CONVENTIONAL WISDOM NO LONGER SERVES TV, DILLER SAYS AT NAB
LAS VEGAS -- TV broadcasters should move away from the “conventional wisdom” used in the past in their management decisions and recognize today’s new media climate, USA Interactive Chmn. Barry Diller said. As keynoter at the NAB convention here Mon., he said: “Conventional wisdom throughout the whole media industry today is that consolidation is the only way and that deregulation must follow shortly” -- and he said that was wrong. The public interest mandate, Diller said, is still alive and FCC should provide a “well-reasoned document with practical and meaningful consequences.”
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Diller said broadcasting was “unique… in its influence on our society.” The obligation for broadcast stations to serve the public interest came because of that uniqueness and “out of a true, remarkable balance and a great business model that serves in the public trust,” he said. Diller was applauded when he said raising the 35% TV station ownership cap would not be “good for the industry or the public.” He said the FCC should reinstate “some form” of financial interest restrictions on the TV networks.
Diller said provisions of the Telecom Act of 1996 were intended to provide for competition among segments of the communications industry. But, he asked, “What has actually happened? The [promised] big, great, beautiful tomorrow is gone… The government has inadvertently allowed to happen the exact opposite of what it intended to do” as an unintended consequence of deregulation. “The big, bad truth… is that the Big 4 TV networks in fact [have] reconstituted themselves into the dominant forces” that the govt. had tried to control through various restrictions adopted over the years. The TV networks formerly operated “with a real sense of public responsibility,” but that’s no longer the case, he said.
TV executives should be concerned about industry consolidation for 3 reasons, Diller said: (1) Ten years ago independent programmers provided 15 new prime-time series, last year only one. (1) Concentration of TV and radio station ownership. (3) Lack of competition -- “the oligarchy has been restored… The barrier to entry is now soaring very high… The circle of control has gotten too small.”
Diller said “there’s probably one, and only one, group that can still help to do what’s necessary [to reverse the situation]. That’s you [broadcasters]. You are the last place where the independent voice can still be heard. You're the only contingent that still has a multiplicity of players and the necessary preferences to make a difference.”
NAB Pres. Edward Fritts said the war in Iraq once again had shown regulators and the public that broadcasters were “the pillars of their communities… Broadcasting has met the test of time and relevancy in peace and war… Just as reporters are currently embedded with our military forces, broadcasters are embedded within our communities… This is what distinguishes us from our satellite and cable competition.”
Fritts said transition to DTV “has made huge strides in this past year… What we are doing is not evolutionary but revolutionary [and] a massive undertaking.” He said the NAB was working with the Commission in an effort to craft new rules “that achieve reasonable and moderate deregulation” while also protecting the “competitive balance” in today’s media marketplace.