HOLLYWIRED: Hello, Cash Cow in the Sand

by , Feb 20, 2014, 11:06 AM
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"Who needs Silicon Valley when you can have Silicon Beach?" Google crowed after it took over the famous Frank Gehry-designed “Binoculars” building in Venice Beach a few years ago, inspiring a wave of tech companies to set up shop in what is aspiring to be Palo Alto south. Although technically there is no silicon in Silicon Beach, the name has stuck and the place has become a hotbed for tech majors and startups, but it's also an incubator for modern marketing.

Yes -- I’m talking about the amazing growth of independent non-holding company-beholden creative shops with oddball names like Zambesi, Pitch, Mistress, Omelet, High Wide and Handsome, and Standard Time. These free spirits have not only abandoned the brick silos of Madison Ave., diving into the swells of popular culture in the entertainment capital of the world, but many if not all of them are adopting the business model of their tech startup neighbors -- entrepreneurial, innovative and autonomous, and they are taking advantage of digital advances and the rise of earned media, creating entertaining content for brands that is shared online rather than paid for; a concept that easily fits into the seaside culture.

Yes, and I’m also talking about the new digital marketing technologies that are populating the beach and its environs and are expanding the earned media movement, and in some cases turning it back into a paid platform. For example: Fullscreen, the non-YouTube independent online content network that offers an optimization program for brands to increase views of their online content; Zefr, a social media video marketing startup that helps marketers track shared content that contains references to their brands and then connects brands to the content fans; and Big Frame, which targets YouTube artists and channels for branded integration relationships.

(There are lots more, but I refuse to count grains of sand on the beach in this column, thank you. If you have the patience, you can track the multitudes down on the represent.la site, which provides a map of tech startups in L.A.)

Digital developments in L.A. have not been lost on big-time talent agencies, which are responding by signing new technologies, much as they took on brands during the branded entertainment glory days of the middle aughts. Cynical observers say Beverly Hills is slumming again, as it did when talent shops signed Snickers and Coke alongside George Clooney and Steven Spielberg. But there is fat cash to be found in the dunes of Silicon Beach, and CAA, ICM, UTA and Endeavor are combing the waterfront with high-powered metal detectors.

The epicenter of the L.A. new wave is Windward Circle in the heart of Venice, a few blocks away from the boardwalk, which is as nearly as shabby as it apparently was in the sixties, when Jim Morrison paid $75 a month for an apartment here. Rents have gone upscale since then and so have the tenants, tee shirt companies and liquor stores yielding to creative service companies like the indie agency Mistress, digital shops Big Pie and Farmer Brown, and film producer Hard Boiled Entertainment, all their cribs overlooking the circle. Even the venerable Venice post office across the way, with a WPA mural of Venice founder Abbot Kinney in the lobby, is being converted into the Silver Pictures studios, Joel Silver’s company.

Further round Windward is a minimalist gray tower with mirror plate-glass windows and no signage that is in many ways the bull’s-eye of the epicenter; this is the home of Amplify. Founded by a group of angel investors with backgrounds in technology, marketing and entertainment, Amplify is an investment partnership that provides seed money and accelerator funds for tech startups with names as oddball as indie ad shops -- FloQast, Squabbler, Estify, Battlefy and Ship Mate (whose slogan is “Let’s get ship-faced!”).

Amplify also describes itself as an “entrepreneurial campus” offering co-working space, workshops, classes, speaking events and “fireside chats,” which are popular with the new locals. In fact, Amplify appears to be fast replacing Beyond Baroque, a perennial art and literature collaborative here, as the place to hang for talented young Venetians and Angelenos, reflecting the beach’s radical makeover from artist commune to geek colony.

Last week, Richard Wolpert, Amplify’s managing director, and former Apple engineer and Disney executive, sat down for a chat with Keyvan Peymani, ICM’s digital strategy director. Mr. Peymani is basically a metal detector, and his agency is on the hunt for tech companies. But according to him, ICM does not just act like a typical agent, simply making matches between technologies and investors, or technologies and ICM’s stable of artists, it is primarily a biz development partner that invests in companies and helps market them.  

“Our model is an operational partnership,” said Keyvan. “We try to get in there early and build companies.”

One such company is Screenz, an Israel-based company that produces apps, games and other interactive platforms for television programs and celebrities. Basically, Screenz is a distribution and marketing tool for traditional media brands in the untraditional digital universe. ICM and other agencies are becoming stakeholders in this so-called “second screen” space not just to invent vehicles to promote the agency’s stable of talent, but also to produce new revenue streams. 

Peymani and his associates at ICM are optimistic. “The money flow favors Los Angeles,” he said, referring to venture capital investment in new technologies. According to Keyvan, L.A.’s unique mix of top creative talent from the music and film industries, along with tech talent and consumer-facing platforms, is a super-fertile environment for building the second-screen universe, and for attracting investors.

Indeed, in his introduction to his guest speaker, Wolpert announced that Amplify just received an $8 million infusion of cash, which will be pumped into local startups. “And don’t be afraid to come up and talk to me about what you’re doing,” he announced to the enthusiastic and hungry overflow crowd. “That’s what we’re here for,” he said.

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