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Diller's master plan
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December 28, 1998: 8:34 p.m. ET
Science fiction, Internet are only part of mogul's media convergence strategy
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NEW YORK (CNNfn) - Barry Diller has spent years and billions of dollars building a "hodge-podge" empire of media properties ranging from USA Networks to Ticketmaster Online, but, as he told CNNfn in an interview aired Monday, the logic is as clear as crystal.
"We're in two distinctive businesses," he said on "Moneyline News Hour with Lou Dobbs." "One of them is television production and distribution and the other is e-commerce. I think they have a thread" in common.
That thread is the direct-sales business model, a mainstay in Diller's television philosophy since the early days of the Home Shopping Channel, and is now making a widening stir in the retail world in the form of Internet retail.
"I think the next step is that direct selling replaces a part of normal generic advertising," he said. "There's going to be another stream of revenue for people in the production and distribution business, and it's going to come from the direct sale of products that used to come from just the sale of generic advertising."
In particular, Diller said the diversity of his current business holdings would be its own strength as electronic commerce grows as an accepted retail outlet.
"The wind is at the back of e-commerce. This is not some great revelation, but what I think is interesting is when you have it tied to a company who is primarily involved in the old-fashioned forms of television production and distribution," he said. "Entertainment and information and direct selling. I think that's the next convergence. I think that's what's going to happen in the next several years."
While Diller looked forward to such a convergence of media and business models as "interweaving" his electronic commerce and television assets, he didn't see traditional advertising-based television disappearing in the near future.
"I don't think things displace other things completely," he said. "The truth is, of course there's going to be advertising -- normal, standard, generic advertising. I do think a real slice is going to come out of it and go into direct selling."
As for the immediate fate of his television properties, he promised a raft of original programming ahead for the Sci-Fi Channel and a facelift for the USA Network, flagship of his ragtag fleet.
"We're pouring money into production at Sci-Fi, so what we're going to do is, hopefully, fulfill the promise of its name," he said. "The same is true of the USA Network. The job there, of course, is to give it more definition. It'll take on a voice."
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