New MCA Chief Executive Frank J. Biondi Jr. said the entertainment company will explore cable and network opportunities but that a plunge into TV distribution isn't inevitable.
"I'm not coming in with a point of view that you need a franchise in cable networking or a franchise in broadcasting to be complete or to be competitive. Those are issues, but they aren't the only way to look at those issues," Biondi said in an interview.
Some analysts have suggested that MCA Inc. lags behind its competition in developing television distribution--through cable and broadcasting--to guarantee it has an outlet for its programs and film library. Earlier this year, Walt Disney Co. acquired Capital Cities/ABC Inc. for $19 billion. Fox has an established network, and Time Warner Inc. and Viacom Inc.--Biondi's former employer--are involved in network start-ups.
Although acknowledging that there is limited television "shelf space" for programs, Biondi warned that getting into such ventures can be extremely expensive and that building up a mass audience is difficult in the current environment.
Biondi's comments came the day he was hired as chairman and chief executive of MCA by Seagram Co. Chief Executive Edgar Bronfman Jr., who started courting Biondi the day he was fired in January by Viacom Chairman Sumner Redstone. Biondi was Viacom's chief executive. Bronfman also named Biondi a Seagram director.
Biondi and MCA President Ron Meyer said in interviews that they did not know each other well before Biondi began negotiating with Seagram, but they said they have become better acquainted over the last few weeks.
Meyer said he reports to Biondi, but he added that it was always his understanding when Bronfman hired him last year that a chief executive would be brought in above him.
"Once Frank became available, he was the clear choice," Meyer said.
In an interview, Bronfman said he had been considering hiring Biondi since Seagram first began exploring the purchase of MCA more than a year ago. Seagram bought 80% of the company from Japan's Matsushita Electric Industrial Co. in June. Bronfman nearly hired agent Michael Ovitz--who later became president of Disney--before hiring Ovitz's partner, Meyer, as president and chief operating officer.
"People talk about dream teams. If you look at the combination of skills between Ron Meyer and Frank Biondi, that's as close to a dream team as there is in the entertainment business," Bronfman said.
One issue Biondi confronts is the economics of Hollywood, in which movie and marketing costs have jumped considerably. Lately, Hollyood executives have complained loudly that they release too many films, which they believe leads to cannibalization in the marketplace.
However, Biondi indicated that a major studio owner such as MCA should release 20 or more films a year at minimum. MCA plans to release 15 movies this year.
"I don't know of any studio that consistently made money over the years that did less than 20 movies," Biondi said.
The main area of business that is new for Biondi is MCA's music unit, although he noted that at Viacom he dealt extensively with the business through Viacom's ownership of the MTV music channel and of Blockbuster Entertainment, which owns a music retailing chain.