A New Multimedia Strategy Is in the ‘Works,’ Thanks to Playa Vista

Much celebration has accompanied DreamWorks’ decision to build its movie studio at Playa Vista.

Rightly so, DreamWorks promises a state-of-the-art digital studio, employing over a thousand high-paid, well-trained Angelenos. And an innovative DreamWorks will provide a competitive spur to the dense cluster of world-class entertainment firms in Southern California.

But less attention has been paid to the innovations in the city’s strategy at Playa Vista, and the hoped-for impact of that strategy on Southern California’s multimedia industries.

Not well-known is the fact that Southern California is now home to the world’s second-largest cluster of multimedia firms, virtually equal in size to the cluster in Northern California’s Silicon Valley.

The Southern California cluster is made up of a wide range of firms--from digital effects studios to video game developers to edutainment publishers to a handful of large interactive divisions of the major studios. Some firms are well-known (Davidson, Virgin Interactive, Seventh Level); most are not. In the aggregate, however, 200 multimedia firms are employing several thousand highly paid (average wage exceeds $50,000) and well-trained people. Multimedia firms are small (median employment: fewer than 10), and rely heavily on subcontracting and joint venturing. As a result, industry employment patterns are flexible and adaptable to rapid changes in technology and consumer tastes.

Northern California’s multimedia firms are similarly small and agile, although more oriented to business applications than Southern California, which is more oriented toward entertainment. And Northern California’s cluster enjoys a rich web of public and private collaborative support groups designed to promote multimedia prosperity and growth. Initiatives of such groups as the Bay Area Economic Forum, Joint Venture: Silicon Valley Network, and the Bay Area Multimedia Partnership include new entrant mentoring, venture capital networking, a world trade center to facilitate small-firm access to export markets, and work force enrichment.

Unlike Northern California, Southern California has historically not developed the public and civic infrastructures needed to support the financing, work force, export and networking needs of its disparate and geographically dispersed multimedia firms.

The actions of Mayor Richard Riordan, Councilwoman Ruth Galanter, Gov. Pete Wilson, County Supervisor Deane Dana and other public officials signal a new and much-needed public focus and strategy for Southern California’s multimedia cluster. And, while media attention has tended understandably to focus on DreamWorks, the city’s strategy is broader and more far-reaching.

First, the city has explicitly identified the entire cluster of entertainment, media and technology industries as critical to its future economic growth.

Second, the city pointed out that the broad-based development represented over 8,900 permanent jobs in media technology, services and manufacturing (only a portion of which is represented by the DreamWorks studio), and over $2 billion in direct and indirect economic output in the city.

Third, the city designed its multipronged incentive package as a catalyst not only for Playa Vista but also for L.A.’s multimedia industries generally. The city endorsed a jobs-based incentive package applicable to the city as a whole. And, importantly, the city endorsed the development of a new citywide classification that will lower the tax rate for all multimedia firms.

The City Council is clearly seeking to promote Playa Vista as a “center of excellence” for the region’s converging entertainment and technology firms. Playa Vista promises to house not just the state-of-the-art DreamWorks studio, but also a cluster of other advanced entertainment and technology firms in fields as diverse as computer graphics (Silicon Graphics), digital post-production (Digital Domain), telecommunications infrastructure (GTE) and systems integration (IBM).

And, with the involvement of UCLA and USC, there is no doubt an expectation that Playa Vista will house education, job training and other support services “wired” to the needs of the firms at Playa Vista and elsewhere in L.A. Clearly, the City Council’s expectation is that Playa Vista will become an “incubator” to take the formidable entertainment and technology strengths of Southern California into the 21st century.

More broadly, the jobs-based incentive package and new multimedia business tax classification are aimed at providing a spur to this entire sector throughout the city. Other cities in L.A. County would be wise to look to the city’s leadership here.

Other signs exist that the private sector is beginning to develop the civic infrastructure needed to address the financing, work force and information exchange needs of this new industry. The region’s educational institutions are focusing on the sector; research at USC’s Entertainment Technology Center is proving the feasibility of an online electronic infrastructure for the entertainment industry; UCLA’s Center for Digital Media conducts a high-level annual conference for entertainment and technology executives; the Assn. of Motion Picture and Television Producers is working with the Bay Area Multimedia Partnership on mechanisms to develop advanced digital skills in the multimedia work force.

There is no question that Southern California has a long way to go. Much needs to be done by both the public and private sector in the areas of “friendliness” to new small businesses; venture financing support; work force skills development; and information exchange.

But, importantly, the city’s action to help bring the Playa Vista Entertainment Media & Technology district on line signals that the public sector is ready to become proactive and work with the private sector in designing an aggressive multimedia economic development strategy for Southern California.