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A Promising Marriage

August 23, 2003

Not all Hollywood marriages of entertainment and technology have been happy. Arguably the most embarrassing unions in this rush to "convergence" were a series of business ventures launched by major studios in the 1990s to distribute content over the Internet. By 2001, nearly all the ventures had flopped. This month, however, there have been encouraging signs that Hollywood is nurturing more mature and sustainable partnerships between old and new media.

Two weeks ago, Electronic Arts, one of the largest designers of video game software, announced that it was moving its headquarters from Silicon Valley to Playa Vista to create a luxury campus with amenities that haven't been seen since the end of the dot-com era.

The Times reported last week that Beverly Hills-based RightsLine had developed software to help media firms use the Internet to make their libraries more accessible to other distributors and to squeeze more sales out of their assets. With the new program, for example, would-be buyers can search National Geographic Television & Film's digitized collection of about 100,000 videos, view and select the footage that suits their needs and fill out a license application online.

Finally, as Times staff writer Alex Pham reported Monday, top brokers such as the William Morris and Creative Artists agencies recently have established or expanded technology divisions to connect video game developers with movie writers, musicians, actors, directors and producers.

For The Record
Los Angeles Times Wednesday August 27, 2003 Home Edition California Part B Page 12 Editorial Pages Desk 1 inches; 36 words Type of Material: Correction
Tech revival -- A Saturday editorial incorrectly said Electronic Arts was moving from Silicon Valley to Los Angeles. The firm is building a "creative campus" in Playa Vista, but its headquarters will remain in Redwood City.

Los Angeles has been the world capital of convergence since 1992, when another video game leader, Activision, also moved from Silicon Valley to Los Angeles to take advantage of the area's creative talent, from animation and special-effects artists to Caltech engineers and software experts from the remnants of the defense industry.

Electronic Arts makes no secret of its reason for relocating in Los Angeles. As spokesman Jeff Brown recently put it, "The only reason we want to be closer to the film business is so we can steal their employees."

There are reasons to think that these focused ventures will succeed. One is the spread of broadband connections. A rarity when schemes to distribute movies over the Internet were launched in the early 1990s, they are commonplace today. Another is the growth of PC-based games: Sales rose by 8% last year, and Wall Street expects double-digit growth annually through 2005. The studios, with escalating production costs and star salaries, could use the cash from licensing hit movies and TV shows to game developers. In turn, game makers gain an average of 35% more revenue from software based on Hollywood hits than from other games.

One relocation does not a recovery make, but it is a sign of Southern California's underlying economic strength, the engine most likely to pull the state out of debt.

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