Can This Man Save Paramount?

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Freston has been shaping kids' tastes for a quarter-century. In 1980, this former clothing entrepreneur with an M.B.A. from New York University read about the start-up MTV network (then co-owned by Warner Communications, which was later acquired by Time Inc., this magazine's publisher), applied for a job and became one of the founding executives. He oversaw properties like VH1 and Nick at Nite and, friends say, has remained true to MTV values, both personally, as a U2 fan, and as a businessman, believing that interesting content can make money. "Audiences want variety--in their television, in their video games and in their movies," says MTV Films senior vice president David Gale. "By making lower-budget movies that target different tastes, you can be successful with a younger audience. And they are the ones who go to the movies."

Kids consume the product, then sound off to the manufacturer. "If they don't like something, they e-mail us to say, 'What the hell were you thinking?'" notes Van Toffler, president of MTV Networks. "If they love it, they say, 'We want more.' Unless we're in a constant state of reinvention, we're irrelevant."

But can a cottage outfit like MTV Films be a relevant business model for a major studio? In some ways, it already is. MTV Films has been hot of late, co-releasing with Fox Searchlight Pictures cult fave Napoleon Dynamite (made for a minuscule $400,000 and earning 100 times that at the domestic box office) and backing a mainstream hit in Coach Carter ($63 million gross). MTV Films' kid sister, Nickelodeon Films, had an $85 million hit with The SpongeBob SquarePants Movie. Comedy Central is another cool brand, though its Team America: World Police belly-flopped last year. Paramount has already made some youth-oriented hits. It has a long-term deal with Saturday Night Live's Lorne Michaels, whose Mean Girls earned $86 million. Best news: each of these films cost $30 million or less to produce. The studio also has an indie shingle, Paramount Classics, and has been angling to buy Newmarket Films, which distributed the surprise smashes My Big Fat Greek Wedding and The Passion of the Christ.

Freston's idea is to ride the Zeitgeist, keep his stable of semi-indie divisions productive and use the allure of his hip brands to attract fresh, young (and, pssst, cheap) talent. "I want us to be a place where you build relationships with up-and-coming people," he says, "give them a comfortable home so they can be in your solar system." And then, the dream goes, Paramount can roll out the occasional megamovie, like this summer's War of the Worlds, directed by Steven Spielberg and starring Tom Cruise (who also has a production deal with Paramount).

"A studio is always in the business of big," says Newmarket boss Bob Berney. "But Paramount can use all the divisions it owns to bolster one another." That's Paramount's other secret ingredient: cross-marketing. The networks feed ideas to the studio, which produces the movies, which are promoted on the networks. That puts the energy in synergy. "This is not to say that under my management Paramount is going to become the MTV Films studio," says Freston. "But they will play a big cornerstone in what Paramount is going to be."