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The Voice of Hollywood Shows Signs of Cracking

Entertainment: Media companies' competing interests threaten a lobbying alliance.


WASHINGTON — When an influential U.S. senator introduced legislation last month to help entertainment companies block unauthorized downloading of movies and music, the Motion Picture Assn. of America--the official voice of major Hollywood studios--dutifully presented a united front and endorsed the bill.

Behind the scenes, however, the carefully crafted statement of support was the subject of painstaking negotiations, bickering and a flurry of tense meetings and conference calls by the companies' chief Washington lobbyists, who were anything but united.

The internal jostling over the copyright bill is the latest sign that the traditional Hollywood alliance in Washington is starting to fray. Major studios, once unified on Capitol Hill, are increasingly at odds over legislative strategies and government regulation and, occasionally, with one another.

"I keep telling everyone that no matter how powerful they are as a company, no one is powerful enough to face the government alone," MPAA President Jack Valenti said.

The divergent viewpoints reflect the new realities of the entertainment business. Gone are the days when the studios simply made movies. During the last few years, MPAA members have evolved into mammoth media conglomerates with international operations and competing interests beyond their filmmaking operations.

AOL Time Warner Inc., for example, not only makes movies but is the country's largest Internet company and the second-biggest cable operator. Sony Pictures' parent also is an electronics giant. Walt Disney Co., Viacom Inc. and News Corp. have substantial broadcast operations. Vivendi Universal is the world's largest music company.

During his decades-long tenure as the industry's leading voice in Washington, Valenti never has confronted such fractiousness. His strong personality and stature often have kept the studios from splintering.

"But it's getting harder," he said. "No question about it."

The clashes in Washington are becoming more frequent and public.

Disney, for example, actively lobbied government regulators to kill or modify the AOL merger with Time Warner two years ago, saying the combined company's cable and Internet operations would give it an unfair advantage.

News Corp., meanwhile, is fighting to kill the attempt by satellite broadcaster EchoStar Communications Corp. to acquire DirecTV, which News Corp. wants to buy itself. That has been painful to Vivendi, now an investor in EchoStar.

When the Federal Trade Commission blasted the industry for marketing R-rated movies to teens, the studios were unable to agree on a unified response and Disney was accused of trying to upstage the others by rushing out with a separate set of marketing guidelines. The disagreement among the companies prompted a scolding from lawmakers during Senate hearings.

"They were all over the map," recalled one congressional staffer.

The strong personalities of the key entertainment lobbyists--a mix of attorneys and former political aides--also have complicated relations among the entertainment companies.

"We're a family that can have dysfunctional moments, though I wouldn't call us a dysfunctional family," said Matt Gerson, head of Vivendi Universal's Washington office, who increasingly finds himself mediating among the different factions. Lately that means smoothing clashes between AOL and Disney.

Gerson said many of the companies, including his own, are rethinking old policies and positions as their businesses grow and diversify, leading to some disharmony.

Vivendi's recent acquisitions of and EMusic, for instance, have made the company more sympathetic to calls by other online music providers to streamline music licensing.

"As we get into these online services ourselves," Gerson said, "it causes a different perspective in how we look at these issues."

Gerson, a former aide to Sen. Patrick J. Leahy (D-Vt.), often uses his old skills as a political strategist, working behind the scenes, nudging one side or another toward compromise. He also has a special bond with Valenti, thanks to a stint at the MPAA in the early 1990s.

"Jack's role isn't so much to be a Michael Corleone. It's more like Michael Brady," he said.

Frequently joining Gerson in the role of MPAA centrist is Viacom lobbyist Carol Melton. It may be no coincidence that she and Gerson have sat at the MPAA table the longest.

Melton, who spent a decade at Time Warner before taking the helm of Viacom's Washington office in 1997, is seen as a focused pragmatist.

"To fight each other on Capitol Hill or any other forum does not increase your chance of success," she said. "I've seen the importance of staying balanced and levelheaded. You rarely accomplish your objectives without building a consensus."

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