IAC chairman Barry Diller, the former studio exec and founder of Fox, is warning of a “catastrophic” impact to the legacy Hollywood studios if the SAG-AFTRA and the Writers Guild of America strikes extend beyond September.
Diller told podcast host Kara Swisher that when their backlogs of content dry up in 2024, legacy media will see a “high” number of streaming cancellations, putting them at a financial disadvantage once the dispute eventually gets resolved and production ramps back up.
“Just when they have to gear up to make new programming, to ‘get back subscribers,’ they won’t have the revenue base to be able to produce,” he said. “So that is kind of catastrophic.”
Diller called Netflix the “architect” of the strikes, arguing they seduced the legacy media giants to go all in on streaming and “lose huge amounts of money” to build competitive services and degrade their investments in cable.
“The strike does one thing and one thing only in the end, because a strike will get settled,” he added. “What does it do? It strengthens Netflix and weakens the others.”
The WGA strike, which started on May 2, has gone more than 100 days, while the SAG-AFTRA strike, which began on July 14, has entered its second month.
Diller called on legacy media to “reorient themselves” by building their linear networks back up.
“[They should] say we each own a great television network, fully distributed in every household in the United States,” Diller 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.”
He added that they need to split off from “their deepest, fiercest and almost conclusive enemy” Netflix, as well as Apple and Amazon, to reach their own deals with the guilds.
“Netflix is in one business and they are the rulers of the business. 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,” he said. “I just don’t think they belong in the same room. 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.'”
When asked by Swisher about the state of Hollywood, Diller argued that the consolidation of the legacy studios has caused their businesses to fall “so down the ladder from where they were” and that they have “in various ways atrophied.”
“There are and have been and are right now some good leaders of these businesses, but my god the problems they have,” he added. “Bob Iger is hands down, without any question, without any rhetoric, is a superb executive. 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, that are proving very, very tough to solve on every front in every area.”
Ultimately, Diller feels that the entertainment business has “not evolved for the better.”
“The Hollywood business really influenced the world in many, many wonderful ways. I mean, of course, like anything, it did some bad product — stuff like that, of course, would come along. But on the whole, for almost 100 years, what a golden thing it was at its best,” he said. “But circumstances have changed that for the worse, and I don’t think it comes back.”
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