For those in groups with members that still don't believe that there are
few jobs in new media or that nearly all are for programmers, the survey
below tells a different story. be sure to check out the fact that in New
York city tthere are now more full time jobs in new media than there are
in advertising or magazines.
kelly
October 23, 1997
'Silicon Alley' Has Explosive Growth, Survey Finds
By DAVID W. CHEN
N EW YORK -- With breathtaking speed, Manhattan's new-media
industry has become one of the biggest players in the city's media
business, doubling in jobs and companies in just the last 18 months
to become a $2.8 billion-a-year juggernaut, according to a study to
be released Thursday.
The survey's findings are all the more stunning considering that
the new-media business, consisting mostly of Internet and other
high-tech companies, barely existed just a few years ago and even
now is sometimes dismissed as a hobby run by the young and the
indigent.
But the survey portrays a business that is maturing, outperforming
other businesses and becoming increasingly vital to the
metropolitan area's economy.
"This makes it clear to anyone who didn't understand it yet that
Silicon Alley is a very real phenomenon," said Charles Millard,
president of the New York City Economic Development Corp., using
the nickname given to Manhattan's new-media community.
The study was conducted by the accounting firm of Coopers & Lybrand
and the New York New Media Association, and sponsored by the Empire
State Development Corp., the New York City Economic Development
Corp. and Chase Manhattan Bank.
The study, the second such survey conducted by Coopers & Lybrand,
measures such economic indicators as demographics, compensation
patterns, freelance employment and sources of financing.
The survey gauged the new-media business in Manhattan, in New York
City and in the metropolitan area. The number of new-media
companies in Manhattan almost doubled, to 2,128, compared with the
1,175 found in the first survey in early 1996. And annual revenues
climbed 56 percent to $2.8 billion.
In Manhattan, the number of jobs -- full-time, part-time and
freelancers -- jumped 105 percent to 55,973. This means that the
new-media business (with 27,488 full-time jobs at the end of 1996
and 32,013 in mid-1997) is among the biggest in the media business,
right up there with advertising (27,528 full-time jobs at the end
of 1996) and periodicals (26,543 at the end of 1996).
In the metropolitan region, the number of new-media jobs jumped 48
percent to 105,771, including an increase of 162 percent in
part-timers. The number of companies climbed 16 percent to 4,991,
and revenues were up 50 percent to $5.7 billion.
To be sure, despite its rapid growth, the new-media industry is
still dwarfed by other industries in New York City. The securities
industry, for example, employs 155,000 people and the private
health-care industry has 315,000, said Jim Brown, an analyst at the
New York state Department of Labor.
In addition, the new-media industry is different from other
traditional businesses in that it is volatile and dominated by
young entrepreneurs. Nearly a third of the companies have been
established in the last 18 months; more than a sixth, meanwhile,
have folded in the same period. Nearly three-quarters of the
employees are under 40 years old. And a whopping 83 percent of the
metropolitan area's new-media businesses generate less than $1
million in annual revenues.
At the same time, though, there are signs of maturation, said Brian
Horey, a venture capitalist and a founding member of the New York
New Media Association. The survey found that the biggest category
of job creation was sales and marketing, suggesting that companies
have gone beyond the product development stage and into the
business world.
"Five years ago, this industry was immature," said Andy Zimmerman,
a partner in charge of telecommunications and media consulting
practice at Coopers & Lybrand. "Now, this industry is getting
mature like Silicon Valley mature: more and more companies are
employing people versus hiring freelancers, paying people more and
obtaining traditional venture capital financing."
The survey said that companies are most concerned about the high
costs of doing business in New York and the lack of technical
talent, something that puts places like Boston and Silicon Valley,
with MIT and Stanford acting as laboratories, at an advantage.
But the survey concludes by saying that the New York area's
abundance of artists, designers and writers places it in a good
position to capitalize on the growing importance of developing
Internet "content" -- the stuff that appears on a Web site. And
there are no signs that the the growth in jobs will let up.
"We expected rapid growth, but I have to admit that these numbers
exceed even our expectations," said Gov. George Pataki, whose
administration has cut taxes and supported economic development
projects designed to encourage new-media businesses. "Ain't it
great?"
Copyright 1997 The New York Times Company
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