The new digital kingpins of entertainment are reshaping the physical environs of Hollywood every bit as much as their huge investments in programming and new distribution models have turned the industry upside down.
Amazon, Apple and HBO are all building out major facilities in and around Culver City, California, long home to the sprawling former MGM lot that now houses Sony Pictures Entertainment. The big three, among the most prominent members of the streaming future, are expanding their already notable content-creation budgets as Peak TV reaches ever more stratospheric heights, and they need facilities to match.
And they likely won’t be alone in needing more room to make stuff. In just the past week, Walmart announced a deal with MGM (which does not have its own physical facilities) for content on a planned streaming service, AT&T’s new WarnerMedia unit said it will launch a streaming service in a year, and Viacom said it will produce content for Netflix.
Culver City, a suburb mostly surrounded by the southwest side of the city of Los Angeles, is ideally located for this new era. It’s close to Los Angeles International Airport, and several traditional neighborhoods or cities that have housed the L.A. entertainment business for years, including Beverly Hills, Century City and even Hollywood (the L.A. community, not the broader industry).
In a town where driving is an occupational hazard, it not only is conveniently located but also sits astride the region’s newest light-rail line, connecting Santa Monica, the USC campus and booming downtown Los Angeles. The Apple, Amazon and HBO facilities are all walking distance to a Culver City light-rail station as well as the old warehouses on Culver City’s east side. Over the past 25 years, through successive waves of change in media and entertainment, those Hayden Tract warehouses have been retrofitted to house cable TV channels, post-production and visual-effects companies, ad agencies, internet 1.0 startups, and more. You can track the successive shifts in the business through tenants such as AOL Studios and the Tennis Channel, Maker Studios, Jukin Media, Sinclair Broadcast Group’s Circa, What’s Trending and a WeWork outpost.
At the other end of the city is L.A.’s Playa Vista neighborhood, where Google runs a vast YouTube Space in a former Hughes Aircraft hangar. Neighbors include Facebook, Electronic Arts, Digital Domain, WeWork and other co-working outposts and the XPrize Foundation. Verizon executives told me they’re bringing one of their new incubators for 5G mobile technology to Playa Vista in coming months.
Northwest of Culver City is L.A’s Venice neighborhood – home to Buzzfeed, more Google, and a herd of virtual-reality companies – and Santa Monica, where Snapchat just moved next to Activision Blizzard. A mile away, AwesomenessTV and Tastemade are tucked into space near Lionsgate and Universal Music Group.
All these new corporate residents are shifting the mental and physical center of gravity of Hollywood south and west, away from the traditional studios in the San Fernando Valley and closer to the ocean, the airport and the tech upstarts.
And it’s not just Culver City and what I call the Golden Triangle of Silicon Beach that’s attracting digital players. This past week, Netflix said it would take over a 13-story office building under construction in Hollywood, just down Sunset Boulevard from CNN, more Buzzfeed and Nickelodeon, part of that big Viacom content deal.
At nearly the same time, Netflix also announced it would buy ABQ Studios in Albuquerque, N.M., and bring $1 billion and 1,000 production jobs over the next decade to the facility. ABQ is perhaps best known as home to the productions for AMC’s Breaking Bad and spinoff Better Call Saul, but also has been home to several Netflix productions and many other films and TV shows.
All the companies are racing to ramp up as competition for viewer eyeballs intensifies. Beyond WarnerMedia and Walmart, other new streaming services are coming: WarnerMedia’s DC Entertainment unit is about to launch a service. And, in one of the biggest M&A deals of the past year, Disney bought most of 21st Century Fox to fill out its production pipeline for its streaming service coming next year. (The Fox lot in Century City is less than 2 miles from the new Amazon, Apple and HBO facilities).
I talked with one top post-production executive last week whose clients include multiple shows for Netflix and Amazon, as well as for the traditional media company that actually pays his team. There’s plenty of work for everyone right now, and the pace doesn’t seem likely to slacken anytime soon, he said.
The bigger question – as the infrastructure of physical production strains to keep up with the market-building ambitions of so many big, well-funded players and would-be players – is whether these long-term investments can be sustained in an era of brutal competition for the fractured attention of so many customers. The answer to that question will determine the shape of Hollywood for years to come.
More Info: forbes.com