Cyberspace On The Hudson

The digital gold rush is here. Suddenly, everyone from publishing and entertainment giants to advertising and music moguls are clamoring for new media--the audio, video, and graphical "content" for CD-ROM, film, and online.

That digital thirst is sparking a burst of creative activity across the country--in San Francisco, Seattle, and Austin, for starters. But nowhere is the ground as fertile as in New York. Hundreds of tiny companies started by artists, filmmakers, and musicians have sprouted up in the past two years--with names such as Razorfish, Pseudo, and Need 2 Know. These hopefuls join a handful of somewhat better-known pioneers, such as Voyager and Music Pen, seeking their fortunes in a gritty stretch of lower Manhattan known as Silicon Alley.

"EDGE." New York New Media Assn., formed a year ago to galvanize the new-media community, has seen its membership swell to 1,500 people representing 1,000 companies. Its monthly "cybersuds" get-togethers, once intimate affairs hosted in company offices, now regularly draw crowds of several hundred.

What brings these brave souls to New York, with its harsh rents, high taxes, and outdated buildings? "It has to do with edge, attitude, and proximity," says Jerry Michalski, managing editor of Release 1.0, a newsletter for the digiterati.

It also helps that New York is the traditional power base for publishing, entertainment, and advertising--the industries whose confluence powers new media. Virtually all of the media giants have new-media units, but most still look to smaller outfits for creative skills. "Whether you are a small company or an independent contractor, it behooves you to be in New York," says Gene DeRose, president of Jupiter Communications Inc., a market researcher in Soho.

City planners are doing their part as well. Mayor Rudolph W. Giuliani has drafted a revitalization plan that offers a series of incentives, including deep tax cuts and energy-cost savings, to attract and retain small businesses in lower Manhattan. The state senate is expected to approve it at a special Oct. 11 session. Plus, a venture fund earmarked for new media has been set up by the city.

But the core of New York's efforts is the Information Technology Center, a 31-floor building equipped with high-speed fiber optics that will provide facilities for dozens of new-media companies when it opens this fall--in the former headquarters of Drexel Burnham Lambert Inc., the defunct icon of New York's go-go years. The symbolism isn't lost on the Center's city and corporate backers, who hope Silicon Alley will yield gold yet.

Before it's here, it's on the Bloomberg Terminal.