Who'll be wise to tap Freston as free agent?

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CHICAGO -- Tom Freston's valuable connection to the youthful consumer driving media's tech revolution will make him an important candidate to become the creative leader of a rival of Viacom, the company where he nurtured the MTV culture but from which he was jettisoned last week.

But that is only if a new employer is wise enough to tap Freston for his classic strengths, such as providing an incubator for creativity and energizing a team of executives and producers to think outside the box. His track record of developing lucrative media platforms reflective of youth's daring edge is being nibbled by a few nagging questions as Freston departs his short-lived post as president and CEO of Viacom and the big boss of MTV Networks, the place he worked for 26 years.

Did Viacom lose the bidding for MySpace.com 18 months ago because Freston and his executive team underestimated its importance, or because Viacom remained too conservative in failing to match News Corp.'s price for the social networking Web site? Freston's remarks to me late last year suggest both, which means Freston has become as much a victim of his own lack of foresight as a scapegoat for Sumner Redstone, Viacom's impatient chairman.

Regardless, Freston's career contacts, reputation and knowledge will serve him well at any media company serious about capturing fickle young consumers whose command of digital broadband technology is challenging media's resolve to reinvent itself. Freston could be a hero at NBC Universal, which is struggling to stay abreast of cyberchange by revamping its iVillage and CNBC Web sites and jump starting its other digital ventures in an effort to quadruple its related revenues to about $1 billion by decade's end.

Freston also would be a fitting creative corporate partner to forward thinkers at News Corp.'s Fox Interactive Media, led by Ross Levinsohn, whose idea it was to pursue MySpace. News Corp. has been the only media company to break out of the pack with the acquisition of MySpace, where it gingerly tests modes of advertising and commercial fare so as not to jeopardize the Web site's forecasted $800 million-plus revenue by decade's end. News Corp. is smart enough to recognize that a full leap into the new-media era cannot successfully occur without creative leadership, which is why the company might yet find a way to bring Freston on board as it seeks to fortify its younger-skewing cable and broadcast networks, films and Web sites.

Freston also could be a top creative executive addition at Time Warner. With all the talk about Time Warner chairman and CEO Richard Parsons having run his course, and with the company's stock languishing, Time Warner should shift to a focus on the next generation of leadership. While Time Warner president and chief operating officer Jeff Bewkes has the revival of HBO and the steady management of the Turner cable networks to his credit, it is uncertain whether he or any of the next-in-line media guard has the right stuff needed to successfully vault their companies into the digital broadband era.

Even new media giants like Yahoo! or even Google could make handy use of Freston's unparalleled connections and insights in forging the next phase of interactive content and commerce.

Freston, 60, who concedes he is more of a genuine music junkie than a buttoned-down corporate CEO, said last week he wants to become part of "a maverick organization, left to center, with a good, honest product."

Meanwhile, Freston's forced departure at Viacom will leave a big void. For two decades, he has been the creative heart and soul of MTV Networks and the reason why the cable programming unit's annual $3 billion in earnings on $7.3 billion in revenue is rivaled only by ESPN.

Redstone's hand-picked new chief executive Philippe Dauman, and Dauman's long-time partner Thomas Dooley, now chief administrative officer, will govern the media giant with Wall Street- and Internet-related dealing savvy -- as well as stringent balance sheet management -- that they demonstrated as senior Viacom executives in the 1990s. It is unclear, however, who at the top will nurture Viacom's creative legacy and resources. The financial engineering expertise of Dauman and Dooley will able them to more adeptly take Viacom private or to market if the company's stock price and Wall Street standing don't improve, baring any emotional attachment of controlling shareholder Redstone.

For now, sources close to the new Viacom regime say it may soon pay as much as 35-times value for the irreverent, advertising-supported, video-sharing Web site Heavy.com to demonstrate its resolve to acquire new-media companies. With the likes of Facebook, YouTube and Bebo now going for billions of dollars, the days of getting into the new-media game at a reasonable price are long past.

But Viacom has yet to effectively integrate its maturing cable networks with the new-media Web sites it has been buying up the past year (save its new MTV Networks video clips arrangement with Google), underscoring the challenge and complexities of creatively bridging old-media wealth with new-media ambitions. That is the paramount challenge not only for Viacom but all major media concerns as they stubbornly remain fixed on quarterly earnings results and stock price while wrestling with changing economics and ways to score creatively in a new digital interactive age.

Although MySpace best embodies that new standard and represents the consumer free-for-all most media companies blindly discounted for too long, it is by no means the only game in town. The fate of MySpace and its social networking rivals is determined daily by erratic young consumers who are giddy with their own digital power and that of their flashy new devices.

The anticipated introduction this week by Apple Corp. of new portable, possibly wireless PC-TV interface devices with larger screens and a movie download service will advance the streaming video frenzy to new levels as it reeks havoc on exhibition windows, price points, marketing strategies and overall competition.

User-generated and controlled content, already influential in its nascent stage, is about to become the absolute force to be reckoned with in the media and entertainment worlds. Doubters need only look at Fox Interactive Media, which is worth nearly $4 billion based on the $1,6 billion News Corp. has invested to acquire MySpace and other properties, according to Bear Stearns analyst Spencer Wang, even though the struggle continues with how best to integrate commercial and user-generated content.

Clearly, the dearth of creative leadership at the very top of all media companies, that is bold enough to reshape traditional content and to respond to newer forms like user-generated fare, will prove to be the industries' Achilles heel over time--which makes Freston's Viacom fate so perplexing. Film studios, television networks and production companies are searching for creative catalysts as an edge in a kinetic marketplace where the competitive rules have been redrawn.

Redstone proclaimed years ago what remains true today -- content is king -- which raises the question: Who on the media playing field is fit and motivated enough to advance commercial creativity to effectively spar with user-generated content? It is one of the salient questions dogging media conglomerates as their aging founding chairman such as Redstone and News Corp.'s Rupert Murdoch struggle to come to grips with the fate and future leadership of their empires. Astute money managers are easier to find than creative sparks.

While there are many skilled creative executives at many levels of leading media companies, there clearly has been a brain drain at the most senior level. Having creative vision, energy, skills and connections at the very top of the executive heap is becoming a rare and valuable commodity that eventually could cost industry players the chance to translate their existing content treasures to a new-media space, where they also must create a generation of content and interactivity.

Constructing and executing a strategy for creativity and content in the digital space is lacking at all major media companies, which is why Freston's abrupt exit is disturbing not only for Viacom, but for the entire industry.

At a time when creativity must learn to flourish in new-media parameters, media companies are placing too little emphasis on innovative management of their artistic troops and resources. They do not have a firm grip on the younger consumers now calling the shots by providing spot-on personalized content, commerce and communications.

Not meeting these challenges soon, due to the absence of next generation visionary creative leadership, will make all media giants more vulnerable to a new round of corporate takeover, mergers and acquisitions.

That process may not take long to get under way considering the intensifying speculation about a well-funded company such as Comcast seizing on the vulnerabilities of leading content-led concerns like Time Warner, Viacom or NBC Universal to seek a merger with one of them before it is beat to the punch by another well-heeled player like Yahoo!

Such a dramatic restacking of the media deck will be hastened by the serious void in creative leadership. It is a problem that is not being addressed within the corporate hierarchies of media giants. Sadly, if the Freston situation is any indication, it is a problem that is not even understood.
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