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Influencers Transcript: Barry Diller, January 17, 2019

ANDY SERWER: Barry Diller knows what we want before we even do. He's a media mogul who transformed TV and movies, then bought up online businesses right as the internet took hold. He invented first of its kind programming at ABC and held Paramount Pictures and Fox over better years for those companies. Then he struck out on his own with IAC, an internet holding company that has created equity value of more than $50 billion in top brands like Expedia, Ticketmaster, and Tinder.

The entertainment industry is in upheaval. Diller is here to tell me where it's going next.


Hello, everyone. Welcome to "Influencers." I'm Andy Serwer. And welcome to our guest Barry Diller. Barry, thanks so much for joining us.

BARRY DILLER: Happy to be here.

ANDY SERWER: So let's talk about IAC, your company, which oversees, controls, and owns--

BARRY DILLER: We've also got Expedia, though.

ANDY SERWER: Right, Expedia as well-- 3.4% stake in Expedia that you guys have.

BARRY DILLER: No, no, no. Expedia is its own public company. I'm the chairman of it. And It was part of the original group of spin-offs. We've spun off 10 companies from IAC in the last 20 years or so. And Expedia is one of them. But it's one of the ones that I've continued to have an interest in.

ANDY SERWER: So IAC controls, owns, has a majority stake in a slew of internet companies, including Angie's List, Investopedia. There's the dating companies--


ANDY SERWER: Match, Tinder.


ANDY SERWER: And all manner of things.

BARRY DILLER: A lot of other stuff. Yeah.

ANDY SERWER: And you know, it's interesting, because people don't recognize, perhaps, how well the company has done. And I just checked. Over the past five years the stock is up 160% versus the S&P, 44%. It's kind of a hidden success story. Why do you think that is, that people don't call it out?

BARRY DILLER: Well, because I think it's a rare bird, in that it's actually a conglomerate of companies. So it's very easy, for instance Expedia, which stands on its own, has a brand name. Expedia the public company is only about travel, whereas IAC is in all sorts of sectors. So I think that's partly why.

And also, we've really never chosen-- we've not thought about institutionalizing the name IAC. It's a trade name for us. It's not really functions for the holding company. Again, it's concept, which is rare, is it develops companies. And then when they're ready to be independent, it spins them out into being their own independent public company.

So that's its kind of generating philosophy. And that doesn't-- anyway, it is what it is.

ANDY SERWER: I mean, there's no peer group. And a lot of times--

BARRY DILLER: We don't got a-- no, no.

ANDY SERWER: --on Wall Street, they talk about a peer group. Does that hurt the valuation or how it's done?

BARRY DILLER: It hasn't seemed to.

ANDY SERWER: How much has it grown over the years? If you were talking about that.

BARRY DILLER: Well, OK. If you took its original market cap, original company was called Silver King. And that was $200 million market cap. And if you total it up today, it's, I think, north of $57 billion. So it's over 22 years, I think. So it's certainly grown in value. And it actually has outpaced most things. I was very happy one day a couple of years ago when our cumulative 22 years-- I guess 21 years then-- was better than Berkshire Hathaway's return.

ANDY SERWER: Well, I have to tell Mr. Buffett about that.

BARRY DILLER: Well, yeah, I do.

ANDY SERWER: Well, maybe we are right now, or you already have. So is that gratifying to you? Is that validation? I mean, you left the entertainment business sort of before the internet was cool in many respects.

BARRY DILLER: Well, it was really at the very beginning of the internet. It was in, really, '92, '92, '93. And I had been in the media entertainment business all my life. And I discovered, kind of, interactivity at a stage just before the internet really-- '95-- started to be used by, so to speak, normal folk. So I got attuned to it to the fingertips to a degree at a very early stage.

ANDY SERWER: Why did you know that was the thing to do?

BARRY DILLER: I didn't. I didn't. I was curious. I'd gone to QVC, which was the first part of this after I left Fox. And I'd seen this primitive convergence. And I saw something that really surprised me, which was a screen.

All I knew from screens is to tell stories. I thought that's what screens did. You told stories on screens. Here I was seeing screens being interactive, and putting up products, and having people with their television sets seeing them, and then with phones at the time, calling in and ordering them. And I was fascinated by screens being used for something other than telling stories. That curiosity was what led me to the internet.

ANDY SERWER: Going back to IAC and some of your properties, Daily Beast is another one. And those properties, the valuation of some of those internet companies, maybe particularly digital media companies, seems to have peaked last year. And the bloom's off the rose a little bit. There are other things going on in that business, too.

BARRY DILLER: It's just because-- look, publishing is very difficult. Publishing, historically, has been primarily based upon advertising. And when advertising, digital advertising, came in, it really destroyed the base of all, so to speak, print media. And all media that was based upon advertising other than television advertising was imperilled. And it's been slow for that entire world to readjust itself. And digital publishing is enormously difficult, because there's just so much inventory that there's no pricing power.

ANDY SERWER: So is there any hope for that business?

BARRY DILLER: Yeah. I mean, look. I think if you have a product that people see, then there's always hope. But you're seeing now subscriptions really take up the slack, so to speak, in digital advertising. And so I think as most print or digital publishing companies have kind of moved to a hybrid of subscriptions and advertising. And I think that's probably the future. I think you'll end up-- I've always thought that once the payment systems get worked out-- and they're still nascent, the ability to actually see an article that you like or something that you want and be able to buy it for a 1/4 cent, or $0.03, or whatever is the clearing price for it. But it will come.

ANDY SERWER: Going back to earlier in your life, you dropped out of UCLA. Would you recommend-- and it seems like so many successful famous people do that-- is that something that you recommend? Or is that something that just happened?

BARRY DILLER: I don't recommend. No. I mean, look. I think in many respects, I suffer from not having a great education. However, for me, I was interested in media and entertainment. And there's no school-- really, no school-- for that. And so there was no purpose, like directed purpose. I was interested in something else.

And I wanted to begin. So for people who want to do that-- look. If you need to learn x, y, and z in order to do what you want to do, most likely you're going to find that in a university system. If you don't, and you're just going for a general education, while I think that's a nice luxury, I don't think it's necessary. I don't know that it's going to hurt you.

ANDY SERWER: But you have to have an ambition, a vision, and confidence--

BARRY DILLER: Not-- no, I didn't have any confidence for sure. And I certainly didn't have any vision. I had an interest and a curiosity, which was, I really liked the entertainment business since I was like six years old.

ANDY SERWER: A kid growing up in Beverly Hills.


ANDY SERWER: Right. And then you went to William Morris and worked in the mail room.

BARRY DILLER: I did, I did.

ANDY SERWER: Right. At ABC you said that, my curiosity is only about things that don't have a record. And that pertains, maybe, to doing the mini series there that people didn't think were going to succeed. But did everything you do succeed? Did you fail, or did you learn from failure?

BARRY DILLER: What, in my entire life?

ANDY SERWER: Yeah. In business.

BARRY DILLER: In business, actually, I'm afraid to say-- knock on some wood somewhere-- yes. I mean, I've had projects.

ANDY SERWER: That things succeeded. Most things succeeded?

BARRY DILLER: I've had projects that failed.


BARRY DILLER: I mean, you can't be in the entertainment business and not make a bad movie, or bad television show, or bad whatever. But in terms of actually succeeding at career? Yeah.

ANDY SERWER: Well, let's turn that on its head.

BARRY DILLER: I've been lucky.

ANDY SERWER: Because you know, you hear a lot of, oh, I learned so much from my failures. It's become sort of a trope. Right? And I'm sure you did. But what did you learn from your successes? Let's ask that.

BARRY DILLER: The only thing I learned, actually, was to forget them almost immediately.

ANDY SERWER: Forget your successes.

BARRY DILLER: Absolutely. I mean, I always thought-- I mean, at ABC we had a huge success with the "Movie of the Week" and "Novels for Television," a mini series, which had not really been done before. And that was wonderful. Then I go to Paramount in the movie business. And for the first couple of years it was really hard to figure out what movies to do, what kind of organization, to make this change to kind of a modern movie company. And it took us a couple of years. And then we went eight straight years as number one in the movie business.

And about the second year, I remember thinking, I see the people around me getting really arrogant. And I learned how awful a poison arrogance is. And so one of the ways you guard against arrogance is to forget success. So I just always tried to brush it clean. Sometimes successfully.

ANDY SERWER: So let's talk about the entertainment world, which is a world that you left, but you're still connected and you still follow it.

BARRY DILLER: Yeah, we still make movies.

ANDY SERWER: Right. Right.

BARRY DILLER: We still make a few movies a year.

ANDY SERWER: Right. CollegeHumor and--

BARRY DILLER: No, no, no. "Lady Bird" was a movie of ours. "Eight Grade" last year.

ANDY SERWER: How did you produce that then?

BARRY DILLER: Pardon me?

ANDY SERWER: How was "Lady Bird" connected to IAC then?

BARRY DILLER: It was a co-production between IAC, Scott Rudin, and A24. So we're still, in a very small way-- I mean it's not material. But I think it's healthy for both me and for some of my colleagues to have some interest in media.

ANDY SERWER: It was a fun movie, by the way.

BARRY DILLER: It was good movie. Yeah.

ANDY SERWER: It was great. But let's talk about the media companies, because the world has changed so much.


ANDY SERWER: And I'd love to, if we could, Barry, go through them, and maybe if you could give us your take on each one of them. Let's start-- in no particular order-- let's start with Comcast and NBC, because NBC has just said they're going to be doing the streaming business. So what's your take on that situation then?

BARRY DILLER: Well, look. I think they've been probably most prudent. They are a very successful cable company. They're very successful in terms of innovation with Xfinity. They're a extremely well-managed company. And then they have all of these entertainment media assets. And rather than plunge into investing billions of dollars chasing Netflix, I think they've been very procedural about it. And I think, probably, I think it's wise.

ANDY SERWER: OK. What about--

BARRY DILLER: And they're also offering an interesting--

ANDY SERWER: And the streaming makes sense?

BARRY DILLER: Well, the streaming that they're doing, which is, essentially, I mean, it's free advertising supported. All the other OTT streaming services-- Hulu is partly, but really it's subscription-- are subscription driven. They're going to do a semi-ish hybrid. I think that's interesting. Anyway.

ANDY SERWER: Good. Let's talk about CBS and Viacom, and put them together, because it seems like they're going to be reunited. What's your take on those two companies and businesses?

BARRY DILLER: It's not fair for me to really say anything about other companies. I guess the only thing I would say about CBS-Viacom is that it's got a very hard road ahead of it, just because in the broadcast side, CBS does very well. But that can't be that much growth on that side of it. And on the Viacom side a bit, they're sitting on ice on those cable programming companies, because there is no question that cable program pricing has lost its power to your programmer.

So it's difficult. But they've got lots of assets and who knows?

ANDY SERWER: Right person could turn that whole situation around.


ANDY SERWER: What about your old boss-- Fox and Rupert Murdoch? What made him, or what has made him, so successful? And what's your-- it seems like he's exiting the stage.

BARRY DILLER: Rupert, he's probably-- in people I've known-- he is the most potent. I wouldn't even call him an entrepreneur or originator in media. I mean, this is somebody who literally put his company up for risk constant times.

The first time he put it up for risk was to build Sky. Sky is a huge asset now in the hands of Comcast. He allowed me to start at Fox Broadcasting based upon a back of the envelope equation that I said I thought it was interesting. And two weeks later we bought Metromedia for $1 billion 100 million, which News Corp didn't really have. And as he said, we're betting the company. I said, wow, that's impressive.

Then he comes along and starts Fox News. I'm hardly a fan of Fox News. But everybody said at the time of Fox News, hopeless. Who needs another cable network? And Rupert Murdoch put up-- I don't know-- $1/2 billion dollars on a roll that he could create an alternative news service. So there's nobody as accomplished a smart gambler, up the stakes gambler, than Rupert Murdoch.

And I think he came to a point on the broadcast side-- sorry, on the entertainment side, where he said he didn't have enough assets to compete. But he's still got 20th-- I don't know, I guess they're calling it 21st Century Fox, still-- plus News Corp. Nothing entrepreneurial, or gutsy, in terms of just pure willpower would surprise me about what he does next, even though he's hardly a child. He's still got one of the great brains, and one of the great spirits.

ANDY SERWER: Disney is also in a very powerful position these days. What about their roadmap going forward and Bob Iger?

BARRY DILLER: Well, it's the most-- you know, Mr. Iger has-- and he's done this multiple times beginning with Pixar, which most people thought, why are you buying Pixar? Which turned out after he bought Pixar, Marvel, Lucas, et cetera, to be a great strategy. Disney has led the film business for years now because of that strategy and leadership. And he's really decided that he wants to go direct to the consumer.

And so he's lining up that company, and he's made a lot of bets to go direct to have a-- rather than an indirect relationship like Netflix, to go direct to the consumer. It's a huge, I mean, it's a huge endeavor, huge cost. And I think there's nothing other than to admire that he has so completely said, here are the stakes I'm putting up on the table, and this is how I'm going to compete.

And so it's going to be fascinating to watch.

ANDY SERWER: We mentioned Netflix a few times here. And I understand you're a fan. They're spending so much money on content. Then you hear about peak content, and they're overdoing it, you still like them?

BARRY DILLER: Yeah, for sure. Yes.

ANDY SERWER: That strategy is going to work?


ANDY SERWER: It already is.

BARRY DILLER: Has worked. Now, they're going to have more competition than they had, certainly, in the future. But once you've built up to $200 million or so subscribers, it's very hard for anybody to come close. And eventually, the dollars will rationalize, and I think their cash flow will be huge.

ANDY SERWER: They raised prices recently.

BARRY DILLER: They can continue to raise prices.

ANDY SERWER: Are we in a new golden era of TV? And do you miss it?

BARRY DILLER: No, I don't, really. Look, I spent 25 years kind of running movie and television companies. And so it doesn't have any really curiosity other than individual projects that I'm still kind of interested in. So I don't really miss it. And I also think that-- and I've thought this for a long time. I thought television was a much more creative media than movies for a whole lot of reasons.

And even though yes, more things are being produced now than are worthy of being produced because that need, or at least the production impetus for it, is so great. But truth is, while there is more than you need, and more than is really good, there's still an enormous amount of quality on television. I mean, consistent quality, far greater than movies by a zillion miles.

ANDY SERWER: You mentioned some projects. What are they?

BARRY DILLER: What do you mean? In terms of--

ANDY SERWER: For yourself.

BARRY DILLER: Well, we're doing for HBO an eight-hour documentary with Bennett Miller, wonderful director of "Moneyball," et cetera. And it's about what are the consequences of artificial intelligence in terms of humankind? And it's an extraordinary project. I think it will be on HBO probably within a year, and I think will be a great document of our time.

ANDY SERWER: Let me ask you about the tech giants-- the Facebooks and the Googles of the world. Do they concern you, Barry?

BARRY DILLER: In what way?

ANDY SERWER: Too much market power, us not understanding the implications for society, that sort of thing.

BARRY DILLER: I think we've all wildly overreacted to Facebook and the-- certainly, they made mistakes. But the truth is that they are hardly an evil force. Certainly, they want to make money in terms of advertising. And they've done a phenomenal job at it. But they are a platform. And platforms can be misused, as well as used. Yes, they should have, could have, whatever. But they were growing so fast, I don't-- I mean, other than, OK, a couple of years of bumps and grinds. But they're really a great company.

I do think that once you get into monopoly positions, where Google really does have a monopoly position in search, I think that there have to be guideposts, regulations, that protect just against the natural monopoly. I don't think that they should be stopped from doing business. I don't think they should be chopped up or anything like that. But I do think once you've gotten to such market power, I think you've got to have regulation that restrains the natural tendencies of monopoly.

ANDY SERWER: Let me ask about dating. You are the dominant, you're the dating king, Barry.

BARRY DILLER: Oh, God forbid.

ANDY SERWER: But your companies have a huge position.

BARRY DILLER: We have a lot of products, yes.

ANDY SERWER: Match, Tinder, OkCupid, there's other brands. What is that business going to look like in five years?

BARRY DILLER: It keeps innovating. You know. I mean, Tinder was an innovation, complete house-grown inside one of our companies. And like anything, you have to keep-- if you don't believe that there's something to do every day to make your product better or differentiated, somebody else will. So it is a process of innovation.

The basic nature of it, which is connecting people, has been going on for, shall we say, quite a long time, whether it's been managed by parents, or by--

ANDY SERWER: Priests, states.

BARRY DILLER: Sure. Or by churches, or whatever. But the evolution of it, and it has been evolutionized, so to speak-- wonderful new word-- certainly by match.com originally, and a few others. It's going to continue to evolve as the technology evolves for sure.

ANDY SERWER: Let me ask you a little bit about politics, shift gears. I can see your face. Let's say that Donald Trump calls you up on the phone and says, Barry, you've got to help me out here.

BARRY DILLER: There's no chance of that. I'm sure there's a longer list than me.

ANDY SERWER: But what advice would you-- I mean, what advice would you give him?

BARRY DILLER: Quit. Resign. Go home. Leave us alone, please. Just let this period end. It was an accident of all sorts of forces. In 20 years-- God, I hope sooner than 20 years-- 10 years, eight years, it will be forgotten. It should be a great history lesson. You talked about learn from your failures. This country should learn from the extraordinary mistake it made in electing him president.

ANDY SERWER: So looking forward--

BARRY DILLER: So I would just tell him to go home.

ANDY SERWER: Go home. To some possible candidates on the Democratic side, are there any that you think should run? Are you supporting any?

BARRY DILLER: I think lots of them. No, I'm going to wait. Look, this is going to be--

ANDY SERWER: Or are you concerned there are too many? Maybe--

BARRY DILLER: No, because I think that stage-- you know it had 17 Republicans in '16-- I think that stage is going to have more than that to begin with. That winnowing process, I think is really healthy. And I think there are enough really decent and good people that the Democrats will find a candidate. And look, it may be that the Republicans will have a candidate, too, other than the current one, or the-- God forbid-- word incumbent.

ANDY SERWER: Let me ask you about your park in the Hudson River. $250 million that--


ANDY SERWER: --you and your wife have put in. No?

BARRY DILLER: It's going to be more than that.

ANDY SERWER: More than that? Oh, I understand. OK. How's that going? It look right magical. You can see the picture there.

BARRY DILLER: Yeah. Well, it's going up. We're driving piles into the Hudson River and putting these beautiful tulips--

ANDY SERWER: It's the artist rendering there you can see.

BARRY DILLER: That's a rendering of the finished. But now we're in construction. We're in heavy construction, will be for the next two or three years. And then in '20 or '21, probably the spring of '21, people will come and visit it. And I hope they'll be happy.

ANDY SERWER: I'm glad. As a New Yorker, I'm glad that you're able to do that.

BARRY DILLER: It's very ambitious. I mean, it's much, God knows, like many things that I get involved with. It started as a little idea, and it's ambition just overrode it. But it's all for the benefit of people who live in New York, and who come and visit New York.

ANDY SERWER: And then if it's successful, you'll forget it.


ANDY SERWER: Maybe not.

BARRY DILLER: This one I don't think I'll forget.

ANDY SERWER: Right. Right. Let's talk about cars, Barry. Because I remember one time, one early weekend morning, I was driving across Central Park. I took a ride on Fifth Avenue. And I pulled up next to you in a cream colored convertible. And we exchanged pleasantries.


ANDY SERWER: And I don't know what car that was, a beautiful, beautiful car. And then I understand you also have a Tesla, though.


ANDY SERWER: Are you a Tesla fan?

BARRY DILLER: I am mad for Tesla. I have two of them. And for anybody who has not driven one, if there is anything in the joy of driving for you-- which a lot of people really enjoy that-- there is nothing like being in a Tesla and getting a green light and accelerating. It's a thrill. And it's a beaut-- it is the most beautifully designed thing, car, I've ever been in. It's magic.

ANDY SERWER: Is the company going to succeed?

BARRY DILLER: Well, you know, I'm so product-based in the way I think about things that, yeah, I think it will. Now, without any history-- look, it's the most amazing thing. To build a car of that sophistication with no history in that industry is a kind of genius.

ANDY SERWER: Have you met Elon Musk?

BARRY DILLER: Yes, yes, yes.

ANDY SERWER: And you've obviously told him that you're a fan.

BARRY DILLER: Yeah, no. I mean, I think he knows it. I just think if product-- and I always do believe product is the answer-- meaning good product as against mediocre product-- they'll survive and thrive.

ANDY SERWER: Right. Are you concerned, Barry, about our society right now? We talked about the politics a little bit, but the divisiveness. And also, the income and wealth gap, I mean there are a number of real systemic problems, potentially.

BARRY DILLER: There are real issues. And I do think that there is no way to be involved in political life unless you're going to try however you can to revive-- the middle class is hardly dead-- but to pay much, much greater attention to the very, very broad outreaches of the middle. And I think not enough attention has been paid to that, and not enough hope and possibilities for people who are just entering, or having difficulty in the workforce.

Unemployment is not the issue now. But the issue is really-- and I was very much in favor of minimum wage, very much in favor of, I don't believe any company should employ anyone at a level less than being able to support, let's say, a family of four. So I think there's enormous work to be done. And I think it's unfortunate that we've spent the last couple of years-- the last, really, two years-- being so distracted from one of probably the most important issue, which is do people, just the general, general, mass, mass public, believe that their future is better than their past?

ANDY SERWER: And final question, Barry. How do you want to use your influence on the world?

BARRY DILLER: I don't think I have very much influence on the world. All I can do is in terms of controlling, presiding, so to speak, over a couple of companies that have about 30,000 employees, is offer opportunity. First of all, run a company that's based on fairness and doing whatever we do to make our products better. That's about-- I mean, if I can contribute at all, that's probably the only way I can contribute, other than what our family does in terms of charitable and philanthropy.

ANDY SERWER: Well, that's quite a bit.

BARRY DILLER: Seems like a lot right now.

ANDY SERWER: Right. All right. Thank you very much, Barry Diller, for joining me. I'm Andy Serwer. Thank you for watching "Influencers." We'll see you next time.