Paramount Gets Its MTV

As chairman of MTV Networks, Tom Freston sets a tone for his workforce of mostly 20- to 30-year-olds that’s deliberately free from corporate rules and financial pressures.

“There’s no dress code,” he likes to say, “but there’s no full-frontal nudity.”

The 58-year-old Freston’s unorthodox style has produced profound results: MTV Networks has redefined television for every generation over the last two decades. Its channels -- MTV, Nickelodeon, Spike TV, Comedy Central and dozens of offshoots -- have turned out irreverent, risque and sometimes crass hits that include “South Park,” “SpongeBob SquarePants” and “The Osbournes.”

Now, having built MTV Networks into a highly profitable force, Freston is being pressed for an encore that could change the face of its parent, Viacom Inc.

He recently was handpicked by Viacom Chairman and Chief Executive Sumner Redstone to reverse a cold streak at Paramount Pictures, one that has cost the studio a huge bonanza in DVD sales. Should Freston succeed, he might star in an even bigger role: filling Redstone’s shoes as head of the third-largest media company when the 81-year-old steps down as planned.

The opportunity opened up this month when Viacom President Mel Karmazin quit after a power struggle with Redstone. Freston was named Viacom’s co-president, along with CBS Television Chairman Leslie Moonves.

Both wanted to oversee the studio, but the prize went to Freston, whose insights into young consumers -- the world’s most avid moviegoers -- could give Paramount an edge.

“He’ll bring an MTV sensibility to bear to marketing to a youth market that you have to grab by the throat because they’re pulled in a million directions,” said Paul Dergarabedian of Exhibitors Relations Co., a box-office tracker. “With Freston’s pedigree, there’s no denying he has a leg-up in this arena.”

MTV Networks isn’t exactly known for highbrow fare but has given Viacom more influence over the fickle young audience coveted by Madison Avenue than any other media giant. While broadcasters have watched young viewers tune out, MTV Networks has tightened its grip on 18- to 34-year-olds, accounting for 23% of their viewing, according to Merrill Lynch.

For 12 years, MTV has been the most-watched channel by 12- to 24-year-olds. Nickelodeon’s draw with kids has made it cable’s No. 1 channel for eight years. Comedy Central’s foulmouthed “South Park” and its subversive “Chappelle’s Show” have been neck and neck as cable’s most popular prime-time show, and its Emmy-winning “The Daily Show” is the primary news source for young adults.

Freston’s MTV Networks has produced 28 lower-budget films for Paramount, including such big moneymakers as “Jimmy Neutron,” “Rugrats Go Wild” and “Jackass: The Movie.”

Reaching 400 million viewers worldwide, MTV Networks, run by Freston since 1987, is worth about $37 billion, more than twice that of CBS Television, according to Morgan Stanley.

“Very few people have come to grips with how culturally significant MTV Networks is,” said Robert Thompson, head of Syracuse University’s Center for the Study of Popular Television. “They’ve hit it in the heart of every demographic group they’ve gone after. We should be paying closer attention to people this powerful.”

In an industry filled with limelight seekers, Freston has kept a low profile. That has helped the cable group, as well as Viacom, from becoming a bigger target than it has been for critics.

“It’s especially ironic that MTV represents this rebellious, anti-establishment attitude, yet is part of a huge corporation,” Thompson said. “It’s a brilliant sleight of hand.”

Of Freston’s collection of channels, MTV has drawn the most criticism. The channel has long been on the hit lists of many parents because of certain shows deemed to glorify sex, underage drinking and cigarette smoking. Advocacy groups including Mothers Against Drunk Driving and the Parents Television Council have targeted the channel, particularly because of its popularity with preteens.

“There’s a growing anger in this country about eating disorders, precocious sexuality, childhood obesity, alcohol use and the link with marketing,” said Harvard psychologist Susan Linn, who contended that MTV Networks was as much to blame as the advertisers on its channels. “It’s unchecked, unregulated, and it’s time we started looking at it.”

The din reached an all-time high this year when singer Janet Jackson bared her breast during the Super Bowl halftime show, which was produced by MTV. The incident unleashed a bruising backlash including demands for tighter TV indecency controls.

Freston insisted that MTV knew nothing of Jackson’s plan and that she acted on her own. He said the period was a low point in his career.

But he is generally unapologetic. MTV channels mirror society, he said, and most parents are simply out of touch. “You’re trying to be innovative and experimental, and when you tread in that territory, you are going to upset somebody,” he said. “We try to be as responsible as we can. But the beauty of being on cable is that you don’t have to please everybody.”

He said he had never prevented his sons, now 14 and 19, from watching any MTV Networks show. And he added that no advertiser had ever pulled out because of programming.

Noted media buyer Stacey Lynn Koerner, “These advertisers aren’t looking to impress parents.”

In fact, Freston said his crowning career achievement was that MTV Networks’ spirit hadn’t been crushed over the years by external pressures.

“MTV Networks is a creative powerhouse all over the world and hasn’t become a stiff, MBA-driven entity, even in these days of media consolidation,” he said.

For a guy who would rather hang with rock stars than corporate suits, Freston’s new job could be his biggest test yet.

Viacom’s stock is at a two-year low because emerging technologies threaten to curtail the growth of traditional media. Sluggishness at units such as Paramount Pictures also is dragging down the company.

Unlike the cash-gushing cable business, moviemaking is wildly volatile, faced with soaring costs and piracy.

Freston also must take on Paramount’s pent-up culture. Although the studio’s tightfisted spending has made it profitable, critics say its aversion to risk is alienating talent.

“If you deem a culture to be unhealthy, how do you change it?” Freston asked after a day with Paramount studio Chairwoman Sherry Lansing. “You don’t just come in and fire everybody.”

Freston said he would rely on a philosophy from MTV Networks.

“A creative-first orientation, coupled with financial prudence, is an irrefutable formula,” he said. “It’s always worked for me.”

In the cutthroat entertainment industry, where executives revel in the shortcomings of their rivals, Freston seems to have few detractors. His competitors say they admire his eye for talent, the iconoclastic culture he’s crafted and his tightknit, some say cliquish, team, led by two longtime lieutenants, Judith McGrath and Herb Scannell. The two are in line to succeed him at the cable group.

At MTV Networks in Viacom’s Times Square headquarters, “creative first” is a well-worn mantra, code for the priority on ideas and risk taking over profit motives, insiders say.

The offices are a cultural immersion in each channel’s world. The original kitchen from “The Honeymooners” sits in the lobby of TV Land. Conference rooms are shrines to the ‘50s, ‘60s, ‘70s and ‘80s.

Black walls and rock posters give MTV’s offices a dormitory feel, while rubber flooring and bright colors turn Nickelodeon’s into a romper room.”You want people to be on a crusade,” Freston said. “I believe in individuality, and if the whole place were standardized, it would feel Stalinistic.”

Freston hands authority to creative executives, who run each channel, shadowed by financial partners who shape business strategy.

The rank and file have a big say. When Albie Hecht took charge of Spike TV, a new channel aimed at men, he gave all comers three minutes to make a programming pitch, banging a gong when time was up. He gave the green light to three ideas.

Partying is uninhibited too. At one Florida retreat, the tequila flowed as Redstone, his cable executives and advertisers danced on tables. Two staffers had sex at one holiday bash in plain sight, chalked up by their bosses as an antic of youth.

A world traveler who loves a good time, Freston manages with a light touch and a disarming wit. He gave his executives trendy sheepskin Ugg boots as gifts in December.

He’s no pushover. “You have to be on your game,” said McGrath, a 23-year MTV veteran. “He sets high creative standards, and he’s never satisfied.”

Freston is probably the executive Redstone most trusts, born of a bond forged in 1987. Then a wealthy theater owner, Redstone was embroiled in a vicious takeover battle for Viacom against its existing management. Dissatisfied with his penny-pinching bosses, Freston, then co-president of MTV Networks, defied orders forbidding contact with Redstone.

He secretly met the mysterious investor at his hotel and told him about cable’s exciting future. The following day, Freston gave his future boss an early-morning tour of MTV.

The gamble paid off when Redstone won one of the biggest takeover battles of the decade and named Freston CEO of MTV Networks. Although bankers had pushed him to sell Viacom’s money-losing cable properties, seen as passing fads, Redstone invested heavily instead.

“I believed that MTV was a cultural channel, more than just about music, and I believed in Tom,” Redstone said. “He combined a passion with a cool, down-to-earth style.”

“One thing about Tom is that he has the respect and affection of the people who work for him,” Redstone said. “He’s a lot like me.”

The son of a New York public relations executive, Freston grew up in the ‘60s and graduated first in his class of MBAs from New York University in 1969.

After a stint in advertising, he quit to travel and wound up manufacturing peasant-style clothes in India and Afghanistan for export to the U.S. He returned seven years later and joined MTV’s marketing staff a year before its 1981 launch.

These were cable’s earliest days, and the channel’s coming-of-age determined the playbook for MTV Networks, from its creative fearlessness to its fanatical devotion to its audience.

“We thought, ‘Let’s have a different look; let’s be subversive,’ ” Freston recalled.

MTV brought a new marketing sensibility to television, wrapping music videos with logos, graphics and on-air messages that conveyed a cohesive image, hip and defiant. Its attitude, style and fast-cut editing changed the face of television, cinema, advertising and music.

The “I want my MTV” slogan, selected by Freston, became the chant of a generation. “MTV was the fuse that lit the cable revolution,” Thompson said.

To keep restless young viewers from getting bored, the channel moved beyond music videos into original programming.

Lacking money to hire writers and actors for a soap opera for teens, MTV in 1992 created “The Real World,” filming seven cohabiting strangers and their drinking, smoking and sexual exploits. “Reality” television, all the rage today, was born.

MTV’s drive to be ahead of the curve led to other hits. Programming chief Brian Graden chased Johnny Knoxville for three years before the backyard prankster agreed to do the show “Jackass.”

A year ago, when MTV noticed teen males were leaving TV to play video games and surf the Net, it developed a block especially for them, including “Punk’d,” that became No. 1 with the age group.

Some pundits credit MTV with teaching kids important life lessons, like tolerance. “Real World III,” in 1995, was one of the first TV shows to address HIV, when likable Pedro disclosed his diagnosis. “These socially positive messages ride in the Trojan horse of bad behavior,” Thompson said.

MTV President Van Toffler said, “If we start coming off like their parents, kids aren’t going to listen to us.”

Freston requires each channel to push social initiatives that, Redstone says, help deflect criticism. MTV campaigns for safe sex and voting, and VH1 raises money for music in the schools.

Freston said Nickelodeon was high-minded from the start in 1979, committed to making shows not just to sell toys. Over the years, the channel has responded to a clamoring for its characters, becoming the world’s sixth-largest licensing group. “The toy chest is part of kids’ lives,” Scannell said. “It’s another connection point with our audience.”

“SpongeBob” products alone have generated $1.4 billion in retail sales, fueling criticism that Nickelodeon pushes consumerism and junk foods.

But Scannell says it has been a catalyst for change with regard to childhood obesity. Nickelodeon talks up the benefits of exercise on the air. Obesity is a theme in its programs. Research has been shared with advertisers such as Kraft that are bringing healthful foods for kids to grocery shelves later this year.

As MTV has become a mega-corporation of its own, preserving its renegade culture has become a challenge.

An authoritarian rule took hold at VH1 several years ago, derailing ratings, insiders say, citing one policy requiring that all offices be white.

To resurrect irreverence, Freston plucked a new chief, Christina Norman, from MTV’s promotions group. Her first act: painting her office burgundy.

She credits VH1’s rapid rebound to “ripping away the rules.”

Freston plans to send some quick smoke signals of his own to reawaken a passion for moviemaking at Paramount.

He acknowledges, though, that turning around a channel is different from fixing an asset with a long and storied tradition. “I’ve got to take the temperature. I don’t know how people will respond if there’s a more open atmosphere.”

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(BEGIN TEXT OF INFOBOX)

Tom Freston

Position: Co-president and co-chief operating officer, Viacom Inc.

Age: 58

Education: Bachelor of arts, St. Michaels College, 1967; MBA, New York University, 1969

Accomplishments

1980: Joins MTV’s founding executive team after reading about the new venture in Billboard magazine.

1983: Named vice president of marketing for MTV; spearheads the popular “I want my MTV” ad campaign.

1984: Takes over marketing for Nickelodeon, giving the children’s channel a hipper image that immediately lifts ratings 30%.

1985: Named senior vice president and general manager of MTV and VH1, a new channel given to cable distributors for free if they agreed not to carry a new rival music channel from Ted Turner.

1986: Named president of entertainment for MTV Networks.

1987: Promoted to president and chief executive of MTV Networks.

1989: Becomes chairman and CEO of MTV Networks.

1990: MTV moves beyond music into original lifestyle programming.

1991: Comedy Central formed by the merger of comedy channels owned by MTV and Time Warner’s HBO.

1992: MTV pioneers “reality” TV with the show “The Real World.”

1996: MTV Networks launches TV Land using reruns from the Paramount vault. It creates MTV2 as an outlet for music videos.

2000: Viacom merges with CBS, giving MTV Networks two new cable channels, the Nashville Network and Country Music Television.

2002: MTV hits pay dirt with “The Osbournes.”

2003: Viacom buys out Time Warner’s 50% stake in Comedy Central, which is then integrated into MTV Networks.

2003: TNN is relaunched as Spike TV, the first channel aimed exclusively at men.

May 2004: MTV Networks unveils plans for Logo, a network for gay viewers.

June 1: Becomes co-chief of Viacom.

Sources: Who’s Who, Viacom, Celebrity Biographies, Times research