As The World Grows Lazier, So Goes Los Angeles Sprawl
A night out with your friends will almost always feature the “new show” discussion. “Have you seen this new series on Hulu, called A Handmaid’s tale?” “Have you seen the latest season of Narcos: Mexico?” There’s a new social clout in town and it’s all about the quantity of consumption. Those who have stuck it out with House of Cards through the full six seasons are seen as warriors of commitment. Those who are dabbling with Amazon Prime’s Man in the High Castle are seen as new medium pioneers. Those who are watching Narcos and Stranger Things are just run of the mill viewers - middling in the popular shows, devoid of mystery and wonder for what else is out there. While these discussions are happening worldwide, there’s one unique place that dictates your viewing habits.
Los Angeles has always been the city that dreams up what the rest of the world consumes. Media and Entertainment have been the lifeblood of Los Angeles since the early 1900s. People flock from all over the world to come see the City of Angels and many stay in attempt to contribute to it’s future. These people are fascinated by the stars and the glitz of Hollywood, envious of the surfer lifestyle of Venice Beach and intrigued by the who’s who of the nice restaurants on Sunset - where the next box office hit movie might be discussed and conceived by two high powered agents over kale salads. People just can’t get enough of LA. Maybe it’s the desire to escape the doldrums of seasons or deep down we all think we could be part of the elite fame but whatever it might be, the world has always had a fixation on Hollywood stardom.
SOFTWARE IS EATING THE WORLD AND IT’S NOT SPARING HOLLYWOOD
The lines of Entertainment and Technology are blurring. What started as a benign DVD exchange program, has become the largest video streaming business in the US, Netflix. What began as a place for teenagers to post videos of themselves singing the latest Beyonce song, has become the major content producer of Google, YouTube. What started delivering your packages in under two days has found it’s way to deliver content right to your TV, Amazon. The major studios of Disney, NBC Universal, Fox, etc. have competition they couldn’t even dream of just tens years ago.
Netflix and Chill has officially become the sponsor for your Friday night. You no longer need to pay $5.99 to rent a movie and then consider another $8.99 purchase thereafter. You can start watching under the terms of your subscription and literally never stop - except for the five second “out” it gives you between episodes. Our attention spans are getting shorter but our fixations are getting bigger. Subscriptions for Netflix, YouTube TV and Hulu are growing, rapidly. As the growth continues, so grows the appetite for new content.
In pursuit of your attention and profit margin, the new kids on the block, Netflix, Apple, Google, Facebook and Amazon, recognize they need to produce and own the content rather than making a spread off of buying existing content. Similar to the talent grab of San Francisco tech talent, these tech companies are in a creative genius talent grab in Los Angeles. With big dollar backings and an insatiable appetite for content, a new script written by the 40 year old bachelor living in his West Hollywood bungalow might have five new bidders at the negotiation table. Where the big studios of yesterday like Disney and Fox were the rulers of Hollywood, with their gigantic studios in Burbank, Culver City, Century City and Hollywood, the landscape is shifting and it’s favoring the streamers.
SHOW YOUR FAANG’s
Facebook is not known for THEIR content - they’re a platform for YOUR content. Having bought Instagram and capturing our attention in nearly every other way, Facebook is gobbling up nearly 260,000 square feet in Playa Vista to build out it’s content business. Fresh content to feed your appetite on Instagram LIVE and Facebook Original videos, they’re giving it a proper attempt to vie for talent by establishing in a submarket that smells of fresh ocean-water and Loyola college girls.
Amazon moved early with their Prime Video roll out. While it started with streaming content from elsewhere, they have been turning their focus to premium in-house content. After the Hackman’s bought the Culver Studios in 2015, they were primed to revive the studio that brought your parents Gone With The Wind. Announced late last year, Amazon is taking the historic site and will use it for their content production. In addition to their +300,000 square feet for studio space, they’re also taking another 100,000 sf for executives as well as retail space like Amazon Books at the Culver Steps. They have been one of the biggest change agents in the hottest sub-market in LA, Culver City.
Eric, what about the other “A?” Oh you mean Apple? - Yes, almost forgot about them. They’re also battling for Culver City as their Apple Music, Beats by Dre and soon to be video content provider take up about 200,000 square feet along the Jefferson corridor in Culver City.
Netflix continues to grow like a weed and in turn they’ve staked their claim on the Hollywood sub-market as their feeding ground. Taking over anything that Hudson Pacific or Kilroy announces to build and laying claim to anything along the Vine or Bronson corridor, Netflix’s footprint exceeds 1MM square feet - space for writers, producers, editors, directors, graphic artists, engineers and more. Who would have thought that the red DVD mail-in slip that killed Blockbuster would also aim to kill the incumbents of the movie set. Netflix recently announced they’ll be showing their own content in select theaters. Expect AMC vs. Netflix as the next battle for the space fiefdom.
Google and YouTube don’t want to miss out in grabbing your attention either. They were one of the first movers to spread it’s wings in LA when they joined IMAX and took a huge chunk of space in Playa Vista. Most recently they converted an old airplane hanger into a 500,000 sf office building that will have roughly 100,000 square feet custom built for sound stages and studio space.
The Place to Be
Silicon Beach is having it’s moment and it’s all thanks to (collectively) You! For most Americans the living room is the center of their universe. That 50 inch screen sitting on the wall is the source of mental nourishment, the source of contentment, the thing that we have an unhealthy attachment towards. The addiction to content is real and to what extent that has negative consequences we will soon find out. In the meantime, working in Los Angeles real estate is probably the place to park your car…As the world becomes lazier, so grows Los Angeles!