May 14, 2013, 6:15 PM ETConference Presentation, Fireside Chat, Interview

A Conversation with Barry Diller (updated)

Diller defines his approach as pursuing "fundamental change" and "opportunity for real change" rather than intentionally disrupting comfortable industries.
He advises against listening to industry conclusions on what is impossible, noting that the "morning line" never predicts popularity until a product is presented to consumers.
Diller views the internet as a "radical revolution" that is only 18 years old and in its second generation, noting that it disintermediates middlemen to pass costs or fees directly to consumers or creators.
He identifies a universal trend where incumbents with closed systems resist change, citing the historical resistance to the VCR (Betamax) and current resistance to digital distribution.

Aereo operates on the legal precedent that consumers have the right to watch broadcast television for free, utilizing small, user-held antennas to capture signals for remote viewing over the internet.
The service offers a platform to replace the $100–$150 monthly cable bundle with a $8 monthly fee for access to local, national, and sports programming.
Diller believes Aereo's legal victory in the district court and Court of Appeals signals the end of the legal battle, predicting broadcasters will instead lobby Congress to override court rulings.
The strategic goal is not the antenna hardware, but shifting "centricity from closed systems to the open internet" to break the bundled cable model.
Diller projects 10–20 million subscribers on the platform would allow Aereo to drive additional programming distribution, further undermining closed cable ecosystems.

Newspapers: Diller predicts the "newspaper" business model will cease to exist, transforming into "information distribution systems" for niche, premium content (e.g., The Daily Beast).
The New York Times: He forecasts the Times will become increasingly profitable as consumers accept that high-quality journalism must be paid, citing their continuous investment in newsroom quality.
Movie Theaters: Diller argues theaters are "everlasting" due to the unique community experience, despite the technological feasibility of home viewing; he believes theatrical releases will eventually erode as home entertainment centers improve.
Publishing: He identifies legacy publishing houses as inefficient with slim margins, predicting digital-native publishers with strong editing teams can disrupt the market more efficiently.
Music: The music industry is in a transition phase where "disintermediation" is lowering record sales but eventually benefiting consumers; streaming services (Spotify, Pandora) are rebuilding revenue by paying creators directly.
Yahoo: He views Yahoo's future as dependent on its ability to move beyond display advertising (which lacks pricing power) by inventing and iterating new products with strong audience utility, such as their weather app.

Google: Diller considers Google a monopoly with 65% US and 95% global search market share, predicting it will prosper for the foreseeable future despite the difficulty of displacing search.
Facebook: He classifies Facebook as a "connectivity" tool rather than a "fundamental" infrastructure asset like Amazon, Apple, or Google, and does not predict it will fundamentally change culture long-term.
Amazon: Diller views Amazon as a fundamental arena for retail and distribution, contrasting it with social networks.
Microsoft: He attributes Microsoft's struggles with new internet initiatives to being "too big to innovate," noting they often succeed only after entering the market late with massive resources.
Netflix: Diller praises Reed Hastings' bold pivot to original content (e.g., House of Cards) and predicts a future where Netflix and HBO can operate as standalone apps, untethered from cable bundles.
Best Buy: He suggests physical retailers must offer unique relationships and services (e.g., "Geek Squad") to compete with the convenience and price comparison of online retail.

Rupert Murdoch: Diller admires Murdoch's unique ability to take risks and create new ventures (e.g., Fox network, News Corp separation) without being hindered by internal bureaucracy.
Jack Welch: He cites Welch as potentially the "best chief executive officer of a large enterprise ever" due to his relentless energy and ability to overcome bureaucratic inertia.
John Malone: Diller calls Malone the "real father of cable," praising his engineering background and role in financing almost every cable programming venture from the mid-70s to the 80s.
Jeff Zucker: Diller expresses excitement for CNN's future under Zucker, citing his "gutsy" nature and theatrical broadcasting experience.
Tina Brown: He describes her as a "simply great editor."
Jim Cramer: Diller dismissively categorizes Cramer as being in the "noise-making business."

Location Strategy: Diller contrasts Los Angeles as a "dull," work-focused town for entertainment production, while New York is the "most stimulating" global capital and connector for internet businesses, noting the shift of tech talent (Google, AOL) to New York.
Travel Industry: He asserts travel is an intrinsic human DNA trait ("if there's life there's travel") and is resilient against telepresence, with business and consumer travel rebounding quickly after short-term disruptions like 9/11.
Sports Rights: Diller attributes rising cable costs to the leverage of sports programmers in a closed bundle system, predicting that as internet alternatives (Apple TV, Roku) become standard, the 90% of households subsidizing 10% of sports viewers will be disrupted.
Net Neutrality: He describes the internet as a "miracle" due to its open nature, contrasting it with all previous communication systems co-opted into private closed systems, and expresses strong concern for preserving neutrality.