First On CNBC: CNBC Transcript: IAC Chairman Barry Diller Speaks with CNBC’s Julia Boorstin Today
WHEN: Today, Thursday, January 9, 2020
WHERE: CNBC’s “Closing Bell” – Live from CES in Las Vegas, Nevada
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The following is the unofficial transcript of a FIRST ON CNBC interview with IAC Chairman Barry Diller and CNBC’s Julia Boorstin on CNBC’s “Closing Bell” (M-F 3PM – 5PM) today, Thursday, January 9th, live from CES. The following is a link to video from the interview on CNBC.com:
Q4 2019 hedge fund letters, conferences and more
Barry Diller discusses the future of IAC from CES
All references must be sourced to CNBC.
COURTNEY REAGAN: Well, welcome back. IAC slimming down its portfolio, announcing the sale of its’ comedy website CollegeHumor yesterday, and spinning off its stake in dating app Match in a deal that is expected to close next quarter. Joining us now from CES is Julia Boorstin with IAC Chairman Barry Diller, in a first on CNBC interview. Hi, Julia.
JULIA BOORSTIN: Thanks so much. Thank you, Courtney. IAC and Expedia Chairman Barry Diller. Barry, thanks so much for joining us here from CES. We appreciate it. Courtney just mentioned the news, just yesterday IAC announced that you’re selling out of College Humor. Tell us about what that move says about your sense of this digital video subscription space?
IAC CHAIR BARRY DILLER: Well, it doesn’t really say very much about the space itself. What it says is that we – really had this tiny thing we had – and we found that we really couldn’t compete. Because I don’t think small players can compete at all in digital media. And so, rather than continue to fight on for no particular reason—I mean, it’s not material to our company, at all. We just decided, ‘Let’s just concentrate where we can hopefully make good things happen.’
JULIA BOORSTIN: I want to hear more about digital media later. But first, to hear more about the future of IAC. You made some really big changes. You completed the sale of your stake in Match Group. And you also made this big purchase of Care.com, for half a billion dollars. What do these two deals—the sale and acquisition—say about where IAC is going?
BARRY DILLER: First of all, it wasn’t a sale. It was a spin-off. That’s what our companies do. The concept of IAC is we create companies, we get them to be of a sufficient size where they can be independent, and then we spin them off to our shareholders.
We’re kind of an anti-conglomerate. So, Match reached the stage, valued itself at, I think, close to $20 billion, that we thought, ‘This is a good thing for it now to be completely independent.’ So, we are spinning it off. Care, on the other side, which has no connection to Match, other than essentially dispose of one, get another, is – you know, when you think of Care.com and what it conjures in your imagination, is it takes care of people through technology.
So, this is an area that is undoubtedly going to grow enormously as the tech platform gets increasing sophistication, and a gig economy comes inside of it, so that if you want somebody to take care of elderly people, you want somebody to take care of your children, your dogs, or whatever, any kind of care, this is the most efficient platform to do so. We think it’s a great area for us. So, hopefully what will happen is it will grow and grow, and then, we’ll do what we do with everything: spin them off –
JULIA BOORSTIN: Spin them off. Now you’ve spun off Match—
BARRY DILLER: --or everything of real value.
JULIA BOORSTIN: Now, you have completed this spin-off of Match.com, do you think that Facebook and its move into dating will prove to be a real threat to those assets?
BARRY DILLER: Why? Why would that cause – the fact that it’s now in the hands of our shareholders, rather than in the corpus of IAC doesn’t make any difference. Facebook hasn’t – I mean, I would never discount anybody, any competition. It depends on what their innovation is. Thus far, they have not done anything that scares the horses.
JULIA BOORSTIN: Speaking of Facebook, we just ran a clip of you defending Mark Zuckerberg’s decision to allow political ads, to not fact check them. Today, they reaffirmed that commitment.
BARRY DILLER: Good.
JULIA BOORSTIN: We have seen -- we have seen Twitter ban political ads entirely and Google place limits on them. Do you still think this is the right call? Or, if you think this is the right call, are there other steps you would like to see Zuckerberg take to protect elections and consumers?
BARRY DILLER: I don’t think you can -- if you have basically free speech and you have the ability to advertise something, unless you are so egregiously over the line, you don’t have any right to censor advertising, political advertising. What -- and how are you actually going to do it? What kind of slope are you going to slide down when you say, ‘Well, you’re actually going to’ – in a promotional media, what is advertising? It’s promotion. When you promote, you tend to exaggerate, both the negatives and the positives.
Most television or most political advertising is actually negative. So, you make these arguments—these negative arguments about your opponents. How are you going to vet those? It’s impossible. What you really should do–what this country should do, is get rid of all advertising for politics.
We should have a system where in fact the government subsidizes getting the message out. We have so many actual – we have so many arenas of communication available to us that, why not simply set aside X amount of hours or days or weeks, I don’t care, it would be far less than the irritation of being bombarded by political ads, and simply have essentially free elections, free messaging from politicians, and do away with the circus.
JULIA BOORSTIN: So, entirely ban all--
BARRY DILLER: So, clearly, I’m not a television station owner—
JULIA BOORSTIN: Yes, clearly. Billions of dollars there.
BARRY DILLER: But even when I was, I advocated this. But I’ve been advocating so long, and it’s obviously—
JULIA BOORSTIN: You would entirely ban political advertising, on every platform.
BARRY DILLER: The idea that you have money in politics is simply crackpot. So, it is -- when you think about the idea that our elected officials would spend the amount of time they spend, trolling out for money to it is their message out, when we have so much available quote inventory of time to get the message out, it seems nuts to me.
JULIA BOORSTIN: Mayor Bloomberg—
BARRY DILLER: And it has very, very, very bad consequences.
JULIA BOORSTIN: Mayor Bloomberg has recently entered the race. And already been spending millions of dollars in advertising.
BARRY DILLER: Yes. Of course.
JULIA BOORSTIN: What do you think about his entry into the race?
BARRY DILLER: Well, and I have been for a very long time, I’m not only very fond of him, but I think he’s a totally credible candidate. I think he has a relatively narrow just because he’s starting late and he’s not an obvious choice. But he has a narrow corridor. But, if he performs at Super Tuesday, then I think he’s -- first of all, I think he starts as the real deal. I can’t imagine, in contrast to what we have today anybody better to conduct the affairs of this country then Mike Bloomberg. In every way: integrity, decency, smarts, a great executive, a fantastic record in New York. All of those things. You couldn’t have a better candidate. So, I’m hopeful. But—
JULIA BOORSTIN: Interesting. Now, going back to Facebook, also Google, I know you’ve criticized Google for monopolizing search, which has impacted Expedia, as well as your search assets.
IAC CHAIR BARRY DILLER: Well, I don’t criticize them. The truth is that they’re a monopoly. And, you know, when you’re a monopoly, great. The only thing that comes with monopoly -- like with great wealth, comes great responsibility. I think when you have monopoly status, you’ve really got to be very careful. Because the inevitable day to day work of everybody in your company is to extend your monopoly. For the people who depend upon it, that’s often problematic. So, I think that there will be appropriate regulation, either self-regulation, which has not yet happened, or real regulation is inevitability.
JULIA BOORSTIN: I have to ask you also about the streaming wars. Since you were last on CNBC in October, we saw the launch of Disney Plus and Apple TV Plus. We’re about to get the launch of NBCUniversal’s ad-supported Peacock, as well as Quibi from Jeffrey Katzenberg, who you’ve known for a very long time. Which of these platforms is best positioned to exceed, and will we see them drive cord-cutting or impact Netflix?
IAC CHAIR BARRY DILLER: Well, they are driving the – I mean, people cutting the cord is inevitable. It’s just going to keep continuing and continuing. It’s not going to go down to zero. But it is--so many people who have the means, would rather watch streaming television than they would linear television, which is basically cable. So, that track is inevitable. As far as who’s going to win, look, Netflix has already won. It does not mean that there could be other winners.
But if you define winning as binary, win/lose, Netflix is not going to give up very much of its lead, if ever, and I think will continue to enhance it. They’re just so far ahead in the number of subscribers, and the amount of money that they are putting into production. it’s just not possible to compete with them, I don’t believe. Nevertheless, I think Disney has done a spectacular job in announcing pricing and promoting its service.
JULIA BOORSTIN: What about the ones who have let to launch? The Peacock, Quibi’s, and the HBO Max’s—
IAC CHAIR BARRY DILLER: Well, NBC, Peacock, Comcast’s idea of ad-supported is a different than subscription pay, paid subscription. And I think it’s a smart idea. Because, first of all, it takes an awful lot less capital intensive, less investment. And I also think there are a lot of people who--given that the ad load is much less than it is on broadcast television or cable television, I think that that’s a very good scheme. So, I’m optimistic about that.
JULIA BOORSTIN: So, bullish on the ad-supported streaming. Well, I can keep asking you questions –
BARRY DILLER: What I do think is—
JULIA BOORSTIN: Yeah.
BARRY DILLER: One thing is, that I’ve been thinking about, is that we’re going to all be pretty soon disappointed in the output of this, because the truth is, it’s -- the workers are getting tired.
JULIA BOORSTIN: The output, meaning of the content?
BARRY DILLER: The actual programming. We are going to have to start to expect less. That doesn’t mean you’re not going to have a great program every once and awhile. But, there is so much pressure on what is relatively small, creative community, that the pressure on that, and just a drain of pushing it to the extent it’s been pushed, is going to reduce quality. We’ve had kind of a peak of, people have said at different times, “golden television.” We’ve had a peak of that. I think it’s going to go down from here.
JULIA BOORSTIN: So, the impact of this explosion in quantity means there will be a reduction in quality?
IAC CHAIR BARRY DILLER: Inevitably.
JULIA BOORSTIN: Inevitably. I could keep asking you questions for another hour, but you are going to go tour the floor.
BARRY DILLER: I am. I am.
JULIA BOORSTIN: Thank you so much for talking to us here at CES.
BARRY DILLER: My pleasure.
JULIA BOORSTIN: Wilf, back over to you.