Sensitive Issues of Synergy

What happens when a mega-media-corporation like Viacom Inc.--which owns Paramount studios, MTV Networks and Blockbuster Video, among other things--uses its companies to promote one another?

Usually, nothing; it happens every day. Walt Disney Co., which owns ABC, for example, is a master at cross-company promotion. And Viacom has done its share; MTV staged big on-air promotions for Paramount films, including “Clueless.” And Blockbuster features in-store programming from Paramount-produced “Entertainment Tonight.” It also has shown promotional spots for Nick at Nite’s TV Land, one of MTV’s channels.

But a recent example of this “synergy” posed a prickly question for the corporation. According to this week’s issue of trade magazine Video Business, Paramount Home Video, sensitive to potential complaints from Blockbuster’s competitors, planned to cut references to Blockbuster from the video release of its recent movie “The Beautician and the Beast.”

The changes in the movie, which stars Fran “The Nanny” Drescher and Timothy Dalton, were reportedly being made to avoid friction with rival video retailers. Paramount is counting on them to buy the release.

In the wake of the magazine’s story, a Paramount spokesman said the studio will not delete the two references--a shot of a Blockbuster card and a line mentioning the chain. The spokesman called the changes--which were made in an early copy of the video, due in stores Aug. 19--an “operational mistake.”

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Sources close to the matter say the change was considered because some retailers had complained about a Blockbuster reference in “A Vampire in Brooklyn,” the Paramount Eddie Murphy picture released theatrically in 1995.

Ultimately, the company seems to have decided it’s worth risking a few complaints from mom-and-pop video stores. Blockbuster, besides being a member of the corporate family, is by far the biggest video chain in the U.S.

“Synergy” has been a buzzword in Hollywood, in the wake of huge media mergers. Combine entertainment production with distribution channels, and voila: the perfect setup to hawk your own movies and TV shows.

Disney-owned ABC has shown Disney films like “The Lion King,” and is heavily promoting this summer’s “Hercules.” Last year, there were references in several ABC shows (including “Roseanne”) to characters visiting Disneyland.

But synergy, or at least the appearance of it, can occasionally produce a backlash. “Home Improvement” production company Wind Dancer is currently suing the Walt Disney Co., charging Disney with making a “sweetheart deal” with ABC to keep the highly successful “Improvement” on its own network rather than pay open-market prices for it. Disney denies the allegations.

Blockbuster spokeswoman Cindy Cordova points out that Blockbuster isn’t only featured in Paramount movies; “The Lost World,” a Universal picture, also has a scene staged in a Blockbuster store.