A new push by newly cash-rich technology giant IBM Corp. into Hollywood is in the offing as sources close to the company say former AT&T multimedia exec Richard Selvage will be named to the post of president and general manager of Big Blue’s media business.
Industry observers say that as IBM’s Hollywood liaison, Selvage will be seeking high-profile co-ventures to link IBM’s computer hardware, software capability and high-speed data communications technology with entertainment, advertising and media companies – a more public version of the behind-the-scenes role he played at AT&T.
IBM declined to comment on the move, but a spokesman at the company’s Armonk, N.Y., headquarters said, “IBM seeks a leadership role in the emerging market where telecommunications and computing are merging.”
Insiders say Selvage will set up shop in L.A. Selvage was not available for comment.
Under chairman Louis V. Gerstner Jr., IBM is emerging from several years of financial crisis, executive reshuffling and deep staff cuts. The company has $11 billion in cash reserves and 1994 results released Jan. 23 showed $64 billion in revenues, and the first increase in revenue since 1990.
With plenty to invest in new ventures, significant revenues and a global reach, IBM is well-positioned to become a major player in media.
Other high-tech companies have already staked claims in Hollywood. Silicon Graphics Inc. has a leading edge in computers used to create digital visual effects in movies. Pacific Telesis, Nynex and Bell Atlantic have a $300 million joint venture with Creative Artists Agency. Microsoft is moving into the animation arena and CD-ROM production and is also rumored to be in joint-venture talks with CAA. And, of course, Japanese techno-giants Matsushita and Sony each own studios.
IBM also has a somewhat embarrassing Hollywood past to overcome. Revelation in 1993 of an IBM plan to deliver CDs electronically through in-store kiosks at Blockbuster caught the music industry by surprise, spurring Sony Corp. president and CEO Michael Schulhof to call it “a major gaffe,” and bar Sony’s Columbia and Epic labels from participating. A much-ballyhooed courtship of Time Warner in 1992 led nowhere.
Nevertheless, IBM has quietly retained Hollywood ties and is partnered in Digital Domain, the f/x house founded by James Cameron, Stan Winston and Scott Ross.
IBM media ventures that might find new life under Selvage include:
* Kaleida Labs, a joint-venture with Apple to create software tools for the manufacture of multimedia;
* A partnership in ICTV’s interactive trials on Cox Cable in Omaha, Neb.;
* IBM’s Multimedia Publishing Studio, the Atlanta-based CD-ROM unit that recently released “The Playboy Interviews: Three Decades”;
* Prodigy, the 11-year-old online computer network owned by IBM equally with Sears, Roebuck & Co., that counts over 1 million subscribers. The service is the second largest after CompuServe, but has never returned a profit and is losing ground to rival American Online. It faces a big challenge from Microsoft’s upcoming online service.
But Prodigy’s staff cuts, a redesigned interface and its newly unveiled “net-browser” that gives easy access to the Internet indicate IBM’s re-awakened interest in the service. A Prodigy spokesman would not comment on recent reports that IBM was seeking to buy out Sears.
Selvage served as VP of interactive multimedia services under former AT&T multimedia chief Robert Kavner, who is now an exec at CAA. During two years as AT&T’s emissary to the entertainment industry, Selvage met with studios, agencies, producers and multimedia companies in an effort to marry AT&T technology to entertainment.