It seems like the current movie business is mostly just a parasite on the back of 50 year old content (Marvel Silver age, Star Wars universe, Disney catalogs, Netflix 3rd party licensed content, et al.)
The long tail of good content is very long. I wouldn't be surprised if Casablanca still generates annual royalties in excess of it's entire original cost, 80 years later. A great movie is a piece of artwork and like the Mona Lisa centuries later, has a timeless aspect to it.
I don't disagree with Diller per se. In fact, "They ain't movies. They are some weird algorithmic process that has created things that last 100 minutes or so." is one of the best descriptions of modern film I've ever seen.
May it is just because of the limits of the article length, but I think it's far more about short form content and limits of human attention. I'd rather watch several 10-20 minute videos from niche Youtube creators in a week than one two hour movie most of the time, and I can't do both.
In that sense, Katzenberg /Quibli were probably onto something. You have to remember Diller created the anonymous content conglomerate of IAC and is commenting on Quibli from that perspective. He admits himself, at the end, that he's working on backing Broadway productions so he's not satisfied with the content landscape, either. Maybe someone will figure out what it means to make something that squares good content with the time/format demands of a modern viewer.
TL;DR: I'm sick of Fast & Furious and Marvel franchise spin offs. Feels like someone made the film analogue of discovering that kids like candy and will preferentially take it over healthier food when offered.