Destination 2017: Los AngelesBy Brandon R. Reynolds

The rise of tech has finally rerouted that Hollywood-only narrative. Google, Facebook and YouTube have established enormous outposts on the city’s west side, where startups, incubators and a large amount of venture capital have set up shop in Santa Monica, Venice and a former marshland in Playa Vista. Locally grown success stories like Snap (formerly Snapchat), Riot Games and Dollar Shave Club expand the sense of LA as a place where great big ideas aren’t just summer blockbusters. New businesses are appearing in Culver City and Pasadena (home to Caltech and NASA’s Jet Propulsion Laboratory) and downtown as well—more than a thousand companies focused on e-commerce, hyperloop transportation, virtual reality, adtech, fintech, fashion-tech (the future of clothing: everything will light up and transform based on occasion, as well as monitor your health), gaming, healthcare. And with SpaceX headquartered in Hawthorne, there’s the possible colonization of the universe, which would presumably ease the traffic problem.

Outsiders may think of Los Angeles as a long weekend that’s been going since 1781, and in many ways that’s true. But the growth it’s seeing in new industries is driven by the same forces that powered its earliest ones. “At the heart of all of it will always be that we have the largest creative class on the planet,” says Rico. If you put aside the aerospace history of the Jet Propulsion Laboratory, Boeing and Northrop Grumman, and the innovation dating back to Howard Hughes, one might say that LA’s technological Year Zero was the Snap IPO. LA became a “tech city” in March, when the Venice-based company bannered the New York Stock Exchange with its signature yellow. Nobody knows what’s coming, but Snap is in the mix for sure: quick, shareable, self-destructing video clips; a young user base; and interest from major brands looking to reach those audiences on a new channel. Snap has its challenges, of course: In May it reported a quarterly loss of $2.2 billion and underwhelming revenue and user growth. Meanwhile, Facebook continues to copy Snapchat’s features. But even if Snap’s self-destructing 10-second videos don’t become the new norm for human communication, the company is still having a profound influence on Los Angeles.

Snap is notoriously secretive, but the rumor around the west side’s tech scene (or Silicon Beach, as some call it) is that something like 130 Snap employees became more or less instant millionaires in the IPO. Even for LA, even for the tech industry, that’s a lot. Many of those people will go start their own companies, while other investors and companies will look to LA to create more businesses as talent and content and information flow from one venture to the next. That kind of success (or at least enthusiasm) creates its own energy. The neighborhood becomes an attractive place for engineers to set up shop.

For anyone starting a business, but particularly millennial entrepreneurs, the quality of life in the surrounding area is crucial. Anthony Borquez, founder and CEO of Grab Games, a developer of virtual reality and augmented reality in Santa Monica, says that developers want to be there not just because that’s where the big tech companies are, but also because of the beaches. They want to live the LA experience, Borquez explains. “They want to take advantage.”

Invariably, real estate prices on the west side have headed San Francisco-ward. But unlike San Francisco, LA has space for people and companies to set up elsewhere. Angel Anderson, CEO and cofounder of NailSnaps, which lets users convert photos into fingernail art, is based downtown, part of a tech accelerator called Grid110 that builds on the area’s fashion roots. “You’re seeing a lot of technology and startups that are natural extensions of what’s already going on downtown,” she says.

Extant warehouses are being converted to house new industries as the area becomes a hot spot for art and food cultures, and as it becomes walkable and bikeable, two qualities not generally associated with LA. Anderson points out that since Metro service expanded to Santa Monica in May 2016, downtown—once a void in the center of the city—has become more accessible to the west side as well as to the San Fernando Valley in the north and elsewhere. And since Los Angeles County voters passed a measure to spend $120 billion improving transit infrastructure over the next 40 years, the metro area may become more than a cluster of tenuously connected small towns and integrate into a more organically connected whole. Companies and employees don’t necessarily need to live in specific areas now that the commutes can be managed.

To be clear: Traffic is still soul crushing. But there are efforts to at least moderate it. LA company Hyperloop One wants to transport the millions of tons of cargo that enter at ports in Los Angeles and Long Beach—37 percent of the U.S. total—to distribution centers, thereby eliminating most of the need for tractor trailers on LA roads. Having raised some $160 million in funding, Hyperloop also aims to compete with the planned LA-to-San Francisco high-speed train that is bogged down in massive cost overruns.

As the 88 incorporated cities in Los Angeles County merge into something cohesive, a similar effect is transforming its industries. In the past, Los Angeles’ entertainment industry basically produced movies and TV shows and music and distributed them to consumers. When YouTube and social media appeared, users started producing their own content. Many of their “channels” became hugely popular, and their owners became stars. This on-demand, interactive, mobile-friendly brand of personality-driven content raises the world’s kids today the way TV raised three earlier generations of latchkey kids.

Now the entertainment industry and these content producers (YouTube stars) are merging through multichannel networks (MCNs) like LA’s Machinima or Maker Studios or Tastemade, which corral thousands of channels and offer production support and other benefits. The economics are driving a new entertainment ecosystem that will complement and possibly supplant the traditional film business. The MCNs are here, the studios are here, the entire apparatus of production talent is here. It’s no accident that Silicon Valley-based tech giants have launched outposts in LA, or that Snap is a media company as much as or more than it is a social network. If you look south from the Griffith Observatory, you can watch Hollywood and the tech industry slowly absorb one another.

It’s all about the IP—intellectual property—says Peter Levin, president of interactive ventures and games for Lionsgate and cofounder and former CEO of Nerdist. “If you’re not treating one form of adaptation as lesser than another, they can all thrive together,” he says of the way media properties swell beyond any expected boundaries. Levin has overseen the launch of a virtual reality experience based on the two John Wick movies and designed in part by Borquez’s Grab Games, as well as a mobile game based on Power Rangers that netted over 20 million downloads.

“Ten years ago, if you’d said Netflix and Hulu were going to be competitive with the film studios, you’d probably have been laughed out of a lot of rooms,” he says. Now, with “the blending of the tech and the IP, the worlds have collided in a very meaningful way. Once Google bought YouTube they were a completely different beast. All of a sudden, they’re in the content space.”

Not surprisingly, YouTube and Facebook, the MCNs, the entertainment companies, all see interactivity as the coin of the realm. Social-driven communities rise up around beloved properties, a fact the newly launched TV Time, a startup in Santa Monica, capitalizes on by creating experiences around the act of watching a show. The TV Time app tracks what users are watching and connects them to relevant content—blogs and podcasts and chat spaces—based not just on a show, but on an episode. It also offers proprietary content: TV Time has the largest Orange Is the New Black fan page (over 1.3 million users) and now a deal with actor Lori Petty to do Reddit-style “Ask Me Anything” sessions about the episodes.

TV Time originally launched as a company dedicated to making clips of shows and became about the fan communities around shows. “We started to think about how to shift our business to focus on fandom,” says Jeremy Reed, TV Time’s head of programming. No media worth its user base exists in only one place anymore.

The future of content is interactivity. That can be a chatty fan base, a YouTube star who tweets with her audience or the most ancient of future-tech, gaming. Here, too, Los Angeles is ascendant. Riot Games, Activision Blizzard, Sony and other gaming companies all have a presence in LA. These companies make online multiplayer games like Riot’s League of Legends, which claims somewhere around 100 million monthly players. There are also professional LoL players that tour the world, playing stadiums crowded with fans in the huge and ever-growing e-gaming circuit. World championships are often held in LA, teams live here and train in suburban homes, making the city home to both the producers and the global promoters of the games. (E-gaming may be added to the 2020 Olympics.)

But that’s all still just players and audiences and screens. The imminent frontier is virtual reality. Fortunes and reputations are being staked on a technology that could completely change the way stories are told (though first it needs to work out the tendency to induce vertigo). A good percentage of the operating VR companies are in LA, thanks to the city’s entertainment and video game industries. Meanwhile, the home sets like Oculus Rift—developed in Long Beach before Facebook bought it in 2014 for $2 billion—are slowly but surely working their way into people’s homes and hearts. Levin points out that the applications for VR go way beyond games—to travel, education, science, real estate. “But gamers first, second and third,” he says.

Borquez, whose Grab Games works on VR and 360-degree video, among other things, thinks “the bigger question is around AR.” He means augmented reality, where your phone or some other device acts as an interactive window onto a mediated wonderland made up of the real world supplemented with a fantasy version—such as Pokémon Go, for instance. With HoloLens, a headset introduced in March 2016, Microsoft is already betting on AR as a platform for gaming, design and communication. “When AR is ready it’s going to be so much more accessible” than the confining headsets endemic to VR, he says. The question for both AR and VR is whether we’ll all need to buy new technology like fancy eyewear (Snap already has camera-enabled glasses) or whether our realities will be augmentable from our phones à la Pokémon Go. In any event, Borquez hasn’t seen the VR game-changer yet. “Where is that super immersive piece of content where somebody invites you over to their house and you plug in and then go out and buy that hardware?” he asks.

One thing Borquez is sure of: When it does come, like e-sports and YouTube stars, “there’s a really good chance that it comes out of LA.”