“Hollywood is now irrelevant,” says IAC Chairman Barry Diller
Diller, the former CEO of Paramount and Fox, talks about the diminished power of movie studios and why "Netflix has won this game" on the latest Recode DecodeRead full story
Diller is absolutely right. The media fallout and for Hollywood is likely to take place faster than many expect. The difference between the media establishment and other entrenched industries are the massive sunk costs which facilitated competitive moats. For studios, there are no real tangible assets, it all boiled down to relationships with talent and distribution. The Internet has changed that by making talent more accessible and distribution costs virtually zero. Content costs are falling bringing more players to the table in a game that was controlled by the few. Handshake deals matter no more.
Netflix released an inexpensive film, BirdBox, with barely a penny of money spent to promote it. They got as a side effect of the release of the film, the largest promotional campaign in movie history for free, in the form of memes on Instagram. That helped lead to another 7 million people in 90 days committing to give Netflix $120 per year to subscribe. That’s an incremental $840 million in predictable low churn revenue Netflix is adding per quarter. Put that same movie through Disney’s distribution model and see if you get anything even close to that result.
- Maryam BanikarimPurpose-driven change agent. Chair (RSF). Former CMO at Hyatt. Gannett. NBCU. Univision...
"Hollywood is irrelevant" is a good soundbite from Diller. But that's an exaggeration... Hollywood is simply being redefined to include the likes of Netflix.
Diller thinks Netflix “has won this game” with a subscriber base that will marginalize Disney Plus and even Amazon Prime. But the next wave of “Hollywood” seems to be yet another chapter in moguls relinquishing greater freedoms—first to actors (who were property of the studios)—and now to screenwriters, artists and dreamers of all kinds. It’s still Hollywood, just not the white guy lunch at the Ivy and that seems like a good thing. Rooting on Roma!!!
I agree Netflix is big... really big. But I'm not sure if Hollywood is "now irrelevant" since Netflix still—to some extent—takes in some films and shows from Hollywood. What will be the tipping point?
Indeed, a shift in power. More of a rebalance of power, which I don't see as a bad thing.
Hollywood is just a location... The location was important first with the stable weather, then the formation of union made thirty-mile-zone around Hollywood. The Netflix empire is free from that and it seems to be adopting more content from different countries, instead of buying remaking-rights.
So unpredictable a decade ago.. makes you wonder what will be a decade from now? Will Netflix still be on top or something we can’t even imagine yet?
What strikes me about this interview is how, many years ago, Diller approached the advent of the internet with curiosity, not fear. He sought to understand it, not resist it. This is clearly a key ingredient in his success as a leader and a businessman.
Great interview, if you have time to read or listen to it. Diller has “seen it all” in the entertainment industry, and his honest and comical self-analysis is both intriguing and humbling in this age of megalomaniacs. Take a read, if you have a few moments.
Wrong on both accounts "Disney would only do 'okay in streaming' when it launches its streaming service Disney Plus later this year. In general, he advised, 'those who chase Netflix are fools.'"
And when it comes down to any other player using the same strategies that were used by the very same studios for the Oscars, no-one really actually cares about it.
Perhaps it’s accurate to remember that is not about the industry, but it is about the content development that has moved industries across times.
Hollywood’s demise can’t come soon enough!
I don't agree with Mr. Diller that Netflix has won the game. Disney has started the battle with Disney Plus and while maybe it won't be able to start the fire, it still has ignited the spark. The Disney takeover of Fox Studios has forced Netflix to end all Marvel shows like Daredevil, Punisher, etc as Disney plans to have all original content on its platform. If all studios start doing that, Netflix would be forced to just bank on its original content.
Odd net flicks just raised my rates , sigh
If they put out more crap like "Birdbox" it won't matter what stars they have in it, they won't be calling Hollywood irrelevant for long.
Thanks for your great comment, @Mark.
Well my first comment. My grandchildren do not watch TV. Instead they are either on Fortnite, esports or watching videos on youtube. He may be right, chasing Netflix might be wrong. Instead see where it's headed and be there when it gets there.
‘‘Tis doesn’t show how good the movie was(it stank)... all it shows was how the stud internet can start a pet rock craze (lets blindfold our selves and see if we run into a chair)........people are sooo stupid
No...I don't agree. There will be Hollywood forever, if not for the "hub" it is, but also for it's historical role and location and allure.
What would Barry Diller know about what I watch & why.
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