Securing The Future Of New York's Media Industry

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Last week, computer scientist Marissa Mayer was named CEO of Yahoo. In the process, the Silicon Valley-based company passed over interim CEO Ross Levinsohn, the candidate favored by many New York media professionals. This occurred despite the fact that Yahoo is dependent on New York-based media agencies buying its ads. 70% of all U.S. media is still bought on the island of Manhattan.

Yahoo’s decision was only the latest example of New York’s waning influence over the Valley. Facebook, Twitter and most of the other major platforms were all founded in the Valley and are led by product-focused CEOs. While major Valley firms will occasionally hire New York media pros for sales positions, none have cracked the CEO role in recent memory.

The Valley has also largely rejected New York’s more traditional approach to advertising. Native ad formats are in ascendance, as standard display ad units are seen as a revenue source of last resort. But while the Valley has New York outgunned in terms of money and engineering talent, that doesn’t mean the game is over. There are a number of steps that New York can take to secure the future of the industry, including:

Build next-generation consumer platforms. Building big platforms that aggregate millions of users is how the Valley has begun to undermine New York’s hegemony over the media industry. In response, the city needs to develop more companies like Foursquare, Tumblr and Etsy with big user bases of engaged audiences.

Develop new media companies. The Huffington Post was an affirmation that significant media companies can still be founded, built and sold here. Startups like Thrillist and PureWow represent the next generation of promising New York media companies.

Keep developing ad tech companies. Whether it’s been ad servers like DoubleClick, behavioral targeting engines like Tacoda or social media platforms like Buddy Media, New York has been the undisputed king of ad tech. And now hot ad tech startups like Simulmedia, Moat, and Mediabrix are rising up and continuing New York’s dominance in this sector.

Fund locally. Whenever possible, New York startups should work with local venture capitalists and vice versa. Keeping it “in the family” is good for the entire New York media ecosystem.

Stop selling out to the Valley. When a New York software company sells to a Valley-based company, it provides a windfall for the founders and investors. That’s great for them, and a far better outcome than not being able to sell at all. But at some point we need to stop selling all these media-related businesses to Valley-based companies and build something of lasting value that we control.

There are over 300,000 people employed in information and media jobs in New York, the largest number of any metropolitan area. Let’s work hard to keep it that way.

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4 comments on "Securing The Future Of New York's Media Industry".

1. Craig Mcdaniel from Sweepstakes Today LLC
   

   commented on: July 23, 2012 at 12:20 p.m.
   Matt, I have some fairly strong thoughts on your story. There are great companies who are not connected with New York City who can do better but also at a lower cost. The NYC media market is is at the point of overpricing for services. The real point of your whole story is - how does the NYC media keep it over priced machine running? NYC media looks more like Detroit losing its automobile manufacturing to the rest of the world because Detroit car companies, unions and vendors to other states and countries who offered lower cost. I have major advertisers contact me directly who are looking for a better and lower cost publishing their sweepstakes and contest. I am not in NYC but in Oklahoma. More to the point, the ad agencies who represent a number of Fortune 100 companies said I even get them more entries than Facebook in the USA. In short NYC would be better off to start to understand what the new media industry is doing and to start to work with us instead of against us. Craig McDaniel, President Sweepstakes Today LLC
2. Paula Lynn from Who Else Unlimited
   

   commented on: July 23, 2012 at 2:56 p.m.
   300,000 in NYC who have information and media jobs, most are real estate challenged. The monopoly board has variations with your points well taken.
3. Matt Straz from Namely
   

   commented on: July 23, 2012 at 4:43 p.m.
   Hi Craig, thanks for the comment. I can appreciate your perspective. My first agency was in Connecticut and we competed with more expensive New York agencies for business. There will always be great businesses outside of New York will outperform for specific services. What concerns me is the city's ability to amass large, engaged audiences -- something that the Valley has learned to dominate over the past decade online. Clearly the nature of media is changing and there will be many players. But I'd like to see New York remain relevant.
4. Craig Mcdaniel from Sweepstakes Today LLC
   

   commented on: July 23, 2012 at 6:40 p.m.
   Matt, If the operating cost continues to go up in the NYC market, there will be a point where the business will leave or lost the business. I doubt it would ever get to the point of going to India or China. But I do see now that the big Fortune companies are going back to in-house on a great share of their advertising especial online. I can back up this statement by who has contact Sweepstakes Today when I didn't contact them. These companies know they can get a far better deal going to the publishers directly, not though a NYC agency. I would be happy to work with the big NYC agencies. The problem I see is they are lazy. Solve that problem and you have a chance to win me over.

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