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Diller tells Hollywood not to rush to Net

The USA Networks chief executive has advice for the entertainment industry as it races to build convergence models for the Internet: "Relax."

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Diller tells Hollywood to relax
Barry Diller, CEO, USA Networks
LOS ANGELES--USA Networks Chief Executive Barry Diller has advice for the entertainment industry as it races to build convergence models for the Internet: "Relax."

"Hollywood is going to Silicon Valley because they think they need each other but they don't know why," he said in a keynote address at the eighth annual Internet World conference held this week at the Los Angeles Convention Center. "They're rushing helter-skelter into each others' businesses worried that the great dance will pass them by."

The sagging economy will likely stifle creative talent and force companies to rush to solutions that seem popular for the moment, he said.

"You have to have the patience to relax instead of hyperventilating and chasing the crowds," he said.

As high-speed Internet access proliferates and with the AOL Time Warner merger sealed, the promise of a mass market for interactive multimedia appears to be closer than ever. But as publishers race to digitize novels and movie studios hurry to distribute films online, many questions about whether such a model will work remains unanswered.

Simply putting the same content online will not excite consumers and could result in failure, Diller said. He equated it to the early days of television when studios transferred radio programming to the tube. Before long, television became its own medium with its own programming that did not resemble what was airing on the radio.

"Movie studios and book publishers are repackaging their work for the Internet creating a multimedia picture puzzle without understanding the properties," he said. "They behave as if they expect all of these properties to fit."

USA Networks, a media and online commerce company based in New York, is focused on the new convergence of information, entertainment and direct selling. Diller points to the Home Shopping Network as an example of a successful convergence model.

"It's not TV but it is, it's not retail but it is, and it's not advertising but it is," he said.

Diller, an entertainment industry veteran, rose to chairman and chief executive at USA Networks after serving as chairman of the Home Shopping Network. He started his career at ABC in the late 1960s, becoming president for feature films.

He went to Paramount Pictures, guiding the studio through blockbuster hits like "Saturday Night Fever" and "Grease." He then went to Twentieth Century Fox and eventually helped launch the Fox television network.