Beware the lessons of growing up Galapagos

In All the old rules about movie stardom are broken, part of Slate's 2017 Movie Club year end review, Amy Nicholson writes:

Lugging my $10 masterpiece back to the hotel, I thought about how most of the famous faces who represent the movies have been dead for 50 years. Marilyn’s smile sells shot glasses, clocks, calendars, posters, and shirts in stores from Sunset Boulevard to Buenos Aires, Tijuana to Taiwan. What modern actor could earn a seat at her table? The biggest stars of my lifetime—Julia Roberts, Brad Pitt, Nicolas Cage, Sandra Bullock—never graduated past magazine covers to souvenir magnets.

If Hollywood played by its old rules, I, Tonya’s Margot Robbie and Call Me by Your Name’s Armie Hammer should be huge stars. They’re funny, smart, self-aware, charismatic, and freakishly attractive. Yet, they feel like underdogs, and I’m trying to figure out why. Robbie has made intelligent choices. Her scene-stealing introduction as Leonardo DiCaprio’s trophy wife in Wolf of Wall Street. Her classic romantic caper with Will Smith in the underseen trifle, Focus. She even survived Suicide Squad with her dignity intact. In I, Tonya, she can’t outskate being miscast as Tonya Harding, but bless her heart for trying. As for Hammer, Kameron, your review of Call Me by Your Name called him, “royally handsome,” which seems right. He’s as ridiculously perfect as a cartoon prince, and I loved how Luca Guadagnino made a joke of how outlandish the 6-foot-5 blond looks in the Italian countryside. Whether he’s unfurling himself from a tiny Fiat or stopping conversation with his gangly dance moves, he can’t blend in—and good on him and Guadagnino for embracing it.
 

But even if Robbie and Hammer each claim an Oscar nomination this year, I suspect they’ll stay stalled out in this strange time when great actors are simply supporting players in a superhero franchise. I’m fascinated by Robbie and Hammer because they’re like fossils of some alpha carnivore that should have thrived. Does anyone else feel like the tectonic plates under Hollywood have shifted and we’re now staring at the evidence that everything we know is extinct? It’s not just that the old rules have changed—no new rules have replaced them. No one seems to know what works.

Nicholson goes on to cite Will Smith, who once had huge hits seemingly with every movie he made and who is now on a long cold streak.

I'm wary of all conclusions drawn about media in the scarcity age, including the idea that people went to see movies because of movie stars. It's not that Will Smith isn't charismatic. He is. But I suspect Will Smith was in a lot of hits in the age of scarcity in large part because there weren't a lot of other entertainment options vying for people's attention when Independence Day or something of its ilk came out, like clockwork, to launch the summer blockbuster season.

The same goes for the general idea that any one star was ever the chief engine for a film's box office. If the idea that people go see a movie just to see any one star was never actually true, we can stop holding the modern generation of movie stars to an impossible standard.

The same mistake, I think, is being made about declining NFL ratings. Owners blame players kneeling for the national anthem, but here's my theory: in an age of infinite content, NFL games measure up poorly as entertainment, especially for a generation that grew up with smartphones and no cable TV and thus little exposure to American football. If I weren't in two fantasy football leagues with friends and coworkers, I would not have watched a single game this season, and that's a Leftovers-scale flash-forward twist for a kid who once recorded the Superbowl Shuffle to cassette tape off a local radio broadcast just to practice the lyrics.

If you disregard any historical romantic notions and examine the typical NFL football game, it is mostly dead time (if you watch a cut-down version of a game using Sunday Ticket, only about 30 minutes of a 3 to 3.5 hr game involves actual game action), with the majority of plays involving action of only incremental consequence, whose skill and strategy on display are opaque to most viewers and which are explained poorly by a bunch of middle-aged white men who know little about how to sell the romance of the game to a football neophyte. Several times each week, you might see a player hit so hard that they lie on the ground motionless, or with their hands quivering, foreshadowing a lifetime of pain, memory loss, and depression brought on by irreversible brain damage. If you tried to pitch that show concept just on its structural merits you'd be laughed out of the room in Hollywood.

Cultural products must regenerate themselves for each successive age and generation or risk becoming like opera or the symphony is today. I had season tickets to the LA Phil when I lived in Los Angeles, and I brought a friend to the season opener one year. A reporter actually stopped us as we walked out to interview us about why we were there, so mysterious it was to see two attendees who weren't old enough to have been contemporaries of the composer of the music that night (Mahler).

Yes, football has been around for decades, but most of those were in an age of entertainment scarcity. During that time the NFL capitalized on being the only game in town on Sundays, capturing an audience that passed on the game and its liturgies to their children. Football resembles a religion or any other cultural social network; humans being a tribal creature, we find products that satisfy that need, and what are professional sports leagues but an alliance of clans who band together for the network effects of ritual tribal warfare?

Because of its long incubation in an era of low entertainment competition, the NFL built up massive distribution power and enormous financial coffers. That it is a cultural product transmitted by one generation to the next through multiple channels means it's not entirely fair to analyze it independent of its history; cultural products have some path dependence.

Nevertheless, even if you grant it all its tailwinds, I don't trust a bunch of rich old white male owners who grew up in such favorable monopolistic conditions to both understand and adapt in time to rescue the NFL from continued decline in cultural relevance. They are like tortoises who grew up in the Galapagos Islands, shielded on all sides from predators by the ocean, who one day see the moat dry up, connecting them all of a sudden to other continents where an infinite variety of fast-moving predators dwell. I'm not sure the average NFL owner could unlock an iPhone X, let alone understand the way its product moves through modern cultural highways.

Other major sports leagues are in the same boat though most aren't as oblivious as the NFL. The NBA has an open-minded commissioner in Adam Silver and some younger owners who made their money in technology and at least have one foot in modernity. As a sport, the NBA has some structural advantages over other sports (for example, player faces are visible rather than hidden under helmets), but the league also helps by allowing highlights of games to be clipped and shared on social media and by encouraging its players to cultivate more authentic public personas that act as additional narrative fodder for audiences.

I remember sitting in a meeting with some NFL representatives as they outlined a long list of their restrictions for how their televised games could be remixed and shared by fans on social media. Basically, they wanted almost none of it and would pursue take-downs through all the major social media companies.

Make no mistake, one possible successful strategy in this age of abundant media is to double down on scarcity. It's often the optimal strategy for extracting the maximum revenue from a motivated customer segment. Taylor Swift and other such unicorns can only release their albums on CD for a window to maximize financial return from her superfans before releasing the album on streaming services, straight from the old media windowing playbook.

However, you'd better be damn sure your product is unique and compelling to dial up that tactic because the far greater risk in the age of abundance is that you put up walls around your content and set up a bouncer at the door and no one shows up because there are dozens of free clubs all over town with no cover charge.

Sports have long had one massive advantage in production costs over scripted entertainment like TV and movies, and that is that their narrative engine is a random number generator (RNG). If you want to produce the next hot streaming series, you have to pay millions of dollars to showrunners and writers to generate some narrative.

In sports, the narrative is embedded in the rules of the game. Some players will compete, and someone will win. It's the same script replayed every night, but the RNG produces infinite variations that then spin off infinite variations of the same narratives for why a game turned out one way or the other, just as someone has to make up a story every day to explain why the stock market went up or down. At last check, RNG hadn't found representation with CAA or WME or UTA and thus its services remain free.

Unfortunately for major sports, this advantage is now a weakness as sports narrative is much more brittle than its entertainment counterparts. Narrative is a hedge against disaggregation and unbundling, and that is a critical moat in this age of social media and the internet.

One way to measure entertainment value on this dimension is to ask whether you can read a summary of a narrative and enjoy it almost as much as consuming the original narrative in its native medium. My classic test of this is for movies and TV shows. If you can enjoy a movie just as much by reading the Wikipedia plot summary as by watching it, or if you can enjoy a TV shows almost as much by reading a recap than by bingeing it on your sofa, then it wasn't really that great a movie or TV show to begin with.

Instead of watching the entire last season of Game of Thrones when it returns in 2019, I offer you the alternative of just reading textual recaps to your hearts content online. Is that as enticing an alternative as actually watching all six or seven episodes? You'll ingest all the plot details either way, but for the vast majority of fans this would be a gut-wrenching downgrade.

My other test of narrative value is a variant of the previous compression test. Can you enjoy something just as much by just watching a tiny fraction of the best moments? If so, the narrative is brittle. If you can watch just the last scene of a movie and get most or all the pleasure of watching the whole thing, the narrative didn't earn your company for the journey.

Much more of sports fails this second test than many sports fans realize. I can watch highlights of most games on ESPN or HouseofHighlights on Instagram and extract most of the entertainment marrow and cultural capital of knowing what happened without having to sit through three hours of mostly commercials and dead time. That a game can be unbundled so easily into individual plays and retain most of its value to me might be seen as a good thing in the age of social media, but it's not ideal for the sports leagues if those excerpts are mostly viewed outside paywalls.

This is the bind for major sports leagues. On the one hand, you can try to keep all your content inside the paywall. On the other hand, doing so probably means you continue hemorrhaging  cultural share. This is the eternal dilemma for all media companies in the age of infinite content.

Two nights ago, I watched a clip of multiple angles of Tua Tagovailoa ripping a laser beam of a pass to win the National Championship for Alabama. I didn't watch it live, or on ESPN. I watched it on HouseofHighlights on Instagram, where, instead of hearing some anchor on Sportscenter basically tell me what I can see with my own eyes, the video spins around after a moment to reveal the stunned face of the fan who just witnessed the pass live, reaction videos being a new sort of genre which allows a person in the video to act as the emoji reaction caption from within the video itself, speaking a visual language that most young people of this YouTube/Snapchat generation are already familiar with but which traditional media doesn't notice, let alone grok.

This disaggregation problem extends to ESPN, currently still the 400 pound gorilla in the sports media jungle (reminder, there are no 800 lb gorillas). The network suspended Jemele Hill for tweeting something negative about Trump, using the same playbook as the NFL, who threatened players with suspension for kneeling for the national anthem. Both believed these actions on the part of their talent were harming the value of their product.

The irony is that if both ESPN and the NFL had let these things play out naturally, I suspect at worst it would have been neutral, and at best it might have increased their ratings. For the NFL, the ties to modern movements for social justice might have kept the league and its games in the national conversation and made it tangentially relevant to the next generation. The most culturally relevant bit of Sportscenter today may just be the Sportscenter Top 10, as athletes who make a stunning play routinely tell reporters they are excited to see if they'll be featured on that evening's roundup of the top 10 plays.

Unfortunately, many athletes already see an appearance in HouseofHighlights as the social media alternative to appearing in the Sportscenter Top 10. If you follow top athletes on Instagram, you can see which of them favorite posts on HouseofHighlights. Lebron James routinely favorites posts, as do many other stars. Since many of those athletes follow each other on Instagram, that feature of Instagram produces common knowledge. It's not just that Donovan Mitchell knows that Lebron James favorited a HouseofHighlights clip of him dunking, it's that Mitchell knows that James knows that Mitchell knows and so on.

For ESPN, hewing to the idea that only highlights presented dispassionately or games broadcast respectfully are key to their value is a risky one. Not that they haven't generated a ton of wealth from doing so, and not that TV broadcast rights to major sports aren't still extremely valuable, but those are much more fixed commodities, available to the highest bidder, and ones whose value are close to their peaks, if not past them. This can't be a complete surprise within the four walls of their corporate offices given how much salary and air time they devote to blowhards like Stephen A. Smith and Skip Bayless, but their hesitance to lean into cultivating more original voices will haunt them in the long run. The average caption on an Instagram clip of a major sports league highlight is about twice as likely to be fresh and contextually humorous to a young person than any amount of generic sportscaster hooey spouted on ESPN.

This vulnerability extends to their online presences. I still visit ESPN.com on the web and on my mobile devices to get my sports news roundup each day, but sometime in the past few years, the designs of all these presences shifted dramatically. Gone was a hierarchical layout with different sized headlines and groupings of stories. In its place is a long center gutter of updates from a variety of sports leagues, in modern news feed style.

One can see why they went this way, it made ESPN more current, allowing them to push the latest stories to the top of the page to compete with people getting more current updates from Twitter and other social media sites. For a smartphone, in particular, with its limited screen space, it's not easy to block content into multiple sections on one page.

However, the moment you copy someone else's design, you've shifted the terms of the debate in their favor. In a previous era, ESPN's visually distinct information hierarchy set itself up as the authority on what stories mattered. In the new design, what matters skews towards what's the last thing to happen. It's all flow.

To some extent, in our hyper-personalized world, the era of any media entity deciding what stories matter more than others was always going to decline from what might be seen now as a temporary heyday. I care more about Chicago sports teams and Stanford given my background, so having those elements given more prominence was a notable improvement in the site's newly personalized design. Still, what is lost is that sense of authority, that ESPN sets the terms of the debate. Humans remain a social animal, and we take cues about what matters from our each other, including our media entities. ESPN has ceded more and more of the work of determining our sports Schelling points to other entities.

While this may sound grim, the major sports, their respective leagues, and ESPN all have a fairly solid near term window. For one thing, sports is still the highest volume, highest popularity real-time entertainment. As such, it remains a linchpin of many entertainment packages including cable bundles, and so we'll see various media companies pouring money into it until it can't hold things together anymore. We may even see the prices bid even higher for some time as often happens for assets being milked for their last but fleeting window of cultural scarcity.

A second and less discussed factor is that most young tech CEO's don't know the first thing about sports. They, like a sizable part of Silicon Valley (the group that tweets #sportsball whenever Twitter is inundated with reactions to some notable sports event), grew up with other interests. Without that intuitive sense of sports' place in culture, they aren't as attuned to the opportunities in that category.

This provides the leagues opportunities to swindle the tech companies for a while longer, an example being the rights to stream Thursday Night Football, which a series of tech companies from Yahoo to Twitter to Amazon have (probably) overpaid for the last few seasons. As Patrick Stewart said in L.A. Story, "You think with a statement like this you can have the duck?!" The chef says, "He can have the chicken!" Thursday Night Football is zee chicken of the NFL broadcast portfolio, but the restaurant is still called L'Idiot.

This happened for tech companies when they tried to add film and television to their portfolio, too. They routinely paid fortunes for the rights to back seasons of shows that are no longer relevant anymore. When I was at Hulu, I could only shake my head when I heard the asking price for all the back seasons of Seinfeld. Years later, long after I'd left, Hulu paid multiples of that. The cultural decay curve for content in this age of abundance is accelerating by the day, and there is no equivalent of botox to ward it off.

Given market feedback, however, such temporary arbitrage never lasts long. The days of the NFL strong-arming its partners to overpay for the most meager of rights are coming to an end. The thing about setting up a moat around your content is that the moment your cultural value crosses its peak, the moat becomes a set of prison bars. The flywheel loop can turn just as furiously counter-clockwise as clockwise.

And one of these days, a tech company will look at ESPN's homepage and notice how much it looks like their own. If they just put a bit more structure around it, could they satisfy that sports itch for their captive audience which already check in with them multiple times a day?

It seems implausible today, but look at what happened in film and television. For the longest time, so many tech companies were guilty of exactly what Hollywood accused them of, not understanding how film and television is made and marketed, how that industry creates demand for its product. Like all engineering led-cultures, Silicon Valley suspected Hollywood of not being data-driven enough, and many suspected that upstream process failures were responsible for failed releases. Half a film's budget is spent on prints and marketing? What a waste! (Engineers despise marketing.)

Forget that most of these people in tech had never been on a film set, or sat inside a writer's room, or seen the volumes of market research done before any film's release. It's all just content, let's just crowd source some alternatives. Or, if we produce some premium content, what's needed is earlier crowd-sourced feedback. Hundreds of millions of dollars were wasted before Silicon Valley realized they didn't know what they were doing.

Fortunately, all it cost them was some money and some time, something most of the incumbents have a surplus of. Now they write checks to creatives in Hollywood and leave them alone to do what they do very well already. Machine learning improves with data even when the algorithms are off, and so do most tech companies.

I am a lifelong lover of media in all its forms, and sports in particular was central to how I assimilated into America. It has long served as cultural connective tissue between me and friends, family, and strangers. But if I had an easy way to short all the major sports leagues over the next decade, I would. Nostalgia serves many purposes, but its most dangerous one is wrapping us in a memory of a time when we were still relevant.

Optimal pricing for bread and circuses

A survey (pdf) by Anthony Krautmann and David Berri has found that most fans in many popular sports pay less for their tickets than conventional economic theory would predict.
 
Which poses the question: are team owners therefore irrational?
 
Not necessarily. There are (at least?) four justifications for such apparent under-pricing.
 

Lots of things in the real world are underpriced. Most popular concerts and sporting contests lose some volume of revenue to aftermarket transactions on sites like StubHub and SeatGeek. It's nearly impossible to get a reservation at some of the most popular restaurants in San Francisco like State Bird Provisions. There's a waiting list for NOMA Sydney that's 27,000 people long.

If you were pricing to maximize revenue, to match supply and demand exactly, you'd boost prices or perhaps auction off all the seats. What would NOMA Sydney have to charge until its waiting list dropped to zero? I can't even begin toguess, but would it surprise you if it was well north of $2,000 a head for dinner?

Given all of that, I was curious to see what this author thought might explain football ticket underpricing.

The first argument is that underpricing tickets leaves more revenue to be gathered through ancillary sales like souvenirs or overpriced concessions. Without data, I'm skeptical. My instinct is that concession and souvenir sales are less elastic with ticket prices than hypothesized.

The second point is that it's better to have a full stadium for team morale and to influence the officiating. But again, you could sell tickets via a mechanism like a Dutch Auction and maximize revenue while still filling the stadium.

The other two arguments are more convincing.

Thirdly, higher ticket prices can have adverse compositional effects: they might price out younger and poorer fans but replace them with tourists – the sort who buy those half-and-half scarves and should, therefore be shot on sight. This increases uncertainty about longer-term revenues: a potentially life-long loyal young supporter is lost and a more fickle one is gained. It also diminishes home advantage: refs are more likely to give dodgy decisions in front of thousands of screaming Scousers than in front quiet Japanese tourists.
 

I went to a couple games at the old Chicago Stadium, during Jordan's early years with the Bulls, and that place was loud. When they moved to the United Center and the ticket prices went way up, the crowd felt different. More wealthy, and definitely not as loud. It could just be the acoustics of the new space, but anecdotally, I saw fewer fans standing and screaming. Also, the rise of the smartphone means more of the dead moments in a game are filled with people scrolling on their phones, quietly.

Fourthly, high ticket prices can make life harder for owners. They raise fans’ expectations: if you’re spending £50 to see a game you’ll expect better football than if you spend just £10: I suspect that a big reason why Arsene Wenger has been criticised so much in recent years is not so much that Arsenal’s performances have been poor but because high prices have raised expectations. 
 

It's hard to lower prices. Some sports teams may have done it at some point, but I've never seen it. You can raise prices when the team is good and on the rise, but those prices tend to stick when the team declines, and that's when stadiums start to empty out.

Saison is the restaurant in San Francisco that feels closest to pricing to match supply and demand. When I first moved to San Francisco, I had a meal there for $79. The next time there, the meal price had jumped over $100. Then the next time, it was up to $149. Later I heard the tasting menu had risen yet again to $248. The last time I went, thankfully on some banker's expense account, the price was $398 for dinner.

The dining room is usually full, but it's usually possible to get a table the same week. It feels like they've finally reached a price that about as close as you can get to where the supply and demand curves meet. Since the number of seats and turns is limited each night, perhaps this is revenue maximizing pricing, but the margin of error is razor thin.

My guess is that optimal pricing is somewhere below the price that matches supply and demand perfectly. Always being sold out adds a feeling of exclusivity, and no one knows how sold out you are, so being just sold out may be as good from a perception standpoint as being having a massive waiting list.

At the same time, I have a sneaking suspicion continuing to raise the price of a dinner would actually raise demand at some high end restaurants. There may be some Veblen-like qualities to restaurant pricing.

Miss American Dream

Each residency is a reflection of the demographic the property is going for—the Mirage made a play for the affluent and not-quite-debaucherous late 30s/early 40s crowd with Boyz II Men, these boyz who are now patchily gray men, who remain pure in their desire to romance you, to make gauzy, romantic, sweet, consensual love to you, and quickly retreat when you give the nod, who wear sequined letter sweaters and overestimate the impact their music had on our sex lives (“I bet there are some Boyz II Men babies in here!”). The Venetian very much wants the Midwestern, soft-country audience of Tim McGraw and Faith Hill. Planet Hollywood, with its hot pink accents and movie-themed rooms, was built for the Britney fan.

It’s only late in the evenings that Vegas visibly becomes what the tourism board says it is: young and saturated with sex—and not the Boyz II Men-sanctioned lovemaking kind, either. Out on the Strip, aging women wear shirts that say “Girls! Girls! Girls!” A man working for a competing strip club has a shirt that says “Orgasim Clinic: Accepting New Patients.” (Sic on that tragic typo.) Single-named DJs pump their skinny arms as women in tight tube dresses and Lucite heels they bought online a year ago straddle mouth-breathing men on VIP couches like they just heard there was an asteroid headed toward earth or just took a handful of Ecstasy; platonic girlfriends decide to make out at no urging at all because we’re in Vegas bitchez! One does not have to go far to feel the erection of a stranger in the rear of one’s jeans. It is in these small, handsy hours of the night that Caesars’ hope for Britney was born.
 

Taffy Brodesser-Akner on Britney Spears residency at Planet Hollywood in Las Vegas.

I enjoyed this economic breakdown from AEG Live president John Meglen before her residency began. It's telling about the economics of Vegas.

“Even if you believe in Britney, that gives you 50 shows [per year], great, what are you going to put in there your other 200 nights a year?” Meglen told me, in his office in L.A. “If all they have in there is Britney Spears and she is sold out for 50 shows, they have failed. They need Britney Spears and the Spice Girls and Jennifer Lopez and Pink or whoever, okay?” That said, even if the theater is sold out and the seats filled, that doesn’t quite fulfill the residency’s mission, which is to say: Vegas may claim to want youth, but young people aren’t actually good for business.

“You have to ask, ‘Are those kids buying tickets yet?’” Meglen continued. “Because most of them still are seven in a carload driving out from Southern California, they all sleep in one room, they spend the day at the pool and at night they go to the clubs. They’re great at using the workout room, that comes with your ticket. They don’t get the body scrubs or the facial wraps, you know? They don’t gamble and they don’t eat at restaurants and right now, in my opinion, it’s fucking tanking the whole fucking city.”

Subsidized risk

“Cloud Atlas” may have been expensive to make, but “Moonrise Kingdom” and “Black Swan” weren’t, in Hollywood terms (sixteen million and approximately thirteen million dollars, respectively), and one of the things that made them possible was the stars’ willingness to take small salaries (in exchange, I’d guess, for a percentage of earnings). In effect, many of the best Hollywood directors now work the way that Woody Allen has long worked—but this system depends on stars earning enough elsewhere for them to take a chance on a project or a director dear to them. Overall, many of the cinema’s artistic successes depend on a thriving industry, with its performers and technicians, its suppliers and its technical advances. And a look behind the scenes at many low-budget films reveal that their connections to Hollywood, whether tenuous or tangential, nonetheless prove to be significant in practical terms. So, whether Disney’s “Star Wars” movies turn out to be clever reimaginings or merely intergalactic cash cows—may the force be with them.

That's Richard Brody with an interesting take, as always, on the purchase of Lucasfilm and the Star Wars franchise by Disney. He articulates one of the reasons why I don't take hold it against  actors or directors when they do the occasional mainstream movie blockbuster. Often it pays the bills and allows them to do more interesting alternative projects on the side. In structure it's no different than many starving artists who work as baristas at Starbucks to pay the bills. Granted, the biggest Hollywood stars are so wealthy it's just about how many vacation homes they need, but many would be surprised how modestly the vast majority of film industry folk live and that includes some fairly famous actors. The Hollywood blockbusters are the suns around which the entire filmmaking business in LA draw power from.

The Silicon Valley equivalent of the massive Hollywood franchises are the giant companies like Apple, Google, Facebook, Amazon, and Microsoft. They are the hubs which make the Bay Area and Seattle a stable tech ecosystem. People can leave those companies to try startups, but they can go back to those hubs if they fail, or lose the stomach for the entrepreneurial battle, or if they have dependencies like a mortgage and family to support that make that risk-reward equation less tenable. Maybe they are between entrepreneurial ideas, or they've been purchased by one of those giants and are recharging for the next big venture.

When I was in Seattle, Microsoft and Amazon were those hubs. I know so many people from my Amazon days that have left Amazon and gone back, and some have made that switch multiple times.

Some have argued that those colossus dampen entrepreneurship by providing too much of a safety net, but I think it's precisely that safety net that should allow or force entrepreneurs to take bigger swings and risks. It's the way safety belts make people drive more recklessly, or wearing a helmet gives me more confidence to try crazy jumps on my snowboard.

It's easier to compete with the Bay Area as a tech hub than it is to compete with LA as the filmmaking capitol of the world because so much more of tech infrastructure is distributed and accessible from anywhere. You can't access a union grip for your lighting department via Amazon Web Services (at least last I checked). But up and coming tech hubs like New York and Los Angeles still would benefit immensely from having one or more giants based there. The "sun and orbiting planets" or "planets and orbiting moons" configuration is just a more optimal, stable configuration for fostering diversity of life and efficiency of production.