Diller Wants Fin-Syn

Apr 14, 2003  •  Post A Comment

LAS VEGAS-The Hollywood creative community’s campaign to preserve part of the TV networks’ schedules for independent production won a ringing endorsement at the National Association of Broadcasters convention here last week, at least from USA Interactive Chairman and CEO Barry Diller.
In fact, Mr. Diller used his keynote speech to urge adoption of new fin-syn rules and other regulatory restrictions to limit the power of broadcast and cable networks.
“The big bad truth is that … the Big 4 TV networks have in fact reconstituted themselves into the oligopoly that the FCC originally set out to curb back in the 1960s,” Mr. Diller said.
“The conventional wisdom is wrong. We need more regulation, not less.”
Under the fin-syn rules that used to be on the Federal Communications Commission’s books, networks were barred from acquiring interests in much of their prime-time programming. The rules were intended to protect independent producers.
The FCC threw the regulations out almost a decade ago on the argument that competition from cable networks would protect the programming marketplace.
Representatives of Hollywood’s creative community now want the FCC to resurrect at least part of the rules to bar networks from acquiring interests in all of the programs on their schedules.
In his speech, Mr. Diller said that since the original fin-syn rules were ejected, the major networks have beefed up their presence in the programming marketplace through ownership stakes in broadcast and cable networks, becoming “vertically integrated monoliths, acting with each other in their own horizontal keiretsu.”
Also in the interests of curbing network power, Mr. Diller advocated retention of the FCC rule that currently bars broadcasters from acquiring TV stations reaching more than 35 percent of the nation’s TV homes.
Mr. Diller also said the sense of public responsibility that once tempered the power of the major networks “simply doesn’t exist for these [new] vertically integrated giant media conglomerates, driven only to fit the next piece in their puzzle for world media dominance.”
In the wake of the speech, FCC Chairman Michael Powell said he doubted the agency would grant the creative community’s request to resolve the fin-syn issue in the agency’s ongoing proceeding on media ownership rules. But he also said the issues raised were “not trivial.”
Eddie Fritts, NAB president and CEO, said of Mr. Diller’s broadside on the networks, “I didn’t hear any action in there that I’m going to recommend to my board immediately.”
Ken Ferree, chief of the FCC Mass Media Bureau, said the agency will vote on whether to ax or relax its media ownership rules June 2 come hell or high water. “There will be no delay,” Mr. Ferree said.
As for technology news at the Las Vegas show, digital was the buzz as Disney chief Michael Eisner’s remarks outlined some of Disney’s initiatives in the space, including its plans to bring back high-definition carriage to Monday Night Football games this fall as part of the company’s ongoing transition to high definition.
Movie Beam
Disney also plans to test Movie Beam, a service through which leftover broadcast “bits” are used to download movies into set-top boxes.
On the equipment side, Sony announced customers for its long-awaited optical disc system, a camera system that allows users to record video onto a disc, one of the last steps in the transition to tapeless, all-digital news gathering.
Panasonic introduced a prototype for a similar camera system based on memory cards. The system will be available next year.
Thomson Grass Valley unveiled a digital replacement for mechanical video tape recorders called the M-Series iVDR.
Attendance at the NAB convention was estimated to be 89,000 at deadline last week, down from 92,356 last year, with much of the decline attributed to a dropoff in foreign attendance. Attendance is down dramatically from the convention’s record of 115,293 in 2000 during the height of the dot-com boom. “Considering the war and issues related to SARS, we are ecstatic with the turnout,” said Dennis Wharton, an NAB spokesman.
Daisy Whitney contributed to this report.