In the nearly five years since Edgar Bronfman Jr. took 80% of a moribund MCA off Matsushita's hands for $5.7 billion, his attempts to rationalize the entertainment business have appeared, to most, to be anything but rational.

What has Bronfman done? He has, if somewhat haltingly, brought Universal's movie business back from the brink of disaster. He converted its declining TV operations -- and its valuable cable networks -- into a 43% ownership interest in Barry Diller's USA Networks with a current market value of $6.2 billion. And he turned MCA's sixth-ranked (out of six) worldwide music company into today's Universal Music, the world's biggest with a 22% market share.

Admittedly, this last accomplishment was the result of the purchase of Polygram's music business for $9.5 billion, a price that the Internet-generated convulsions in the music biz will either prove reasonable (my opinion) or a gross overpayment (the current bet in most quarters).

So, what's Hollywood's problem?

First, it can't fathom someone preferring the faintly grubby world of music to the infinitely classier movie biz. Second, Hollywood's history with Juniors has generally been not all that happy. Third, it assumes that no one can come out ahead in dealing with Diller, certainly not a relative neophyte in the twin worlds of entertainment and high finance.

Let's deal with these issues one by one. The financial characteristics of music are unquestionably superior to the economics of motion picture and TV production, especially if you care about such things as predictability, positive cash flow or meaningful market share.

HOLLYWOOD'S PROBLEM with the genealogical basis of Bronfman's career trajectory is somewhat understandable, as once upon a time studio executives had to outflank a succession of sons/daughters, nephews/nieces and assorted in-laws to get to their exalted positions. The possibility that a crown prince could actually be smart, perhaps even very smart, was never considered a shrewd bet. Yet I'd argue that the evidence to date on Edgar Jr. is preponderantly positive.

As for the facile assumption that Diller must have gotten the better of young Edgar, that view appears to be predicated partly on Barry's deserved reputation for smart and tough dealmaking. What it overlooked is the non-cynical possibility that the complex deal that transformed Diller's distinctly down-market Home Shopping Network into today's Internet and cable-powered USA Networks could be, mirabile dictu, good for both sides.

This company, of which Universal is by far the largest shareholder -- and holds an option to raise its interest to 50+% under certain conditions -- is a very attractive collection of businesses, only some of which date back to the MCA patrimony.

USAi's Home Shopping Network, despite its limited penetration in Brentwood or the Upper East Side, is a $1.2 billion business with strong growth and the highest margins of any retailing business -- at least for legal products.

Thanks to its 1999 acquisition of Hotel Reservations Network for $200 million, USAi now owns an Internet-based business for about eight times last year's EBITDA, a bargain by any standard, and an absolute gift by the still-inflated yardsticks of the Internet.

IF THAT IS AN EXAMPLE of what Diller can do for his shareholders, chief among them Bronfman, then putting a significant chunk of assets in his hands in return for equity in his overall enterprise strikes me as smart.

As for Wall Street, why does it appear skeptical of the Bronfman-led Seagram's?

While the stock was up more than 50% in a three-month period beginning in late 1999 on takeover rumors, it has given up half those gains in recent weeks after the company appeared to close the door on any sort of transaction that would give Wall Street the instant gratification it invariably seeks.

Perhaps part of the Street's problem with VO (Seagram's downright quaint ticker symbol) is the continued inclusion of the spirits business in what is otherwise regarded as a media conglom.

While the wine and liquor business has been the essence of non-growth for Seagram, it still throws off large amounts of cash on a steady basis. That's not a bad thing to be paired with entertainment businesses, particularly motion pictures, which, at least periodically, are major absorbers of cash.

The value of free advice is well known. Unsolicited free advice is worth even less.

NONETHELESS, I'LL BRIEFLY ENLIST in Bronfman's army of unpaid advisers with the following: Stop listening to Hollywood. Stop listening to Wall Street. You might even stop listening to the platoon of consultants crawling all over your various businesses. Just do what makes sense to you and continue to build an entertainment powerhouse for the long term.

Seagram's market cap was about $11 billion when you embraced MCA and jettisoned your minority interest in DuPont. Today it is more than $23 billion. If you can now just figure out how to turn the Internet into the music industry's friend instead of its enemy, I think that number could be far higher in not too many years.

(Roger Smith is a former industry exec who now heads the Gotham-based consulting firm of Roger Smith & Co.)