SUN VALLEY, Idaho (Reuters) - Barry Diller, the consummate Hollywood dealmaker who revamped the TV business in the eighties, is back in the media spotlight after a New York judge threw out an injunction against Aereo, the online TV service he backs.
Broadcasters including ABC, CBS, NBC and Fox had sought to stop Aereo from streaming free-to-air programs to phones, tablet computers and other devices for just $12 a month. But the judge on Tuesday rejected the bid, setting the stage for a trial.
The concern for industry insiders and investors is that if new services like Aereo are a success it could upend the $100 billion dollar pay-television industry for the both programmers and distributors as customers drop cable packages for more affordable services.
The decision suddenly makes Diller, IAC/InterActiveCorp chairman and veteran dealmaker, a controversial media player once again.
Diller is attending the Allen & Co event with fellow moguls who are also plaintiffs against Aereo including News Corp chair Rupert Murdoch, Walt Disney CEO Bob Iger and CBS Corp CEO Les Moonves.
In an interview with Reuters, he insisted Aereo would not change the television landscape he helped establish while at Hollywood companies like Paramount and Fox.
"The next step is we now offer the service to consumers as an alternative," he said.
Diller said he doesn't expect anyone with a vested interest like the traditional TV business to like it.
"If you're a consumer and you'd like an alternative to paying for cable or for paying for satellite and you want to receive free broadcast signals, which is your kind of native American right given that the public owns the airwaves."
The broadcasters said the decision was just one step in a long process and were confident they would prevail in the end. "It's not even the first inning," CBS Corp CEO Les Moonves told reporters.
Diller said the networks had not reached out to him. He said in response to Moonves comments: "It's over."
Another danger for the TV business was raised by Time Warner Cable CEO Glenn Britt who pointed out the case could have significant implications for the requirement of "retransmission consent," when cable operators must pay broadcasters to send their signals.
"If (Aereo) is found to be legal, then the idea of consumers having to pay for otherwise free broadcast signals is called into question," Britt said.
Retrans fees have been a lucrative new source of revenue for broadcasters like CBS and Fox in recent years -- and have been a source of contention for the cable and satellite companies that have had to pay, leading to blackouts for consumers.
Liberty Media Chairman John Malone cheered the ruling and his former partner and adversary. "Good for Barry. I love the concept because it will ultimately defang broadcast retransmission, which I always thought was one of the worst decisions of the government. It gave way too much power to the broadcast network owners," he said.
But he added: "Unfortunately I think the net effect of it, if it really does get implemented … will be to cause the broadcast guys to just take the important programming off their broadcast networks and put them on their cable networks. I think it's a whole lot of noise which ultimately won't change things much."
(Writing by Yinka Adegoke; Editing by David Gregorio)
(This story was refiled to fix typo in first paragraph)