The coronavirus epidemic forced the closure of movie theaters throughout the world, and there has been much discussion about whether the industry will recover from its 15-month slumber.
As the chairman and CEO of two Hollywood companies, Paramount Pictures and what was then 20th Century Fox, Barry Diller created a name for himself in the business. He has now declared that the industry is dead.
Diller began his career in the William Morris mailroom, progressed through the ranks at ABC, and eventually became the president of Paramount Pictures in 1974. The studio produced successes such as “Grease,” “Terms of Endearment,” and “Beverly Hills Cop” under his tenure. He went to Fox a decade later, where he oversaw the studio and founded the Fox Broadcast Network.
At the Allen & Company Sun Valley Conference in Idaho, Diller said, “The movie business is over. The movie business as before is finished and will never come back.”
“Because of streaming, because of the pandemic, because of the enormous production of longform content … the word movies — what we think of as a movie — is evolving and no longer means what it did just a couple of years ago, pre-pandemic,” Diller remarked in an interview with Kim Masters of The Hollywood Reporter on KCRW’s The Business.
Yes, the coronavirus epidemic resulted in a significant drop in ticket sales and the shutdown of movie theaters. But “it is much more than that,” said Diller, chairman and chief executive of IAC, a firm that owns Internet properties.
He hasn’t operated a movie studio since 1992, although he remains interested in the entertainment industry.
According to the Motion Picture Association’s annual THEME study, the box office market in the United States and Canada plummeted by 80% last year to barely $2.2 billion as the epidemic closed cinemas, halted production, and delayed releases.
And, as Diller pointed out, with this will come the “inevitable” closing of movie theaters, with just around 10% surviving globally.
“I don’t think there’ll be anywhere near as many as there are now. I do think that they’re appropriate … for big productions where you need sound and lights and all of that extra, and where you need a communal experience,” he said. “But I think for the normal, everything else, I don’t think you’re going to be going to theaters.”
According to Diller, streaming has had a significant impact on the film business, particularly the caliber of films presently being produced.
The 79-year-old is now the chairman of Expedia and IAC, which owns Tinder and The Daily Beast, among other companies. Diller has been a significant backer of Broadway productions and independent films directed by Scott Rudin through IAC.
Diller told the news outlet, “I used to be in the movie business where you made something really because you cared about it. These streaming services have been making something that they call ‘movies’ … They ain’t movies. They are some weird algorithmic process that has created things that last 100 minutes or so.”
He claims, large corporations have shifted their strategy to place a greater emphasis on projects that can be turned into sequels or franchises with fixed marketing expenditures and products.
“It’s a viable strategy. Certainly it was for Disney. But that strategy became pervasive [and forced] out any other strategy, i.e. the development of a number of projects,” Diller said. These shifts, along with the pandemic and the growth of streaming, have resulted in Diller’s description of “Hollywood’s irrelevance” and the feeling that “nothing lasts very long.” He also singled out Disney as an example of how the moviemaking industry has evolved to give people on the distribution or business side greater authority in deciding where a picture will be released, rather than the studios themselves.
Several media companies, notably Disney and WarnerMedia, opted last year to simultaneously release new films in cinemas and on streaming sites. This was a significant shift, and theater chains were outraged.
“There used to be a whole run-up,” Diller recalled, remembering the amount of time, effort, and money studios put on distribution and publicity efforts.
“That is a level of future accounting that I don’t think anybody has the capacity for,” he said when asked if it is worth it for everyone to go all-in on streaming. “In the end, if you posit on one side making a film, controlling it completely, selling it first to various audiences, then in all of its after markets, selling your library, doing all of this, as compared to … only selling directly to the customer, which system will, in the end, have been more profitable?
“I would argue that not only do we not know, but that I think it’s a pretty even trade, meaning I am not sure that streaming is going to be more valuable than selling your product to whomever for whatever without forcing it through your own distribution, consumer-direct business.”
Streaming services such as Netflix and Amazon Prime have invested billions in creating original content that will never be seen in a theater.
However, not everyone has abandoned the traditional theatrical experience. According to Variety, John Krasinski’s “A Quiet Place Part II,” which premiered exclusively in cinemas on Memorial Day weekend, was the first film to make more than $100 million during the epidemic.
