COVER STORY : THE CHANNEL THAT ATE THE WORLD : For 10 years, MTV has survived ever-fluctuating teen tastes and meager ratings to become a cable cornerstone. Now the music-video network is plugged in as an ambassador of pop culture.

NEW YORK —  The officers inside New York City police headquarters surely don’t realize it, but the rappers at their doorstep are N.W.A, a controversial L.A. group that rose to fame with “ . . . tha Police” and other songs of rage from the streets. N.W.A, whose latest album, “Efil4zaggin,” is near the top of the pop charts, is using the site as the backdrop for a segment on “Yo! MTV Raps.”

There’s no anger today, however. “Ted’s my homeboy,” says N.W.A writer-singer M.C. Ren, slapping the palm of Ted Demme, the producer of “Yo!”

Ironically, MTV once was criticized for ignoring even mainstream black performers. But its popular rap series has given many groups, including N.W.A, their first national exposure.

“MTV is cool,” Ren says. “Hell, yes, they helped us sell records!”

Endorsements for MTV come from many directions these days. The 24-hour cable network has fans on Wall Street and Madison Avenue, too. Since its debut Aug. 1, 1981, MTV: Music Television has built a billion-dollar business out of being both corporate and cool, a hip-hopping member of the Establishment.

Marrying television with rock music, MTV has given young viewers from Seattle to Shreveport, La., and from Senegal to the Soviet Union a TV network they can call their own. It is a triumph of “advertainment”--a combination of music videos that are the record industry’s commercials for its artists, advertisers’ commercials for products aimed at young people and its own ingenious promotion spots. For MTV not only sells records, it also sells MTV--as the creative reflection of what its viewers are into, or soon will be into.

“A lot of people thought MTV wouldn’t last, and now we’re accepted as an institution on the TV dial,” Tom Freston, the 45-year-old chairman of MTV Networks, observed during a recent interview in his New York office.

As MTV enters its second decade, its greatest challenge remains essentially what it has been from the start: staying in tune with a young audience that falls in and out of love with trends faster than you can say Air Jordans.

“When we started MTV, the baby-boom generation was the heart of our audience,” Freston said. “Today, there’s a new generation coming up, the ‘baby-busters.’ They look at a life where, increasingly, they live with their parents, the environment sucks, there is AIDS and they’re increasingly resentful of being handed some sort of recycled pop culture from the baby-boomers. At the same time, they have many different choices for entertainment, and the pop music world has become increasingly fragmented. We’re trying to deal with all of that in a way that makes sense for MTV. The ongoing, creative challenge for us is to stay fresh and relevant for our viewers.”

MTV so far has been remarkably successful at that task.

“There are very few things on television that have been ‘hot’ for 10 years,” observed Larry Gerbrandt, a media analyst for the investment research firm of Paul Kagan and Associates. “MTV is at the cutting edge of music and culture, and they continually have to reinvent themselves. They’ve been able to attract and keep their key demographic--12-to-25-year-olds--over a long period of time, with one generation already having moved through that ‘demo.’ ”

And they’ve done it with what by conventional broadcast standards are meager ratings. MTV’s average rating over a 24-hour period, according to the A.C. Nielsen Co., is 0.6--a figure that has remained about the same over the last four years. The highest-rated shows on MTV achieve between a 1 and a 2 rating; the lowest-rated shows on ABC, CBS and NBC generally garner 4s and 5s. (Each point represents 931,000 households.)

Nonetheless, MTV is a hot ticket because of who is in that relatively small audience.

“MTV is not for every advertiser, but it’s great for reaching the disposable income of teen-agers,” said Betsy Frank, senior vice president at the Saatchi and Saatchi advertising agency. “Teen-agers are really hard to find on traditional network television.”

With an estimated $203 million in revenue, MTV will generate about $85 million in cash flow this year, according to Gerbrandt, making it one of the most profitable cable-TV networks.

While critics debate the impact that Cable News Network is having as it spreads around the globe, MTV is quietly expanding into an international force whose cultural impact is as yet unknown. The company is wired into 201 million homes in 38 countries, with MTV channels in Europe, South America and the Soviet Union. In September, MTV will spread to Asia, adding another 33 countries, from Kuwait to Malaysia.

To keep up with--and lead--the tastes of its global audience, MTV relies on a stream of ideas from its staff and extensive research on its audience. “We have to stay very much in touch with our audience--their attitudes, feelings, opinions about issues, their tastes in music,” said Marshall Cohen, head of research for MTV. “The worst thing you can do is play something your audience is tired of: They tune you out.”

Like major radio stations, MTV does nightly “call-out” research on the music it is playing, except that people contacted hear 10 seconds of a song and then are asked whether they’ve seen the music video and what they think about the song. The network also does telephone polls and focus groups to inquire about everything from MTV programming to generational attitudes. In addition, MTV has all kinds of “informal” research available to it--from reports from the scene about what’s hot in a foreign country to a heavy volume of viewer mail and calls. “We encourage people to think of this as their network, and they call us up and write us all the time,” Cohen said.

MTV, however, does not test music it is considering playing. “We can tell if a particular genre of music is doing well in the ‘call-out’ research, but we don’t program the channel by that,” Cohen said. “A kind of music gets added when people here feel good about it. Established music is more assured of getting a higher rating initially, but we have to add new music to stay adventuresome.”

Although MTV still plays top pop hits with mind-numbing regularity throughout the day, the network has expanded its repertoire in recent years.

“I wish they’d play more alternative music, but they’re ‘breaking’ more bands today than radio is,” said Steve Leeds, a former MTV programmer who is now director of video promotion at PLG (the PolyGram Label Group). “MTV is the biggest radio station on the planet, and it’s very difficult to have a hit record without support from them. But within the context of being a mainstream service, I think they try to reach out to other sources.”

Many of MTV’s most successful programming ideas have come from its own staff of young employees. Ted Demme (the nephew of filmmaker Jonathan Demme) brought the idea of a rap show to MTV in 1988 while he was working as a production assistant there. Demme, who is white, had become a rap fan growing up with black friends in a New York neighborhood.

“Rap was pretty underground at the time, but I kept badgering them about it,” explained Demme, 27. “So they said write up a proposal.”

“Yo! MTV Raps” is now on five days a week--and it’s one of the highest-rated shows on the network.

Freston, who was part of the original team that developed MTV, is credited with running an open shop while building a successful business for Viacom International, MTV’s conservative corporate parent. “They set very aggressive financial goals for us, and we keep meeting them,” he said, smiling. “I think they understand that they’d have a problem on their hands if investment bankers were running a rock ‘n’ roll network.”

Although music videos, inexpensively packaged into series with MTV’s veejays, still predominate on MTV, the network has added several shows that reflect some of the audience’s current concerns. Its in-house news department is not only producing a daily, “Entertainment Tonight”-style rock news show but also is expanding into other areas, such as a recent documentary on race relations. The network also has done public-service campaigns about AIDS, and it promoted Shakespeare by showing Lou Reed reciting the dagger speech from “Macbeth.”

MTV continually commissions new “interstitial” programming, those super-short video artworks and network IDs that connect the music shows. These spots have played a major role in giving MTV its hip image. Some even satirize MTV critics--and some of the channel’s older viewers. One recent series of spots featured an “institute for video analysis,” where a pipe-stroking professor analyzed the sexual content in music videos. Another series featured “Randy of the Redwoods,” a burnt-out hippie character who got lost somewhere on the way to the Age of Aquarius.

“By showing something cool, we’re trying to say to viewers, ‘MTV is cool, and you’re cool for watching it,’ ” said John Payson, the 29-year-old director of network IDs and on-air promos.

The very success of MTV raises some troubling questions about this video juggernaut.

“MTV represents a sea change in media, in which a form of advertisement is perceived as entertainment,” said Stuart Ewen, professor of media studies at Hunter College in New York. “For advertisers, who have long fought ‘consumer resistance’ to ads, that’s the Holy Grail. Now, with the globalization of MTV, this powerful commercial imagery is moving into countries with cultural traditions that have not been subject to the cash standard. The message of MTV is that what’s new and modern is culture that literally ‘sells.’ ”

Freston acknowledges that there is a subliminal message to MTV, but he maintains that it’s a positive one. “MTV is a window on the Western world for a young person--in the Soviet Union, it’s one of the signs that the system is changing. On MTV you see the manifestations of Western culture in a very tangible way--the cars, the clothes, the relationships between men and women. Some of what you see is trite and pop and useless and disposable. But I think it shows viewers what they can expect from a different political system, where the individual has freedom and is charged with finding his own way through life.”

MTV executives note that their international MTVs (usually partnerships with a large media company abroad) employ local veejays and show music produced in the region as well as the latest hits from America. “We haven’t had problems with governments because of the way we’re doing our international MTVs,” said Sara Levinson, the 40-year-old executive vice president in charge of business operations. “In Brazil, MTV is in Portuguese, and half of the music is from Europe. In Japan, you’ll see Japanese groups.”

Still, with American and European pop music years ahead of the rest of the world in promoting music and music videos, it is likely that American and European music will predominate. “The international superstars--Madonna, Phil Collins and others--are known and understood everywhere,” Freston said. “As the record companies themselves become more internationally oriented, there will be simultaneous releases of records in almost every country.”

Although the debate over the sexual content of music videos largely has dissipated, the image of women in them continues to be a sensitive issue. Dave Marsh, an outspoken rock critic who criticized MTV for ignoring some black performers in its early days, now praises “Yo! MTV Raps” for having “more black voices on the air than any other TV network.”

But Marsh added, “I believe that their programming still reflects a male supremacy that is uncomfortable to watch.” The controversy was raised anew when a professor at the University of Massachusetts recently put together a compilation of music videos that he said denigrated women.

“That’s a bum rap,” Freston maintained. “There’s no question that chauvinism and sexism has been integral to rock ‘n’ roll--just listen to the Rolling Stones and ‘Under My Thumb.’ But a lot of the cliches that were born out of the heavy-metal, hard-rock genre--the girls in the lingerie walking around on a smoke-bomb set--you don’t see those on MTV very much any more.”

MTV executives point out that many female artists, from Tracy Chapman to Suzanne Vega, have gained exposure on the music network. They say that they encourage groups to get away from the heavy-metal cliches, but they don’t want to be censors. “We’re like an art gallery,” said Judy McGrath, the creative director at MTV. “If somebody sends you a painting, you can’t just say, ‘If you’d repaint it, I’d be glad to hang it.’ ”

MTV does, in fact, have a standards-and-practices department that reviews music videos and applies what it says are broadcast-network standards about language, violence and nudity. MTV once rejected a Billy Idol video that showed a woman being burned on a cross, and N.W.A does not sing “ . . . tha Police” when it goes on “Yo! MTV Raps.”

The network’s most publicized rejection, of course, involved Madonna, its biggest star. After MTV rejected “Justify My Love,” the explicit video rode waves of publicity to the top of the charts.

“If we had it to do all over again, we might have aired the video in a late-night time slot, not in prime time,” said Doug Herzog, MTV’s programming chief. “Madonna tries to push the envelope every time out. Honestly, I think we thought there was another video, that she’d say, ‘Now, guys, here’s the real video.’ ”

What will MTV look like in a few years? Freston predicts that, with audience fragmentation and the utilization of fiber-optic technology that will greatly expand the number of channels that a cable operator can deliver to a customer’s home, there are likely to be three MTV channels programming three categories of music. (The network already is experimenting this summer with programming blocks of like-minded music on MTV.) Interactive music videos and pay-per-view concerts are also being looked into, according to executives at the network.

Meanwhile, in a venture into broadcast television, MTV has produced a comedy pilot for ABC and will throw its own 10th birthday party in a special this fall on that broadcast network. But MTV executives say that they are not planning to get into broadcast programming in a big way.

In fact, for all their innovation, MTV executives are wary about venturing too far from their original franchise on their own network. An ambitious slate of comedy series (called “vid-coms”) was introduced nearly two years ago, but most soon vanished from the schedule.

“We bit off more than we could chew, trying to produce a different series each night,” Herzog said. “We’d like to develop a comedy show that’s right for us. But whatever we do in other areas is meant to ‘spike’ interest, to break up the videos. The videos themselves may change but, like radio, MTV is a timeless format. Some form of music videos will always predominate on MTV--that’s what people tune in to see.”