reorient” themselves in an effort to revive the bundle.

“[They should] say, ‘We each own a great television network, fully distributed in every household in the United States,'” he said. “‘Let’s go into competition, let’s let’s not treat it as some yesterday’s sliver. Let’s go compete. Let’s take some of our shows. Look, it isn’t the end of the business of hits. Let’s take some of our shows and our creativity and build our networks back up. It’s there for the take.'”

But he also expressed pessimism about the ability of the companies to make that pivot in time.

“Now, out of consolidation, these businesses are so down the ladder from where they were, that I think they have in various ways atrophied,” Diller said. “There are and have been and are right now some good leaders of these businesses, but my God, the problems they have.

“Bob Iger hands down, without any question, without any rhetoric, is a superb executive,” he added. “Throw him a problem in this area and it’s hard to find anyone better to solve it. He has, however, the kinds of problems right now that may be insoluble.”

In fact, Diller spoke of the Hollywood entertainment ecosystem as something that once was, and may not be in the future.

“What a golden thing it was at its best,” he said. “And circumstances, external mostly, but circumstances have changed that for the worse, and I don’t think it comes back.”

Diller also weighed in on some ways in which he made news himself. Last month, he made headlines when he said the top actors and executives should take a pay cut to try and help resolve the strike.

“The point I was making is that the top 20 actors make more — by a lot — than the top 20 CEOs,” he said. “I’m never one to say people are paid too much for anything, but when you’re in this kind of existential problem of the strike, maybe it’s a good thing for both big time senior huge payout people, both actors and executives, to show a little stuff to the majority of their fellow people. I just thought, you know, it’s a nice little olive branch. It took off in ways that I didn’t really contemplate.”

He also addressed the insider trading investigation over shares and options in Activision Blizzard, which Diller had acquired before the Microsoft acquisition was announced.

“The latest, I think, thankfully, is that we haven’t heard from any of the parties any of the government parties in some time. I was interviewed extensively by DOJ and SEC and one session where I went to Washington for several hours. This was six months ago,” Diller said. “None of us had any inside knowledge, there’s no gun, much less a smoking gun, here.”

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