Open Exchange: Beyond the Boardroom with Jonathan Tisch

New York, NY
Season 2, Episode 4

GUEST: Barry Diller, Chairman and CEO, IAC/Interactive Corp.
HOST: Jonathan Tisch

JONATHAN TISCH: Barry you grew up San Francisco but at a fairly young age migrated south to LA.

BARRY DILLER: Four.

TISCH: A very young age, so you didn't have to help put the suitcases in the family car to drive south?

DILLER: Not really, I kind of tacked along.

TISCH: I love when you talked to Michael Eisner when you were doing the Charlie Rose show and he asked you about your college education and you looked at him and said You're post-grad, I'm no-grad.

DILLER:(laughs)

TISCH: A wonderful line, so after one semester of UCLA you said--

DILLER: I didn't even- it wasn't even a semester.

TISCH: You didn't make it through a whole semester?

DILLER: A semester, I made it like a week, two, I dont even remember, but it was so short as to be nonexistent.

TISCH: Did you call your parents and did they go Aghh, how can you not even get through a semester at UCLA?

DILLER: We did not have a family in which there were lots of bi-level, there was not a lot of bi-level discussion. The truth is actually my father realized I had not gone to school about five months afterwards, I passed him in the hall and he said Why are you here? and I said What do you mean? he said Well shouldn't- dont you go to school? and I said No, and he kept walking, that was the level of-- my parents were really lovely but they were not engaged.

TISCH: When did they realize that you were living in New York?

DILLER: I mean most people run to get out of their houses, I stayed at home until I was twenty-three and moved to New York, I never left until I moved to New York, and of course I told them.

TISCH: There are so many wonderful stories about people who've become successful in the industry, as it's called, starting in mailrooms, your close friend David Geffen started that way.

DILLER: He did.

TISCH: How did you get that first job at William Morris, was it just a cold call and say I am Barry Diller, I'm here.

DILLER: No, my best friends were the children of Danny Thomas, who's huge, not only had a big television show, but he was probably William Morris most important client. So I was really interested in the entertainment business, and I didn't want to go to school, but I did want to go to-- I wanted to learn, and I thought this was the best place to go to school. So I called Danny Thomas and I said Can I go there? and he said Yes, and the next day I went there. So it was not-- I got in lucky.

TISCH: But you also knew what to do with the time.

DILLER: I knew what I wanted to do, which was to read, and learn, the only name that I made for myself at William Morris is probably getting fired every three or four months, and only because I wanted to stay in the mailroom and I was the only person who really wanted to stay in the mailroom. I was there, I started when I was nineteen, and unlike everybody else who fought to get out of the mailroom, I fought to stay in it because I didn't want to be an agent so I wanted to read the file room, and so I stayed there for three years, reading, reading my way through William Morris.

TISCH: Could somebody do that today, could somebody at nineteen years old walk into William Morris, CAA ICM and start in the mailroom?

DILLER: No, well I think actually, I don't think it matters where you start, as to where you're going to end up. Today you have MBAs going into the mailroom, I mean you have-- now it has been so kind of honed, this process, that the requirements, the entrance requirements, are wildly higher than they were when I was there.

TISCH: Is that a good thing or a bad thing, could a Barry Diller without a college education start in todays world?

DILLER: Well, look, thered be another entrance, whatever it is youve got outs I think, so somehow there's a way, but that would not be the way today, all these things now are much too, I believe, over-organized, I mean we now-- part of progress is we know more, we do more things with more specificity, we bring all sorts of things to a task that often get in the way of the task. So I think it's some good, some bad, I don't think that, so to speak, high education, for the entertainment business is particularly helpful.

TISCH: But the companies that you ran, and it's such an incredible list, between ABC, Fox, Paramount, they have a lot of suits working in those companies, did it drive you crazy that you that you had to go--

DILLER: That I wasn't like- that I had to--

TISCH: You werent one of them, you probably wore a suit every once in a while but.

DILLER: Get my suit on, like falsely, like Superman, in reverse. No, no, because again, much less bureaucratized than-- I mean, ABC was really a candy store, I mean if you wanted responsibility, you were young and you had nothing, you just wanted it and you were around and you were eager and you seemed like you werent a total dope you could take as much responsibility as you wanted. I was running all their feature buying, they're making seventy-five movies a week, of which I was totally responsible, by the time I was twenty-five. Now could it happen today? Yes, I don't know how likely it is. So today what you do is you say Well, who's got experience? and most of these jobs have kind of experience that precedes it that is of a qualifying level. In my case, and it happened in and around my case, in lots of cases in the Seventies, 'cause this is the Seventies, Charlie Bluhdorn, whose company, Gulf & Western, owned Paramount, who I had gotten to know because I bought pictures that Charlie was trying to sell to ABC, I was a senior executive at ABC, but middle management, I was not senior management of ABC, and Charlie said I want you to be chairman of Paramount, which was a kind of absurd, crazy thing to do, my movie experience was making ninety minute really television movies. So Charlie did this act of a crazy person and gave me this job I didn't qualify for, so he would do the odd thing Charlie, but that is unlikely to happen today.

TISCH: Did you develop your management style over the years, did it start in the mailroom at William Morris?

DILLER: (laughs) I don't know that its started yet.

TISCH: Do you have a management style, do you have a business style or do you still stick to your gut?

DILLER: Well I don't know that it would be branded, I mean I think that-- look, I'm sure there is much that I could learn from some formalistic management process, with me it's been both instinctive and what I've learned by observing and the fact that I've had great mentors, I've had great people that I've really learned from.

TISCH: Who are some of those people, who are the mentors, because you're a mentor for so many other people that are now very, very well known names, who are the people that you looked to when you were in various jobs earlier in your career?

DILLER: Well certainly at ABC Leonard, Leonard, because I was in the area that movies and Leonard Goldensons history was the movie business. I now have the greatest management mentor that you couldn't even invent it, but Jack Welch is a consultant to our company, meaning that after he left GEE he said he would do this for a few companies and one of them was ours, 'cause he was intrigued with what we were trying to do. And he's so generous of his time, and essentially I think he actually runs our company, I mean when Jack comes, which he does every quarter to our business meetings, Jacks running the business, and I learn from that. It's not really comes from books, it doesn't come from study, it comes from instinct and people around you and big eyes that want to understand, and then you tailor it to your own personality because I'm never going to be Jack Welch, he is pure pitch manager, I'm faux manager, I mean and it's only out of my own, I mean you can say style, it's just what I do.

TISCH: What's so interesting is a lot of people hear you, a lot of people are scared of you, you have a reputation of being very tough, but I've known you for a long time, you're self-deprecating, you're funny, you have a way to look at things that is against this image of one of the toughest people in business.

DILLER: Yeah the truth is I got a good voice, I got a strong voice, and I love combat, and I dont mean it in a-- I mean I dont like blood sport, I mean it's nowhere near football, it's probably not even close to lacrosse, or to certainly not lacrosse, to badminton. But what I like is, and I'm incapable of not doing, is when you talk about something talk about it to try and scratch it as harshly as you can for what's really true, or what sounds true to you. And that's kind of verbal, and so it is argumentative by its very nature, it's creative conflict, I think of it as that way, there are people who really like that, there are people it scares the ass off them, in which case they shouldn't play. But it is what I do but I don't think of that as-- now it's easy for me, I guess, but I don't think of that as tough, I think of that as just the way to get to whatever you can hear is the truth of whatever the matter is. And it's process, and I love that, but as far as being tough, I've never-- there's very few tough actions that people can cite, they can't say Oh look at this list, there are all these casualties lying around, there are all this stuff, there's all this controversy, etcetera, it doesn't exist, so.

TISCH: So your image is not exactly one that jives with reality?

DILLER: Well, there's a lot of mythology, I'm not saying that I'm an easy, I'm not an easy character, just because I have my processes. Now it is not easy, I think it's fun, some other people think it's fun, other people, some people think it's a nightmare.

(music plays)

TISCH: As you look at your management style, as you create a business, as you're going out and making large acquisitions, are the people that are with you, are they you, are there little Barry Dillers?

DILLER: God help us all, no, probably, I mean no in the bad and the good, or the mixture of whatever anything is. There is though, and I think this has been true, and I think this is always true, if you have somebody who takes responsibility over a period of time people gather around that, and they have some diversity, but they gather around it because it resonates with them. And so aspects of it, aspects of your personality are, certainly if youve worked with somebody for a long period of time, you become them and they become you, and the parts that fit that way are good 'cause they're in synchronicity, and the parts that aren't are also good because they balance. So I think that it would be terrible to clone yourself, or to clone your own way of thinking, what I really like is I like-- and I dont like devils advocacy just for the big DA of it, in capital letters, but I really like contrast, so and I always want to be protected, I want to be protected from my own exuberances, or whatever you would like to call them. And so having people who say You know what, that's stupid, or as happened yesterday, one of my close colleagues said, after I was riffing off of him, he says That makes utterly no sense. And I hear that, and I try and restring it.

TISCH: Youve been referred to as a visionary many times, do you like that term? I see you just winced, so I would imagine that?

DILLER: I think it's stupid. I dont have a clue, you say to me what's around this corner, I mean I don't know, I see something and I have an instinct and that's really what- that's the value add maybe that I have, but there's no such thing that I know of seeing to any future, it is curiosity. I mean I just got very lucky in 92 when I came upon QVC by serendipity, my wife got interested in it and said You have to come and see this thing, and I went to see it and I thought Wow, I don't know how it's going to change things, but this is going to change everything, this convergence, primitive convergence that I was looking at of televisions, computers and phones. That was the epiphany, but I didn't, you know, this is in 92 and I started to play in it.

TISCH: If I remember in the research, you thought that QVC was instant gratification.

DILLER: Yeah, well I thought it was a way of using a television screen in ways I'd never seen before, I mean I knew television from making television programming, and for people who looked at it to sit back and passively view it, so I didn't know from any of that stuff. This was interactivity and I was fascinated by it and I was just wildly curious about it. And so if you would've said to me in 92 that in 95 would come this thing called the internet, which I'd out of one MIT session in the early Nineties I'd kind of learned that it existed, to use my college as the tone, that infrastructure, if you had told me there would've been a World Wide Web and an internet and all of that I would've said Oh well maybe, but I didn't have a clue. But I got interested in an area, and the area was much richer than the current facts told you, it doesn't sound like visionary to me, I mean, you know.

TISCH: It sounds like being smart.

DILLER: It sounds like being curious and interested and having decent instincts, it seems to me, and I'm not being modest.

TISCH: Now your entire corporate life is focused on companies that are web-based.

DILLER: Based in that, yeah.

TISCH: And phone, and it's the complements of TV phone, and the internet.

DILLER: Yeah, yeah.

TISCH: Is this an extension of the entertainment industry of the Seventies, Eighties and Nineties?

DILLER: When I went to QVC all my friends in Los Angeles said He's lost his mind, he's truly lost his mind. I mean I left Fox not being ridden out of town, I mean I left Fox and I left it very well, so it was not like--

TISCH: You started a network.

DILLER: It was not like I needed a job or whatever, and all of that stuff, and at that time everybody knew that other companies had said Come and run those companies, so when I didn't do any of that stuff and I instead went to QVC and they thought He's simply mad, he was going to Westchester, Pennsylvania to do what? Now that of course this beginning of interactivity for me, when you wind that now twelve years later, thirteen, well thirteen years later, and now of course given all the activities that has come out of that little germ in terms of all the internet stuff that we do and all the content in all of our internet stuff, and now that there's a broadband we can do lots of stuff in there. And now people in Los Angeles and Hollywood and everybody place else that makes content say "The promised land. And so it's actually come to that circle and now my company is reentering the, so to speak, entertainment business through this interactive door, which I'd always thought, not always from the very beginning, but once I really got on to the internet and I knew it was only a matter of time before you do video and have all sorts of rich media in it, I thought this is all going to converge and when people say to me You're out of the entertainment business, I say I'm not out of the entertainment business, you can't lose your entertainment heart, it's just a different way of playing in the vineyard.

TISCH: So you're sort of a visionary.

DILLER: (laughs) No.

(music plays)

TISCH: I've heard you talk about how Sarbanes-Oxley and other regulations coming out of the stock exchange, IRS, have made it difficult for a CEO to be a risk taker, to really take chances in todays world.

DILLER: Makes it harder, much, much harder.

TISCH: It is tough to run a public company today?

DILLER: Well my observances, we're very lucky because we're a controlled company, so not that we dont hop to all of their rules, but in fact in lots of respects, because the company is a controlled company be definition, there are several things that we dont have to do, but my observations, it's very, very hard for-- look, todays world is very reactionary in these regards and directors dont want to take responsibility, who'd blame a director for wanting to take responsibility for a mistake and get sued and go through a whole sort of horrible process. Now I dont think it's terrible but I think that a lot of the things that people that you knew over the last thirty years or so, great businessmen, and the way they did things, and it created huge value, only, I mean of course some didn't, but the ones that did were worth it. I think it's much, much harder for them to function today, and I think that's not great for America.

TISCH: But the follow-up to that or to get your thoughts, do you think it has an impact on our ability as corporate America to stay competitive?

DILLER: Totally, absolutely.

TISCH: In this global environment.

DILLER: We used to have in corporations, I mean places where there was real assets, we used to have real entrepreneurial cultures, and they get weeded out by all sorts of processes. Yes, I do think we are-- one of the great things we are losing a bit, because we dont trust, we really have now, for a whole host of reasons, we dont trust business, businessmen. Now there are some good reasons why some businessmen should absolutely not be trusted, but like anything the vast, overwhelming majority, God yes. And so in the thing of not trusting them and their actions is a loss, it's an environmental loss.

TISCH: Youve also talked about how there is an oligopoly, how all the media companies, 90 percent of the media companies are controlled by four or five companies, is that a bad thing?

DILLER: Yeah, actually I don't think it's a particularly bad thing in terms of voice, meaning there's an awful lot of diversity, it's a bad thing because it's first of all unmanageable, it's impossible to, particularly if you're going to manage them in anything but standalone holding company concepts, if you're actually going to really manage them and get the synergies, that are the only reason these companies should relate to each other, they're extremely hard to manage I think.

TISCH: Is what you're doing the future?

DILLER: No, I think there are lots of futures, I do think that there is the possibility if we dont screw up the internet and let it be taken over by toll bridges, 'cause right now it has none, it's absolutely, you know, you press a button here and you publish to the world, it's never seen its like before, it's the most important known, which is it literally between you and whatever you create and pushing the Send button you publish to the world with nobody in between. Now that's just an accident, 'cause God knows none of the commanders of the toll ways, be it cable interests, satellite interests or telco interests, would have liked that to happen and now dont want it to happen and see if they can grab it. I hope that they dont, presuming that they dont, you're not going to really need-- if you've got talent, talent always outs, but talent will out faster, easier, with less toil and trouble. I think it's ever hopeful, you just need for people to find out, and the great thing about the internet is you find out fast, without spending any money.

TISCH: And the collection of companies that you have today, I guess you find out fast if you're--

DILLER: We find out almost everything.

TISCH: Every night you know--

DILLER: We know everything (laughs), I mean not everything, there's things we dont want to know, but yeah, we know a lot.

TISCH: The change has been so rapid, and I guess the future will continue that way, probably something will be going on five years from now that we totally dont know could happen today.

DILLER: Well actually I think that while-- I think that this revolution, this radical revolution, is profound in the sense that it has been played out now only for about ten years.

TISCH: Which is nothing.

DILLER: No. I think there's about another five to ten years of big tracks being laid, after that I think itll be there, just like other revolutions were there, not what followed then was execution not invention, necessarily, so when you say, I mean who knows, I mean, but I actually think that the main, main tracks are pretty much there, there's some tinkering to do with them, but then it's the fruits of all of this infrastructure thatll be played for the next God knows how many years, so.

TISCH: It's pretty exciting stuff that you're doing.

DILLER: It's great, I want to--

TISCH: Do you love coming to the office?

DILLER: No, I hate the office, but today it doesn't matter, I mean we're here, this is an office, all we do here is spend money, there are no businesses here, all of our businesses are all around the world, the truth is it's because of all this, we're connected, so over-connected, that you dont have to be in a room with a tie on and whatever, I mean if you want to do this with people youve got to be in the same room, but other than that do I like what I do, yeah.

TISCH: Right now do you ever think about going back to Hollywood?

DILLER: No, back? You mean? Well first of all I dont like back anyway, so that would be one. No, I mean I like movies and I like television shows, actually I like some television shows better than I like most movies, the work is better, I could definitely see myself organizing some of those processes, but I ran movie companies for eighteen years, who would want to do that? I mean I'm not saying a lot of people probably want to do it having never done it before, but if youve done it for eighteen years you'd be a dull boy if you wanted to continue.

TISCH: You seem so excited about the future, youve been animated as we talk about the future possibilities out there.

DILLER: To be curious is to be lucky

TISCH: Thank you Barry.

DILLER: Pleasure.