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HOW MUCH ROOM IS THERE FOR BARRY?
It wasn't exactly a new idea for Barry Diller. He had first focused on the group of 12 UHF home-shopping stations owned by Silver King Communications Inc. in 1993, when he was peddling zircons as chairman of QVC Inc. Back then, Diller, the man who created the Fox Broadcasting television network for Rupert Murdoch, saw TV's future as interactive. When rival networks
were launched by Time Warner Inc. and Paramount Communications Inc., Diller predicted that neither was likely to survive.
All of which makes Diller's Aug. 25 announcement that he had bought a 20% stake in Silver King and would become its chairman all the more intriguing. What does Diller intend to do with this string of ragtag stations? Create a network. In doing so, the 53-year-old executive says he's going back to the basics of broadcasting. He plans to spend the next year or more creating local programs, sports, and news. "The stations need a voice, and we intend to give it to them," he says.
The plan: create local versions of the hip counter-programming Diller used at Fox to take on the big nets. By going local, he'll hit a market that is exploding after years of near stagnation. Already this year, local TV ads are up by a robust 9%, figures the Television Bureau of Advertising, which says the likes of Blockbuster and KFC have spent $3.1 billion in the first six months of the year.
Diller's next step may well be to restructure Silver King's contracts with the Home Shopping Network to allow more time for other programming. That's where his partner at Silver King, Tele-Communications Inc. and its president, John C. Malone, come in. For Silver King programming, Diller may eventually tap TCI's Liberty Media Corp. unit, which has vast contracts to broadcast sports programming and owns stakes in Lifetime and other cable channels. Diller also intends to develop tailor-made programs for Silver King's markets.
LOCATION, LOCATION. But Diller will need a truly magic touch to grab the attention of major-market viewers. Federal rules require cable stations to carry his channels, but to improve his chances, Diller will have to get them to give his stations prime spots on the dial. And when it comes time to launch his network, Diller will need the help of TCI and other cable operators to carry his programming to places where Silver King doesn't have stations.
Skeptics abound. "It's just so much baloney that he can start a network out of those lousy assets he's got," says Dennis McAlpine, an analyst with Josephthal Lyon & Ross. Indeed, some expect Diller to eventually take over HSN, which is 80% owned by TCI. Malone has previously offered him the job. Meanwhile, the man who once sold zircons hopes to turn his string of dowdy stations into something that shines.By Ronald Grover in Los Angeles, with Gail DeGeorge in Miami, and bureau reports