High in the Frank Gehry–designed IAC building on the West Side Highway, floor-to-ceiling windows flood the offices with blinding sunlight in the afternoon, which is when Barry Diller takes a seat to answer some questions. Wearing a light-gray sweater and black driving loafers without socks, his blue eyes alert behind delicate gold-rimmed glasses, Diller looks younger than his 70 years, probably a product of a life lived equally in the professional realm and aboard the Eos, his 305-foot yacht named for the Greek goddess of the dawn. This curvaceous concrete-and-glass building resembles a ship, when you think of it, sails to the wind, and in the hallway a large replica of a sailing yacht rises from a carpet—a reminder, in case you forgot, that you’re about to meet the guy with the enormous yacht.
Intimidation has long been one of the primary tools at Diller’s disposal, helping him become one of the greatest media and entertainment deal-makers of the last half-century. A second-generation Austrian Jewish kid brought up in Beverly Hills, Diller never bothered to graduate from college, heading instead to the William Morris Agency mailroom, where he arrived shortly before David Geffen in the early sixties. Three networks were set in stone, and he soon left for the weakest, ABC, which he upended as vice-president of programming in the late sixties, masterminding projects that remade TV, like the “Movie of the Week” (he chose Aaron Spelling and Steven Spielberg, both in career infancy at the time, as producer and director) and the mini-series, like Alex Haley’s slave drama Roots, which broke ratings records. From there, he headed up Paramount Pictures and did a stint at 20th Century Fox before collaborating with Rupert Murdoch in 1986 to once again overturn the television order by building the country’s fourth network, Fox.
In the nineties, chafing under Murdoch’s thumb, Diller shocked Hollywood by leaving for the far less glamorous pastures of QVC. Since then, he’s been his own boss at IAC, buying and selling web-based companies from Ticketmaster to Expedia, Match.com, and CollegeHumor (Diller stepped down from the CEO role two years ago but remains as involved as ever). IAC resembles a Berkshire Hathaway of Internet companies, a cheap acquirer but stable and growing. Diller spends most of his time focused on the media and entertainment business: a mobile-technology incubator, Hatch Labs; the free-content service Vimeo; Electus, a TV-production company run by Ben Silverman, which has had success with Mob Wives and Fashion Star; and CollegeHumor, co-founded by Josh Abramson and Ricky Van Veen, with whom Diller just made a feature film, for the first time in years, and for a very different sum than in his heyday—it’s estimated to be a few million dollars.
Like so many venture capitalists and web companies involved in the race to transform TV, Diller has long been interested in an online TV alternative, and it’s not a surprise that the one he chose to invest in is so much craftier than anyone else’s. Aereo manufactures and stores dime-size antennas that receive anything you can get over the air without paying extra (e.g., NBC, CBS, ABC, PBS) and sends it to a device of your choosing (iPad, iPhone, computer, TV) to watch or record for later. (Aereo operates in the New York market, and the antennas are stored in a Brooklyn warehouse.) It’s live TV, whenever and wherever you want it—more nuanced than watching network TV through a digital antenna on your mantel, and way less expensive than basic cable, which offers the networks alongside a dog’s breakfast of channels most of us never watch.
If this sounds straightforward to you, you’re wrong—the networks, which receive fees from cable companies for their content, are currently suing Aereo, claiming that it hijacks the broadcast signal. Aereo says its subscribers, who pay $12 a month, have a right to this content, because each subscriber rents an individual antenna. The networks say the antennas are a phony pretext, and it makes more sense to think of the service as many individual streams, not antennas. “This isn’t technical innovation—this is business by loophole,” says a network executive in a brusque and angry tone. “It’s a scheme, jerry-rigged, baloney. Dime-size antennas sitting in a warehouse in Brooklyn—can you even say that with a straight face?” They’re wary that there might be a bigger play at work: Diller might eventually take this content, hire directors, producers, and actors to make some new offerings, and create a new digital network of his own. “Barry says this is just about viewers having choices,” says another executive. “I’d like to rent a couple rooms on his yacht, because people have choices.”