Know which rules to break, with MTV co-founder Tom Freston

Tom Freston built a garment business in India and Afghanistan from scratch after college, grew it to multimillion dollar scale, then lost it when Jimmy Carter imposed an embargo on Indian imports. He smuggled three tons of clothes to Montreal across the St. Lawrence Seaway before returning to New York at 33, in debt and without a career. He credits that collapse with teaching him humility, improvisation, and risk tolerance, and describes the resulting orientation as bebop, meaning improvised and unconventional rather than planned.

He found his way to MTV by using What Color Is Your Parachute to identify music as his passion, then spotting a Billboard Magazine article about a planned video music channel that was specifically seeking candidates with no television experience. That hiring philosophy was deliberate strategy. MTV viewed the absence of television industry habits as an advantage for innovation, and having almost no money forced the team to find new solutions. The network needed 168 hours of programming per week and filled early airtime with public domain footage including NASA rocket launches and pre-produced music videos distributed by record labels.

Bob Pittman, who was approximately 26 years old and never attended college, led the network and taught Freston that the consumer had to come first, ahead of advertisers, cable operators, and record companies. When cable operators in the early 1980s resisted carrying MTV and objected to paying ten cents per subscriber per month, MTV bypassed them entirely with the I Want My MTV consumer demand campaign, which was considered impolite in the cable business at the time but proved effective. MTV also gave Jon Stewart the Daily Show and allowed him to pursue political satire rather than pop culture, eventually producing a franchise that included Samantha Bee and John Oliver. The network was early in bringing hip hop into American living rooms when BET and radio were not playing it, though Freston acknowledges MTV started as uncomfortably white and male.

Freston addressed diversity by tying hiring goals to employee bonus plans, and by the time he left Viacom in 2005 to 2006, roughly 50 percent of managers were women. He found that retention was the harder problem because diverse hires who did not feel comfortable in the culture would leave, making raw hiring numbers misleading. As co-president of Viacom alongside Les Moonves, he oversaw a cable portfolio that included Nickelodeon, Comedy Central, VH1, Noggin, Nick Jr., TV Land, and Country Music Television.

Freston says Viacom saw digital disruption coming but failed to act on it, which he attributes to the innovators dilemma. MTV was the canary in the coal mine because teenagers and young adults were the first audience to shift viewing time to the internet. Viacom met with Mark Zuckerberg when Facebook had nine million dollars in revenue and offered to buy the company for 1.5 billion dollars with half structured as an earn out. Zuckerberg declined. After Freston left, Viacom sued YouTube rather than acquiring or partnering with it, viewing the platform as a copyright infringement machine because users were uploading Viacom programming. YouTube is worth approximately 600 billion dollars today.

After leaving Viacom, Freston helped Oprah build her company for a couple of years, focusing on business operations including securing a Comcast distribution deal. He points to A24 as a current example of a company building a new media model by combining low-cost films, live entertainment venues, merchandise, television, and shorter form internet content. He argues that talent, including creators in the YouTube and TikTok universes, remains the center of all media change. He sees rising vinyl sales and flip phone purchases as a niche rebellion against fragmentation and nostalgia for the 1990s, though he acknowledges this may not yet represent a broad cultural shift. He says the disappearance of MTV and linear broadcast networks is not clearly a positive development for society.

On the current political environment, Freston says the rule of law is foundational to business because it ensures contracts are enforced and courts remain neutral, and he believes it is under attack. He says business leaders privately acknowledge the threat but face a collective action problem where acting alone risks retaliation, pointing to executives engaging in what he compares to cronyism he witnessed in developing countries. He is critical of the Trump administration's attacks on DEI, arguing there is a clear business case for diversity especially when programming to diverse audiences, and says fear of being labeled woke is suppressing corporate stakeholder-oriented activity. He views Milton Friedman's shareholder supremacy framework, which he notes is less than 60 years old, as having minimized the legitimate interests of customers, employees, and society.