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Thriller Diller Drops
The Dreaded 'O' Word

Media visionary Barry Diller startled the annual meeting of the National Association of Broadcasters by decrying media "oligarchy" in America. The FCC ignored him.

by Judah Ken Freed,
"America Watch" columnist in Euromedia
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American media visionary Barry Diller shocked the TV industry at the 2003 convention for the National Association of Broadcasters in Las Vegas. Delivering the keynote address on April 7, he said the "O" word.

Talking about deregulation and America's latest media ownership rules, Barry Diller warned against the dangers of media "oligarchy".

Yes, that was word he used, "oligarchy."

A hard-nosed capitalist by any classic definition, a millionaire many times over, Diller nevertheless worries about the concentration of media ownership into fewer and fewer hands. He's concerned about the lack of diversity in content, the loss of differing points of view.

For the record, Barry Diller has been the vice president of prime time programming for ABC Television, chair and chief executive of Paramount Pictures, chair and CEO of Fox, and he's just finished a year as chair and CEO of Vivendi Universal.

Diller took over QVC in 1992, merging the television, telephone and computer to create the moneymaking machine called "home shopping". He proved convergence was both possible and profitable.

Diller later formed USA Interactive, based in Connecticut, where he's still the chair and CEO. A major player in the worldwide interactive media business, his flagship is the Home Shopping Network with the divisions HSN.com, Home Shopping Europe and Euvía in Germany. Other ventures include Match.com, Expedia.com, Hotels.com, and Ticketmaster.

Calling himself a "contrarian" who questions everything, Diller said, "What all my experiences have in common is a battle against the prevailing expertise. The problem with expertise is that it relies too heavily on conventional wisdom. If history teaches us anything, it is that conventional wisdom is more conventional than wise."

Now Diller made his point.

"The conventionalism throughout the whole media industry today is that consolidation is the only economic model, and that deregulation must lead or quickly follow, so these giant businesses can freely function."

Diller cited the 1996 U.S. Telecommunications Act, which deregulated mass media to increase competition and expand the diversity of media voices. "The unintended consequence of deregulation is that the government has inadvertently allowed to happen the exact opposite of what it intended to do.

"The big bad truth that I don't think anyone really understands, or gives enough importance, is that the big four networks (NBC, CBS, ABC, Fox) have reconstituted themselves into the oligopoly that the FCC originally set out to curb back in the 1960s. The possibilities today of somebody launching a new Fox network, a truly independent new network, are nonexistent."

Diller stressed that he's not calling conglomerates wrong or evil, "but I sincerely and emphatically believe that with such growing and unstoppable power, there must be fierce focus and vigor for the appropriate safeguards. For that to happen, there is probably only one group that can still help do what's necessary &endash; you." He pointed at the audience of broadcasters.

Terrestrial broadcasting is "the last place where the independent voice can still be heard. Local broadcasters should not be simply the distribution arms of monolithic enterprises."

Diller concluded, "There are real dangers in complete concentration. The conventional wisdom is wrong. We need more regulation.

"Specifically, I believe that raising the 35 percent limit [on local ownership] is not good for the industry or the public.

"I believe that having financial interest rules for these vertically integrated businesses is good for the industry and the public.

"I believe that having tight programme ownership and financial interest rules for the already completely concentrated cable and satellite business is mandatory."

Broadcasting is no longer the only engine of mass communication, he noted, but "it's the only one free to all the public all the time." Consequently, broadcasting has traditionally carried special obligations and historic public interest responsibilities that "many of you still understand and in your bones know should not become a relic of this modern age."

Since Diller's provocative speech, has the influential NAB and the voices of local broadcasters been raised in protest to the U.S. government? Sadly, no. Diller's recent appearance on Bill Moyer's "Now" on PBS also has not made a real dent. There has not been any measurable outcry from broadcasters or the public, at least, not enough to matter.

By the time you read this column, the FCC likely will have raised the local media ownership cap to 45 percent with no significant ban remaining on cross-media ownership. Deregulation and consolidation continues despite the warning of the visionary who made media convergence a reality.

America and the world suffers as a consequence. end.

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Euromedia
First published June 2003 in Euromedia
(
c) 2003 by Ken Freed
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