Diller calls for regulation to restrain media conglomerates
Posted on Mon, Apr. 07, 2003
GARY GENTILE
Associated Press
LAS VEGAS - Ever the contrarian, media veteran Barry Diller Monday said deregulation of media conglomerates will limit diversity in movies and television and stifle competition.
Most large media companies have been pushing the Federal Communications Commission to remove or relax the 35 percent ownership cap that has limited the number of newspapers, television and radio stations one company can own in a market.
But Diller, speaking to the National Association of Broadcasters, said big media companies need to be restrained or they will push out smaller competitors.
"There are real dangers in complete concentration," Diller said. "The conventional wisdom is wrong. We need more regulation, not less."
His remarks put him at odds with his former bosses at News Corp., where Diller helped launch the Fox Television network as an alternative to the big three.
"The big four networks have in fact reconstituted themselves into the oligopoly that the FCC originally set out to curb in the 1960s," Diller said during his keynote speech at the association's annual convention. "Five corporations, with their broadcast television networks and cable, are not on the verge of controlling the same number of households that the big three did 40 years ago."
Diller said today's "vertically integrated giant media conglomerates," are driven only to gain "world media dominance," a motive that will gain support if current regulations are relaxed.
The FCC is expected to issue new rules by this summer governing cross media ownership. Most observers think the group, under the leadership of Michael Powell, favors relaxing the ownership cap. Powell will talk to the NAB Tuesday.
Diller just resigned as chairman of Vivendi Universal Entertainment, which runs Universal Studios, theme parks and a television production company. Universal has been lobbying the FCC to limit the financial interest a network can have in its own programming.
Diller is chairman and chief executive of USA Interactive, which operates electronic commerce brands such as the Home Shopping Network, Ticketmaster and Expedia.
Independent producers such as Universal, with no network of their own, rely on the networks buying their programs. Networks such as CBS and ABC, have been buying more shows from their own production arms, a strategy that keeps profits within the vertically integrated media company but shuts out independent producers, critics have charged.
"Ten years ago, independents produced 16 new series," Diller said. "Last year, they produced just one. The independents are dying in droves."
Diller also slammed the effect of media consolidation in radio, where large companies such as Clear Channel produce programs that supplant locally produced shows in their national chain of stations.
"Local broadcasters should not be simply the distribution arms of monolithic enterprises," he said.
Diller, who said later in an interview that he might want to engage in some media consolidation of his own some day, said big is not necessarily bad.
But he did call on the FCC to retain the 35 percent cap and allow media companies to have a financial interest of no more than 25 percent to 35 percent of the programs they air.
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