Paramount Leaps Into the Interactive Fray : Entertainment: The venture into the growing CD-ROM market is the first by a Hollywood studio.

In a deal that reflects technology’s growing influence in the home entertainment market, Paramount Pictures’ home video division said Tuesday that it will begin distributing interactive CD-ROM products to computer software stores, video rental stores and other retail outlets this spring.

The first Paramount title--produced by Los Angeles-based software firm Xiphias--is based on the popular “Mighty Morphin Power Rangers” TV show.

The venture, which pits Paramount against interactive software distributors such as Electronic Arts and Compton’s New Media, marks the first foray into the rapidly expanding arena by a Hollywood studio’s home video arm.

Home video is the area of the entertainment business most threatened by new technologies that will allow movies to be delivered to the home through phone and cable lines.

Eric Doctorow, president of domestic home video for Paramount, said he expects interactive CD-ROM distribution to become a “very, very big business”--but not necessarily at the expense of video.

Doctorow said videocassettes will eventually give way to compact discs for movies as well as music, interactive games, reference and educational products. Paramount also distributes some of its movies on CD-ROM.

Several of the major movie studios have started divisions that publish and distribute CD-ROMs, but Paramount said the retail relationships already established by the home video division will help usher the shiny discs out of the Eggheads and CompUSAs where they have traditionally been sold.

Still, analysts said the company may face an uphill battle getting shelf space in the computer-oriented retailers, which are key to successful marketing in the near term.

“Just because their name is Paramount doesn’t mean their products are a shoo-in,” said Bishop Cheen, multimedia analyst with Paul Kagan & Associates. “It will depend on the quality of the content they get.”