New York’s young breed of entrepreneurs looking to score in new media might be just a bit hipper and cooler than their Silicon Valley counterparts.
Nicknamed “Silicon Alley,” the Gotham multimedia industry is the fruit of partnerships between the city, forward-looking real estate interests and the entrepreneurs who see gold in the Internet revolution.
A quick glance at the leading players in this conclave of Web site designers and content providers points to hefty stock-offering-financed operations rather than artsy online boutiques.
Furthermore, it appears that for some companies, the high cost of doing business in New York is more than offset by proximity to creative talent and the city’s standing as a premier media and financial center.
According to a report by New York’s comptroller’s office, the number of local software-information technology businesses rose to more than 3,000 in 1997, employing 29,000 people. This is up from 1,634 firms in 1992. Further projections by PricewaterhouseCoopers (PWC) estimate that there will be over 100,000 N.Y. new-media jobs by next year.
Serious money is taking notice, too. According to PWC MoneyTree, venture capital investments in the first half of 1999 in metro-area tech-related companies reached an unprecedented $883.4 million, a 217% increase over the first half of 1998.
Real estate players are also getting in on the ground floor. William C. Rudin, president of Rudin Management has invested to wire a building with state-of-the-art technology to serve the needs of these new-media companies.
“Our strategy under the city-sponsored Plug ‘n’ Go’ program was to offer affordable, prewired, Internet-ready space to new-media companies,” Rudin says.
“Our building at 55 Broad Street has some 80 tenants.” According to Rudin, this hot-house environment has birthed all types of alliances between his tenants who regularly pass each other in the halls.
Under an agreement with Mayor Rudolph Giuliani’s administration, online advertiser DoubleClick.com has agreed to keep approximately 260 jobs in the city and will create 756 more over a 15-year period in return for approximately $4 million in city and state sales tax and energy benefits, 74% of which are tied to job growth.
Further fueling the anticipation of online opportunities is the promise of broadband applications that seem to be just around the corner. Some sources estimate that by the end of 1999, 1.5 million homes will have cable modems and that by 2002, over 30% of U.S. households will have broadband capability.
Broadband Web sites deliver TV-quality images and sound via high-speed modems over digital subscriber lines telephone and/or cable lines.
According to American Movie Classics’ (AMC) senior veep of new-media development, Gemma Turner, “This offers a wholly new experience for our customer: not TV, not the Web. We hope it will serve the dual purpose of television companion and stand-alone experience.”
All of the good news aside, an important and potentially deterrent factor to growth may turn out to be the lack of qualified personnel. But as long as the money is flowing into the new-media industry, it will not be difficult to attract high-priced performers from other industries. And some of these heavily funded management teams have done remarkably well.
One such company is iVillage.com — the Women’s Network, helmed by Candace Carpenter, founder and CEO. New York-based iVillage was placed by Media Metrix in its August report of domestic Internet usage as the sector leader across all qualitative audience measures.
UP AND COMPANIES
- Bolt.com — While advertiser sponsorship is a significant revenue generator for Bolt.com, a site produced by Bolt Media Inc. that reaches over 3,000,000 teens, its innovative e-commerce model holds great promise. It features the first store created by users that reflects their shopping preferences and fits into the company’s stated goal of empowering teens.
- Agency.Com — The leading seller of interactive relationship management on the Web seeks to draw a clear distinction between themselves and the traditional advertising community. Aaron Sugarman, prexy of Agency.Com: New York, says “We define ourselves by what we are not. We are not an ad agency. Our focus is more strategic and creative.”
- EarthWeb — a leading business-to-business hub for the interactive technology industry. The company focuses on the needs of 15 million IT professionals worldwide who spend over $750 billion a year on hardware, software and related services. EarthWeb offers an array of proprietary online technical data, reference, training, community chat rooms and a resource directory to its client base.
EarthWeb’s IT Knowledge is a partnering venture with major publishers of technical books to provide a subscriber service that offers online access to full text of hundreds of books, tutorials and source code from leading technical publishers. The company has announced its intention to add more strategic partnerships to further deliver EarthWeb’s brand to the rapidly expanding IT community.
- MTVi — MTV Interactive promises to be a music superstar, packing the punch of music super brands VH1.com, MTV.com and Sonicnet. Also, there is the carrot of a more than $300 million commitment over five years by the parent to support the online services over its TV networks.
Funny Garbage — A full-service design and production company. CD-ROM, title graphics and print campaigns for clients ranging from the Cartoon Network, Compaq Computers, the American Museum of Moving Image and others. Creative directors Peter Girardi and Chris Capluozzo began their artistic life as graffiti artists painting on New York’s subway cars and abandoned lots.
- Gotham Interactive — A broadband pioneer. The company recently completed a new broadband application for cable net AMC.
- PitchTV — Offers online original programming and news for indie filmmakers. Located near New York’s downtown production community, PitchTV is well-poised to make good on its promise to “take a completed project and get it online in a matter of hours,” in the words of partner Chris Gilligan, who acknowledges that right now the audience is a very dedicated collection of film aficionados and pic makers receptive to alternative entertainment.