An Old Fox Learns New Tricks: BARRY DILLER

He created a fourth network and mastered the Hollywood power game. Now Barry Diller is betting on TV's interactive future. )

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Barry Diller is sitting at his regular booth at the heart of the Four Seasons grillroom, basking in attention. Even in the headiest of Manhattan's power lunchrooms, Diller, with his bullethead and designer-mogul aura, manages to draw a crowd. Henry Kissinger nuzzles onto his banquette for a brief chat; other members of the business and media elite stop to pay homage. To each, Diller offers a greeting or a quip, then gets back to his enthusiasm of the moment. He is talking about home shopping.

"It's a direct, honest way of selling goods and services," he says. "You can see the product, get a lot of information about it, and order it with no- nonsense swiftness. Compare that with going to a suburban mall. It's getting close to being no fun at all."

Home shopping? Is this Barry Diller, the manic madman who has fascinated and frightened Hollywood for more than two decades? The charismatic celebrity addicted to power and partying with people who appear boldfaced in Women's Wear Daily social columns? And why is he spending three days a week in a sprawling office park in the exurbs of Philadelphia, surrounded by wildlife photos and a bank of nine video screens? "Home shopping is the very beginning of a whole new world," he says, as he bounds around his second-floor office while assistants teach him about things like product markups and order processing. "But it's interesting enough to me in its present borders. And I'm going to learn it down to the hubcaps."

Barry Diller inspecting hubcaps: it's a sight strange enough to cause a pileup of rubberneckers on the Santa Monica Freeway. Last February he resigned from one of Hollywood's most powerful posts -- chairman of 20th Century Fox and mastermind of the Fox network -- because he wanted to run his own company rather than continue as a hired hand in Rupert Murdoch's media empire. Hollywood assumed he would return as the head of another studio or perhaps a network, and he did have some exploratory discussions about buying NBC. But when he announced his new venture in early December, it came as a shock. Joining forces with two cable-industry partners, Diller took over QVC, a cable home-shopping channel.

The spin doctors could have been cruel: one of Hollywood's biggest, baddest power brokers resurfaces as head of a rinky-dink cable outfit that hawks kitchen knives and costume jewelry. Yet the move was hailed as a stroke of visionary genius. QVC, Diller announced, would be the basis for a multimedia company poised to exploit all the new technology soon to transform TV: fiber optics and digital compression, which will multiply the number of channels available, and two-way capability, which will allow viewers to interact with the TV set. Home shopping, Diller promises, is just the first of a vast array of things people will be able to do over the TV of the future, from ordering programs to paying bills and calling up the morning newspaper. "It's coming, not 10 years from today but sooner. And what's going to help it along is someone who doesn't understand the technology and never will. I'm in the camp of people who can't work their VCRs."

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