(FORTUNE Magazine) – THE MEDIA INDUSTRY was shaped by moguls who wanted more of everything--more newspapers, more radio and TV stations, more studios, more power. The great empire builders included William Randolph Hearst and Al Neuharth, David Sarnoff and William Paley, Steve Ross and Lew Wasserman, Walt Disney and Michael Eisner, Rupert Murdoch and--yes--Sumner Redstone. Now listen to Redstone. "The world of the conglomerate is over," he says. "Divorce is better than marriage."

It's quite a turnabout for the 82-year-old, twice-married billionaire. Redstone has always been a buyer, beginning with his hostile takeover of Viacom in 1987 for $3.4 billion. He outbid Barry Diller for Paramount, swallowed Blockbuster Entertainment, and merged with CBS in 1998--his biggest deal, at $34 billion.

Today, of course, Wall Street has turned against big media. Viacom, No. 69 on last year's FORTUNE 500, has seen its stock price go nowhere for four years. So Redstone divided his empire in January. The new Viacom, run by CEO Tom Freston, kept the MTV group of cable networks and the Paramount studio. CBS Corp., run by Leslie Moonves, took the CBS and UPN broadcast networks, Showtime cable, TV stations, radio, billboards, and publishing. The idea is that Viacom will be a growth engine while CBS Corp. throws off lots of cash and pays dividends. Redstone controls both, as chairman and a majority owner of their voting shares.

On the pages ahead, we profile Sumner's successors--the two unorthodox leaders of Viacom and CBS--and their strategies for success in the digital world.

"THE WORLD OF THE CONGLOMERATE IS OVER. DIVORCE IS BETTER THAN MARRIAGE."