Sumner Redstone, the billionaire businessman who grew up in Boston’s former West End and went on to build a career at the forefront of the entertainment industry, delivered a message to a standing-room-only crowd at Boston University yesterday: content is still king, but in the digital age, copyright is what matters.
Redstone, 84, the majority owner of National Amusements and the chairman of the boards of Viacom, the CBS Corporation, and the MTVi Group, spoke at the School of Law Auditorium about the challenges of keeping a media company profitable in the digital age and answered questions from Bill Schwartz, a former dean of LAW, and from audience members. His longtime standing as “a part of the BU family,” as LAW Dean Maureen O’Rourke said in her introduction, was established through a course in entertainment law that he taught throughout the 1980s and through his sponsorship, with Viacom, of the annual Redstone Film Festival, which gives College of Communication film students the opportunity to show their work to an audience of industry professionals and their peers and have it judged.
Best known for his mid-1990s statement that “content is king,” Redstone spoke yesterday about the ongoing threat of content piracy and offered a “digital manifesto” for the long-term success of both artists and media companies. “We are all digital companies,” he said. “We are all operating on a new plane.”
Content-driven business decisions have consistently led to successful ventures for Redstone, who got his start in the entertainment industry after a career in law and is now one of the most powerful people in the film and television industry. According to Forbes magazine, he is one of the richest people in the world as well. He got his start at National Amusements, the Dedham, Mass.—based movie company founded in 1936 by his father, and invested in companies such as Columbia Pictures, Twentieth Century Fox, Orion Pictures, and Paramount Pictures as his corporation grew. In 1987 he acquired Viacom International, owner of MTV, Showtime, and the Movie Channel, which was at the time, he said, “a struggling cable television programming venture with a few underdeveloped, overlooked assets that everyone encouraged me to sell.”
“You know, they said that MTV was a fad,” he said. “They said that Nickelodeon could never make it, because who was interested in a kids channel? I listen to Wall Street a lot, but Wall Street told me to sell MTV; they told me to sell Nickelodeon. In your life, in the final analysis, you have to follow your own instincts.”
In 1993 he bought Paramount Communications, the parent company of Paramount Pictures. Redstone’s tenure marked the start of a highly successful decade of production, which saw the company release the Academy Award—winning films Titanic, Forrest Gump, and The Truman Show. In 2000, Viacom merged with the CBS Corporation, and although the companies split in 2005, Redstone remains chairman of both.
His law career, in addition to his current business interests in the television, film, and music industries, shaped his views on the need for collaboration between major media companies in the fight against piracy and intellectual property theft. “In the long run, we must all depend on the preservation of strong intellectual property rights in order to survive,” he said, drawing a parallel between a dairy farmer who stops raising cows when he is forced to let his milk go for free, and the record industry, which he said was “drowning in milk” four years ago.
“The sales of singles plummeted 61 percent in one year,” Redstone said. “The result – just as a dairy farmer stops collecting milk he can’t sell at a reasonable profit, the record companies stopped cultivating new artists.”
He said that iTunes has “resurrected the music industry” by creating a legal, affordable, instantly gratifying purchasing system for fans. The challenge now is for the film industry to catch up, he said, and for competing companies to work together to establish new standards and practices. His digital manifesto calls for even wider use of “watermarked” content, which distinguishes between legitimate and pirated files, and for restrictions on the sale of both software and hardware tools that can be used for copyright infringement. For media companies, he said, the most powerful weapon is his old standby: quality content.
“All the technology in the world would be worthless without stories, songs, games, films, and so on. We need to redouble our efforts to create the best, most interesting, and most novel content to hold the interest of our consumers,” Redstone said. “I used to say that content is king. I tell you, there’s another king: the consumer.”