Barry Diller: Studios Should Cut Their Own Deals With Guilds

The mogul argues that the traditional studios should go to the guilds and make their own deals: “We are your natural allies, not your enemies.”

From The Hollywood Reporter:

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.

“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.

For those unfamiliar with Barry Diller, check out his Wikipedia page. Fox Network? Diller launched and built it up. USA Network? Diller was a prime player in building that network. The sheer scope of his involvement with so many areas of the entertainment business — movies, TV, Broadway, video-games — speaks to his entrepreneurial instincts that have resulted in him having an estimated worth of $4.2 billion.

By the way, Diller was an outspoken critic of media consolidation all the way back in 2003 when he appeared on NOW with Bill Moyers.

It really is bizarre that the legacy studios find themselves in bed with companies whose goal is to crush the studios, most notably Netflix. It’s no wonder the CEOs are reportedly infighting. They have radically different goals and business models.

Supposedly, the AMPTP members must abide by some sort of bylaw (or whatever they call it) which prevents any company from breaking away and making their own deal with the guilds.

I’m curious what that “poison pill” might be. If it’s just money, at some point, wouldn’t the financial downside of the strike for the studios be less than paying whatever “fine” (or whatever) to extricate themselves from the AMPTP? That would also allow them to escape what seems to be a dysfunctional relationship with some very strange bedfellows (i.e., the tech companies).

For the rest of The Hollywood Reporter article, go here.

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