By Lucas Shaw
Jeffrey Katzenberg and Barry Diller both worked together in Hollywood when Diller was the CEO of Paramount and Katzenberg was head of production.
But at Fortune's Brainstorm conference in Pasadenan on Friday, the two clearly had very different ideas of how Hollywood and the New Media interact.
Diller, now the CEO of IAC, forecast the technologies would mean “creative destruction” for traditional distributors like movie studios.
“There’s a 20th century notion of the convergence of Silicon Valley and Hollywood,” he said at Fortune's Brainstorm conference in Pasadena.
Katzenberg also said at the confab that 3D TVs would appear in households by early 2010 and be usable without 3D glasses “in a handful of years.”
Katzenberg called technology “the essence of what we do” and said that if DreamWorks were a car, “then Hewlett Packard is our engine.”
The creator of that engine, HP Chairman, CEO and President Mark Hurd, echoed Katzenberg’s sentiments regarding 3D, adding that it was now all dependent on content.
“I don’t think this is an issue of the base technology,” Hurd said.
Katzenberg countered that content, as evidenced by this year’s slate of 3D movies, is at a higher level than he could have imagined.
Despite 3D’s looming invasion of the home, Katzenberg does not believe it can replace the experience of seeing a movie in a theater.
“Going to a movie theater in terms of the quality is like going to a live sporting event versus seeing it on a TV at home,” he said.
“There is no out-of-home experience that is better,” he said.
Similarly, he trumpeted his company’s sustained success in the DVD market, which stands in contrast to the industry trend.
“Our movies are not a movie purchase but a toy purchase,” Katzenberg said.
Still, the focus remained the two CEOs' collaboration and their mutual need of the other for success.
“Every aspect, every facet of our process of creating and producing digital images, which are getting more and more complex, is dependent upon not just the hardware that we get from HP but the [information technology] function,” Katzenberg said.
Describing the Internet as a system with three different revenue streams,
“In the Internet there is this mythology that it’s a free system, which of course it really isn’t and is not going to be,” Diller said.
As for where the new revenue streams come from, the former head of both Paramount and Fox identified advertising, subscription and pure pay as the three sources.
However, he clarified that when it comes to advertising, traditional advertising was already a habit on its way out.
Part of the evolution of the Internet will be different kinds of advertising, Diller said, citing the example of a Bottega Veneta ad on IAC’s TheDailyBeast.com which was “more like the art advertising you see in Vanity Fair books.”
However, unlike the agglomeration that occurred among the studios, Diller predicted the reverse – the decline of traditional distributors.
Diller conceded he could be wrong were “someone to come along and squeeze the pipe, as it was by distributors of the past, and be the toll bridge taker.”