Carson City could create niche in digital media industry

As Gov. Brian Sandoval said in his State of the State address last month, Nevada needs to diversify its economy if it wants to emerge from the Great Recession.

Among the options touted by state leaders, including the governor, is digital media, an emerging industry that powers everything from games on smart phones to the 3-D characters in Oscar-worthy films. And for many in Carson City, the hope is to one day produce some of that here.

The catalyst for this future could be the proposed $84 million Carson City Center Project. Its developers want to include a digital media lab and studio space for companies to produce digital entertainment.

While the specifics still are vague - more details are expected at Thursday's Carson City Board of Supervisor's meeting - at least two Southern California companies, Eagle World Media and Say Design, have expressed interest in setting up shop in Carson City where they would work with local schools and colleges.

So far, the owners have deferred interview requests to the project's developers, who also say it's too early to comment on specifics.

Regardless, Nevada Economic Development Executive Director Michael Skaggs said Nevada could create a niche in the digital media industry, especially in Carson City. Skaggs adds the region's fortunes could be bolstered if Congress ever repeals the ban on Internet gambling, an industry that already has a highly-trained workforce living in Nevada.

"That will cause this thing to become a reality much quicker than it will through television or film," Skaggs said. "To me that's kind of a game-changing piece of legislation."

And if Carson City's downtown development goes forward, the capital could find itself at the forefront of that market, he said.

"It's a serious issue for us, and I was glad to see Carson step out in front as a leader," Skaggs said.

Other states

Utah has housed a growing cluster of digital media companies for decades around Salt Lake City, including major brand names like Disney Interactive and Electronic Arts.

Kelly Loosli, an associate professor at BYU's animation department, which was founded in 2001 and has produced dozens of graduates who have gone on to work for major media companies such as Pixar, said attracting and then keeping digital media companies in small towns, even Provo, Utah, where BYU is located, is still a challenge.

"It's harder to get people to move to a smaller place," he said, noting many firms still seek out areas of the country that can offer a good quality of life.

The digital media industry also is facing pressures from lower wages paid to workers overseas, making it harder for U.S. firms to stay competitive. And for Carson City to invest so much in its downtown project in the hopes of starting a digital media cluster, "It's a lot to bank on. That's not to say there isn't an upside."

Pam Perlich, a research economist at the University of Utah, said the primary difference between the Nevada and Utah economies comes down to one factor: Diversification. Utah's unemployment rate is 7.1 percent. Nevada's is 14.6 percent.

"A big part of that story are the investments our state made in its institutions of higher education," she said.

Those investments include the USTAR Initiative, which was established by the Utah Legislature in 2006. It uses state and federal funding to build new facilities at Utah's research universities and to attract academic talent from major universities.

"If you forced me to make a short answer, there has been in this community ... always this high value placed on education," Perlich said "You even go back to the Mormon pioneers ... that's been a community value from very early on and has continued."

What's next?

As for Nevada, Perlich said the Silver State is now asking itself the same question many states are asking in the wake of the Great Recession.

"I think it's a conversation that's being had all over the place, particularly in smaller communities where it's always a contingent existence and sometimes really dependent on one or two basic industries," she said. "What new industry is going to grow if we specialize in it?"

She adds, "People are trying to pick the winners, the problem is that nobody knows the future and you're really putting a large bet on the table there with (the City Center Project)."

But even if the digital media cluster doesn't blossom in Carson City, Perlich said the project still would offer the community more resources to train the next generation, given the proposed knowledge center.

"It may not be as much of a business incubator as much as it is an incubator for the next generation," she said.

And while the project may have promise for Carson City, Perlich said, "the devil is in the details."

"Who are the intellectuals behind how this thing gets designed?" Perlich said. "You can have a beautiful building and some lunkhead bureaucrat running it."