Diller, Emanuel Smackdown: Piracy Is ‘the Cost of Doing Business’

Chairman of IAC contradicts chairman of WME, and says piracy has become a marginal issue compared to issues involving digital distribution

Who to believe? Barry Diller or Ari Emanuel?

Both are tough, smart sons of bitches. Both showed exceedingly dyspeptic attitudes at a panel closing the Milken Global Institute Conference on Wednesday. (Would it kill you guys to smile occasionally? This gives Hollywood the reputation it has.)

But they diametrically differed on the question of piracy and the threat that it poses to the entertainment industry.

Diller, chairman of IAC and Expedia, said that piracy has receded into a marginal issue compared to digital distribution and the rising behemoths like Netflix.

Piracy “is going to happen,” said Diller. “They’re making films available for streaming. As we go, you will see more distribution digitally. Piracy is a risk, but it’s small.”

The chairman of WME countered with Hollywood's party line:

“You can’t say piracy is not an issue,” he said. “I don’t believe it’s going away, it’s a big issue. The government has to get involved.”

But Terry Semel, who for a couple of decades ran Warner Bros. with Bob Daly before running Yahoo!, agreed with Diller.

“We should stop talking about piracy as if it’s going to kill the business,” said Semel, who was on the panel with Tom Tull of Legendary Pictures and The Hollywood Reporter’s Janice Min, still a newcomer to the business. (At one point Emanuel testily turned to her and said: “I don’t want to give you a lesson here, but the business of the movie business is DVDs.” Ouch.)

Emanuel showed visible frustration with the piracy issue, and asked why Silicon Valley hadn’t applied its collective fine mind to solving the problem with technology.

Diller and Semel poo-poohed this notion. “I don’t think there will ever be a technological solution,” said Diller. “It’s the cost of doing business.”

Diller’s and Semel's views are heresy in Hollywood.

For years the piracy-as-existential-threat has been a mantra from Burbank to Washington, D.C., as the industry’s biggest policy priority: Congress has to legislate against it; law enforcement has to devote more resources to it; citizens need to educate their children, denounce their neighbors and otherwise rid themselves of Limewires. They sued folks until that blew up as a PR disaster.

But Diller said the music industry, hit harder than movies, has been figuring it out.

And he had dire words about Netflix, too: “Netflix should spent every dollar that isn’t nailed down on content,” he said. Then he added: “They are not friends. They are not the frenemy. They are the enemy, without any question.”

(Gdawful photography by the author.)