Emphasizes Importance of Broadband Internet

BARRY DILLER DUMPS ON PRODUCT PLACEMENT

Calls Advertainment Not 'Particularly Effective'

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RANCHO MIRAGE, Calif. (AdAge.com) -- Barry Diller, chairman-CEO of InterActive Corp., warned attendees at the American Magazine Conference here not to believe
Photo: Doug Goodman
Barry Diller doesn't think product placement is effective.
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the hype of Madison & Vine-styled product-placement entertainment properties.

"I think it's ridiculous to think artful product placement is particularly effective," he said.

Blunt but humorous
Such comments typified the blunt but often humorous tone he took during a half-hour interview conducted by Newsweek's chairman, Rick Smith.

They also may be seen in light of Mr. Diller's broad dissatisfaction with the entertainment world he moved in -- and mastered -- for decades. "Hollywood is a pain in the ass," he said.

Movies today, he said, cost "such a disgusting amount of money," and require even more "stupid" money to market. Moviemaking, he added, is now increasingly geared towards selling merchandise as well as inevitable sequels to "huge elephantine movies" that have lost all sense of traditional storytelling and narrative.

And entertainment, broadly speaking, "is challenged in every way" by factors such as audience fragmentation and the rise of digital video recorders like TiVo that he felt were "not interesting challenges."

The Internet advantage
But the Internet, Mr. Diller said, gives one the chance to "make up new things" as well as giving one new ways to "get into trouble," with the benefit of no long-held structures "standing in your way."

He predicted that consumer acceptance of broadband online access would come much more rapidly than currently expected.

Mr. Diller's InterActive Corp. split off from USA Networks last year. InterActive specializes in e-commerce (a word he termed "horrible") properties and owns Expedia, Ticketmaster, the Home Shopping Network and Lending Tree, the online mortgage company.

As he has before, Mr. Diller came out strongly in favor of federal regulatory oversight of media mergers, though he termed opposing such consolidation "idiocy."

Should, for instance, News Corp. Chairman Rupert Murdoch (once Mr. Diller's former boss) be mandated to air a set percentage of independent programming on his vast distribution holdings, it "wouldn't hurt the industrial value of the company at all."

Praising Rupert Murdoch
Mr. Diller had high praise for Mr. Murdoch, calling him a "true internationalist" and "the only one who ever got it right in a clear and everlasting way."

Afterward, Mr. Diller said he wasn't interested in acquiring Primedia's New York Magazine. He declined to speculate on what quick consumer adoption of broadband would mean for media and advertising, calling it a "complex" topic.

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