Why Austin Is Falling Out of Favor for Tech Workers
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Welcome to Tech News Briefing. It's Friday, May 23rd. I'm Victoria Craig for The Wall Street Journal. The shine is rubbing off of Austin's newfound crown as a U.S. tech hub. We'll tell you where workers are packing up and heading off to. Then, streaming services have entered a new era of profitability, but it comes with more confusion for users.

But first, Austin's short reign as an American tech hub might be coming to an end. Data exclusively obtained by The Journal show regional tech hubs across the country are losing talent as workers head back to the coasts. And Austin is one of the hardest hit cities.

Isabel Busquets is a reporter for WSJ's CIO Journal. Isabel, it took just five years for workers to rush into Texas and now back out. Why? A few reasons. One, a lot of remote workers who move to cities like Austin for lower rents and a better quality of life are now being called back to the office. So they're having to go back to the cities where their companies are based.

A lot of companies that moved to Austin have since done layoffs, which is true for companies across the board in tech. But when you've been laid off, workers are finding that San Francisco or New York is a better place to look for a new job. We've seen AI really revitalize the San Francisco Silicon Valley tech industry.

And then for somewhere like Austin, the big population influx over the last few years put a lot of pressure on the infrastructure. People sort of moved there for better quality of life, lower rents, etc. And then living costs didn't stay so low for very long.

Plus, there was pressure on the infrastructure, public transit, traffic. There were some frustrations with that. So a whole host of reasons. Overall, we are seeing people who moved to Austin chasing this idea that it was this big tech scene in the Sun Belt maybe realize that it was a little oversold. And they're now, yeah, maybe circling back to the coasts.

Yeah, one person you spoke to said he was extremely underwhelmed after moving to Austin in 2022 and has since left.

You mentioned AI. That's been a big driver of this move because it's so centralized in Silicon Valley, that whole industry. One startup founder told you also attached to that that networking and learning opportunities there are just unmatched. Yeah. One of the complaints I heard about the tech scene in Austin is that people who are founders, who are looking for venture funding, who are looking to start companies, looking to learn from each other,

Events and networking and being able to do that in person is really important. And the folks I talked to just found that events were a little harder to find in cities like Austin. The quality of events wasn't quite as high. They felt like maybe the people they were meeting were aspiring to do technology rather than the people that were really doing it. Not to say that there is no sort of tech industry there. They just found that it was just so much stronger in Silicon Valley.

So we're talking about individual employees who have moved in and out. What about companies? Are companies also leaving as well? We've seen one big shift away, and that was Oracle. So they moved from California to Texas during like post-pandemic era. And

Now they've moved to Nashville. The other companies we saw move there, Tesla, HPE, they're still around. But again, a lot of the companies that moved down there have done layoffs. So that just leaves a host of workers that are just on the hunt for new opportunities. It's important to note that not everyone you spoke to, not everyone who moved to Austin is moving back to the coast. Who's staying and what does Austin claim to have that those other coastal cities don't?

don't have. It's totally dependent on who you are and what you're looking for. People who are really ambitious, really looking to make a mark on the AI or the technology industry. Those are the people that are like really drawn to wanting to be in the heart of it right now. Other folks who are maybe just want to put down roots in a city with maybe again, lower rents, better quality of life.

They're maybe not necessarily moving away or maybe they're just moving close by. Maybe they're moving to the suburbs. Maybe they're moving to nearby cities like Dallas. So I don't think it's like totally everyone is abandoning Austin right now. But, you know, it just depends on who you are and what you're looking for. That was Isabel Busquets, a reporter for WSJ's CIO Journal.

Coming up, tiers, bundles, discounts. Oh, my. Why streaming services have gotten so complicated after the break.

Marketers, you know that feeling when your content just works? When you crush a viral trend before 10 a.m.? That's Contentful. Dynamic content made blissfully simple. Contentful helps you create and launch personalized experiences instantly across any digital channel. No limits. No stress. Only possibilities. Come get the feels at Contentful.com.

When you sit down to relax and watch TV, what's your go-to platform? These days, there are an endless array of choices and a variety of ways those brands try to get you hooked on their platforms. That's made it a confusing and sometimes overwhelming experience for us as consumers. But it's a strategy that's also leading to profitability for entertainment companies.

WSJ media reporter Isabella Simonetti has been digging into this. Isabella, walk us through some of the reasons these streamers are now turning a profit. So we've seen Disney and Warner Brothers Discovery in particular see some quarters of profitability in their streaming segments. Part of that is driven by a

sort of era of austerity that occurred where streamers were focusing on growing revenue. Part of that was by implementing password sharing restrictions, which we saw with Netflix in particular, and spending less on original content and introducing ad tiers. And for some streamers, that is really starting to pay dividends.

But we're now in an era for consumers that is potentially even more confusing and complicated than it was before. Yeah, I was trying to count how many subscriptions I have and how many times I've switched those subscriptions. I thought it was interesting. Your data show the average household has about five subscriptions. Do people tend to switch from one to another fairly frequently or are they pretty committed to each one that they sign up to?

Based on some of the data that we got from the story, we do know that consumers pretty frequently cycle in and out of different streaming services. In December, there is a football game on Netflix and someone signs up for a Netflix subscription so that they can watch that and then they'll cancel and come back to it when they want to watch a show. Like,

So it's almost more of a pause than it is a hard cancel. But a lot of times it's pretty common that people will cycle in and out in order to get access to the content that they want. And you also write that there are a lot of other options that are coming onto the market. You mentioned how confusing it is for consumers. Some platforms are changing their names and then changing them back again. You mentioned that Fox, CNN are constantly

coming on with their own streaming services soon. There's a bolstered option from ESPN. YouTube is taking also a bigger portion of audience share for people who even want to watch podcasts rather than listen to them. What does it mean for consumers? But then also, what does it mean for the streamers? Do they want to have loyal customers? If you're a consumer, you want to know, should I cancel my cable subscription?

How do I get what I need in the most simple possible way? And there isn't really a clear answer to that unless you have a very narrow set of interests. Right now, if you're a sports fan and you want a mix of news and entertainment as well,

you sort of need to subscribe to a number of different services in order to get all of that content. And it's only getting more complex. We take the NBA, for example. Starting next season, select games will be exclusive to Amazon's Prime Video service and NBC's Peacock streaming service. So then even if you have a cable subscription and you were watching on NBC, you're now going to need a Peacock subscription in order to catch up

on NBA games. We're sort of in a period where it's almost getting worse in terms of choice and options before it potentially could get better and they'll introduce more simple streaming options. Disney has started to do this. They offer a bundle and are planning to offer a bundle with the new ESPN service that includes Disney+, Hulu, and the ESPN direct-to-consumer service where you can get a mix of

entertainment and sports. So there are some options that are becoming more simplified, but it's still a pretty crowded landscape. Gee, Isabella, this is sounding a little bit familiar. It almost sounds like the streamers are coming up with ways to bundle things in the form of cable, which we all once cut the cord from years ago. Is it sort of this cycle that's just coming back around? There's going to be a point at which some of these streamers maybe partner with each other to create bigger bundles.

what is the overall trend in the industry? That's exactly right. And we're already starting to see that. I mentioned the Disney bundle. Disney also has a bundle with Max, which is now being renamed HBO Max once again. So, you know, if you're a cord never or a cord cutter, what you're essentially trying to do if you want access to a broad array of content is recreate your cable package in a simple way through streaming services. And the question is,

whether the math checks out, but it's very specific to what your interests are, what teams you follow, if you want news content. But yeah, that diagnosis is correct.

That was WSJ media reporter Isabella Simonetti. And that's it for Tech News Briefing. Today's show was produced by Julie Chang and Zoe Kolkin. I'm your host, Victoria Craig. Jessica Fenton and Michael LaValle wrote our theme music. Our supervising producer is Melanie Roy. Our development producer is Aisha Al-Muslim. Scott Salloway and Chris Sinsley are the deputy editors. And Falana Patterson is The Wall Street Journal's head of news audio. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.

Marketers, you know that feeling when your content just works? When you crush a viral trend before 10 a.m.? That's Contentful. Dynamic content made blissfully simple. Contentful helps you create and launch personalized experiences instantly across any digital channel. No limits. No stress. Only possibilities. Come get the feels at Contentful.com.