D11: The Future of Television

The future of television is "Internet-centricity," IAC Chairman Barry Diller said, while CNN Worldwide President Jeff Zucker said he wanted CNN to be essential no matter what device you use. These comments came in a joint interview on the future of television at the AllThingsD conference today.

Conference co-host Walt Mossberg asked Diller if his Aereo service is charging people for things that used to be free and he replied that companies charged for antennas for a long time and Aereo isn't charging for content. He wants to move the centricity from fixed line or satellite systems to Internet-protocol systems. "Any incumbent wants to guard their wall," he said, and he expected the networks would be upset. Even so, the lawsuits against the company have helped publicity. Right now Aereo has only a very few customers, but will spread out to 22 cities in the next six to eight months.  

He called cable "a great closed system, as long as it lasts," and said 90 percent of subscribers support ESPN, which is only watched by 10 percent of the people. "I don't think closed systems are going to last," he said.

Zucker, who also had a big run with NBC, said broadcasters will want to be paid for their intellectual property and if they don't get paid for it, they won't continue to produce the content. Diller said they are entitled to make money through advertising, but the deal is that free over the air broadcasting will be advertising-supported.

Diller thinks Aereo will appeal to young people who don't now support cable, as the idea of these people paying thousands of dollars a year for "a package of television channels you don't watch very much" is ludicrous. "I don't think of moving the money out of broadcasters," Diller said.

He pushed à la carte systems over packages, saying one of the advantages of the Internet model is that consumers can deal directly with content providers. Zucker said this won't happen very quickly, but Diller said we were "at an inflection point" of that changing. In the long run, if Aereo can get into 15 to 20 million homes, Diller said the company can offer its own programming.

When asked about the polarization of cable news, Zucker said Fox News and MSNBC have become political news channels, not news in general. And other channels are so focused on Washington and politics that they haven't covered the many big non-political news events well over the past two months, which is why CNN has gained audience in that period. But he also said CNN needs to bring in new viewers with shows such Anthony Bourdain's Parts Unknown.

He acknowledged that CNN made a mistake in its reporting of an arrest after the Boston Marathon but corrected it within 45 minutes, faster than its competitors. 

"At the end of the day, we don't care which platform you get CNN news on," Zucker said, whether it was television or a mobile platform. He is "very pleased" about where CNN is digitally. Boston was the biggest single week in the history of CNN Digital and more people learned about the incident from CNN digital than from any other digital platform. He acknowledged that television is the biggest source of advertising today, but that some young people aren't paying for cable. CNN is eventually going to have to monetize its content across all platforms, he said.

In response to an audience question, he agreed protecting the brand is important, but said that getting ratings are important as well. Coverage of the "Carnival poop cruise" was good because it was a human-interest story. "Not all the drama is in Washington," he said.

On other topics, Diller said "I can't imagine any of you enjoy the navigational system of cable." He thinks Apple, Amazon, Roku, and the Microsoft Xbox could be players in reinventing television. The cable system had outlived its usefulness, thanks to the Internet, but it has only been a couple of years since you could easily connect a large screen to the Internet.

Diller agreed that his purchase of Newsweek for the Daily Beast was a mistake, and said Newsweek belongs in a more diverse publishing company. It's taken a year and a half of focus away from the Daily Beast news site, he said.