Barry Diller is a media legend, a former Paramount CEO and USA Network mogul who helped launch the Fox television network. As chairman at IAC, he's currently heavily involved with two major ventures in digital media: the news site The Daily Beast and the controversial internet television service Aereo. In an interview with Bloomberg TV, Diller discusses both his recent investments and how digital technology is transforming the news and entertainment industries.

"I understand broadcasting," Diller says. "No incumbent wants anyone in. That is an unbreakable rule." Aereo, he says, has the opportunity to participate in an emerging "radical revolution" in digital video, enabled by new bandwidth availability and changing customer behaviors. If 10 to 20 million households get tired of increasing cable fees and find Aereo's proposition of digital access to network broadcasts worthwhile, the company will be "very profitable," easily outstripping the cost and hassle of continued litigation with those same television networks.

Aereo as it exists is legal, argues Diller; the real danger to its future is that the networks' complaints will lead to a hostile intervention from Congress. "My attitude has been to jump into something that looks difficult and is against what people think will succeed and plant my little flag," says Diller, adding that "sometimes it gets kicked."

As for The Daily Beast, Diller acknowledges a big technological misstep. "I wish I hadn't bought Newsweek. It was a mistake," he says. "Printing a single magazine is a fool's errand if that magazine is a newsweekly." Luxury and niche magazines, Diller says, can continue to survive in print, supported by advertising and a lack of real competition, but not news. Digital media means that news, even a magazine-style blend of news and opinion, can be deployed in real time, making "newsmagazine" in the traditional print-centric sense an "odd phrase." While Diller says the now all-digital Newsweek/Daily Beast has a great team behind it, "I don't have high expectations."