To the editor:

I read Digital Media regularly with great interest and have tremendous respect for you. But I take issue with most of “The Puzzling Purchase of Paramount.”

Richard Greenberg, who does mainly title sequences for movies but also commercials including one for Diet Coke in which Paula Abdul dances with digital samples of Gene Kelly from “Singin’ in the Rain,” thinks publishing and especially licensing will be the salvation of New York as a media center. That’s his business, so naturally he’s bullish, but I agree. I also think the cost of sampling film will plummet like the cost of everything else in computing. I think video is headed the way of rap music, which is almost totally about sampling (James Brown loops e.g.).

It’s easy to see how 900 old movies and 6,000 old TV shows could pull a profit. The television syndication business is built on that assumption. Barter syndication grew by an order of magnitude to $1.3 billion in the last decade. Consumers buy the old not the new. Apart from the game and talk shows, the most successful franchise in syndication is Paramount’s infinite series Star Trek. Nothing new there. If innovation is what you’re looking for, television is the last place to look, yet every evening 65 percent of U.S. households watch TV. If we don’t rent a movie now, it’s even more likely we’ll want to rent it tomorrow, especially if we don’t have to drive to the video store. Home video is the studios’ primary source of revenue, which is why movies and TV shows are becoming indistinguishable — they’re both made for the small screen. Ted Turner went broke buying MGM, but he’d still bid for Paramount if his hands weren’t tied by John Malone. Time Warner is building a full-service network in Orlando mainly to circumvent the home video retailers. Pay-per-view is not a good business because the copyright holders don’t want to share the spoils with cable operators.

The idea of seeing old movies chopped up into video games is very compelling. That Diet Coke commercial was pretty entertaining, and it’s only the beginning. Greenberg says the video game business is the biggest piece of the entertainment business. I’ve never heard that before, and I’ve never seen a dollar figure, but it wouldn’t surprise me.

Declining ad revenues notwithstanding, owning television stations is an annuity not a liability. It’s the networks not the stations that are unprofitable. The O&Os (owned and operated TV stations) are a gravy train — especially since they’re in major markets with more eyeballs per square inch.

MTV is a perfect example of what can be gained by hyping little known artists who belong in Las Vegas. Blond Ambition? Nothing new there. David Lee Rod made a lot of money singing Gershwin while cavorting like an anti-authoritarian adolescent. Nothing new there. A remake of Tiny Tim singing “Tiptoe through the Tulips.” Innovation is one thing. Money is another. The only place they mix is in technology. In art, forget it, and yes, you’re right, hardware ultimately is not the issue.

You say QVC has a phenomenal computer network. I assume you refer to its fulfillment operation. I know it’s impressive, but I don’t see how it equips QVC for digital distribution. I’m not all that sanguine about QVC. As you yourself (I think it was you) have said, silk and burlap are indistinguishable on NTSC, and flat screen TV still cost $20,000 apiece.

I don’t think transferring a book into a CD-ROM is a quintessential case of a square peg in a round hole. After sex and conversation, print is the most interactive medium around. Are you familiar with McLuhan’s idea of the tetrad? Obsolescence, retrieval, reversal…. I forget the fourth one, but the idea is what’s old gets new again in a new context.

Denman Malroney
Vice President, Media Publications
D’Arcy Masius Benton & Bowles, Inc.
New York, NY

Denise Caruso responds: Thanks for taking the time to write. However, I take exception with nearly every one of your points — and so does everyone I’ve talked to who works with interactive media.

People whose lifestyles and paychecks depend on the continued success of old media want very much to believe that they will be able to “repurpose” archives ad infinitum and that recycling, rather than innovation, will be their bridge to riches in the new entertainment media. Those of us who have seen the results — a Coke commercial and a cult TV series notwithstanding — believe that short-term profits based on these rather gadgety approaches to digital media will spike quickly, leaving an opening the size of Texas for true innovators to enter the market.