Last Thursday, at the Audit Bureau of Circulations’ annual conference, Mayor Michael Bloomberg dropped by the Waldorf-Astoria to deliver brief remarks to a ballroom about two-thirds full. Having just finished with a press conference on the fiscal crisis, he targeted his opening joke at The New York Times with a quip that seemed to capture the newspaper industry’s woes.
“Now it costs a $1.50, and it’s about an inch-and-a-half narrower,” Mr. Bloomberg said of a daily copy of The Times. “I think you must have misunderstood—in this economy I’ve asked New Yorkers to do more with less, not charge more for less.”
New York has long prided itself on being the country’s media capital, home to the publishing and magazine heavies, the television networks and two national newspapers. But the long-term future for The New York Times and just about every other printed product looks grim, spurring questions of whether the city’s media dominance could soon wane.
To this end, the Bloomberg administration is launching an initiative to boost the media industry, as the city’s Economic Development Corporation is searching for a consultant to craft a report on the state of the industry and give recommendations to bolster its growth in coming years. The media industry is one of the largest in the city, accounting for more than 160,000 jobs and $15 billion in wages, and occupying more than 14 percent of Manhattan’s office space. EDC envisions the study as a yearlong effort that would include CEO round tables, workshops with industry professionals and suggested policy actions to bolster the industry.
“In terms of the study, the city is looking frankly to understand more about the trends, and what steps we can take,” said Steven Strauss, the EDC vice president leading the effort.
While its language is broad in its request for consultants, the city does not seem to be searching for suggestions on how to prop up dying mediums. Rather, EDC seems to be focused on receiving recommendations on how to help many of the old, “traditional media” companies heal their wounds and better adapt to the digital world, while also attracting and growing Internet and tech-focused firms.
“This is aiming at media broadly defined, but we’re interested primarily in the transition from traditional media outlets into the electronic age,” Mr. Strauss said. The initiative comes as old-media firms in the city and region are bleeding.
Book publishing, print media and television have long been the pillars of the industry, occupying prominent spaces in high-rent midtown office buildings. Now all three are feeling pain as the Internet captures a growing audience, especially from magazines and newspapers, for which an online future already means far less lucrative advertising and little or no money from subscriptions.
The Audit Bureau of Circulations reported that newspaper circulation nationally was down this past quarter almost 5 percent from a year ago; according to Publishers Information Bureau, magazine advertising revenue was down 8.8 percent in just the third quarter; and in October, a series of unrelated cuts were announced at a host of New York-based publishing companies. Time Inc. said it would cut 600 jobs; Condé Nast said it would cut costs across the company by 5 percent and limit its new monthly business magazine, Portfolio, to 10 issues a year; Hearst is stopping publication of Cosmo Girl; and the publisher of Maxim, Alpha Media, is cutting 50 to 60 jobs and sending its back offices to Tennessee. (The city’s initiative was hatched before the recent cuts.)
While other portions of the media industry are seeing far more growth, it is clear that whatever transitions the industry as a whole goes through in the coming years, there will surely be pain, regardless of what steps government takes to mitigate it.
“We have to hope that in a certain way, we’re regenerating new limbs on the tree, and some of that is Huffington Post, and some of that is NYTimes.com,” said Richard Edelman, president of the large public relations firm Edelman. “It will be some combination of the new and the old.”
FROM TIME TO TIME the city launches studies to find ways to grow various industries locally; and though a survey of an industry on its own does not necessarily offer much value, the accompanying recommendations can lead to policy changes.
As with similar studies, recommendations from the media study could theoretically come in the form of tax break proposals, investments in education and changes to zoning regulations, among other areas under the city’s control. The film industry, for instance, has seen growth since 2004 as the city and state ratcheted up tax credits for film and television production, with the payrolls swelling from about $1.8 billion in 2003 to $2.5 billion in 2007, according to city figures.
The most recent high-profile study undertaken by the city was the so-called McKinsey report, a review of barriers faced by the financial industry completed by consultant McKinsey & Company. Its recommendations, released in early 2007, centered around keeping New York competitive with global rival London, and would probably have a less receptive audience today than a few months ago: The report called for loosening federal requirements and regulations on financial firms.
For now, with the media industry, the city seems to have established itself as a center of content, both digital and print. Newer new-media companies like the Huffington Post and the Daily Beast are based in the city, as are the traditional outlets with a national and international presence: NYTimes.com, WSJ.com, the network news sites.
Today the broad media sector in its various forms—publishing, film, broadcasting, communications, cable, advertising—has been growing in recent years, but still, despite a major boom cycle, employment is down from just before the last recession. According to numbers from the state’s Department of Labor and the city, about 144,000 people were employed in the city’s private media sector in 2007, up substantially from 129,000 in 2005, but about 7 percent lower than the high of 155,000 seen in 2001. Publishing, television and radio broadcasting have seen minimal job growth in the past four years or so.
As for the future, the overall picture is mixed, as digital jobs should increase while traditional media jobs continue to dwindle, though total employment seems likely to decrease.
“Recently, with the exception of motion pictures, the sectors have been flat to declining,” James Brown, a labor market analyst with the state’s Department of Labor, said of media employment in the city.
The driving problem, at least with magazines and newspapers, is the declining ad revenues as advertisers and readers shift to the Internet.
“Right now, the ad revenues on the Web, compared to the ad revenues that are lost in print, is like comparing nickels to dollars,” said Mortimer Zuckerman, publisher of the Daily News, who said he was bullish on the long-term future of New York as a media center. “In no way, at almost any newspaper that I know of, have the Web revenues, even though they’re going up consistently and continuously, and by big percentages, made up in real dollars what they are losing off of conventional advertising.”
PERHAPS NO AREA of the city better showcases the trends in the industry, positive and negative, than Hudson Square. In the past three years or so, media firms have flocked to the former printing district west of Soho, where office space is at a steep discount compared to midtown—some to shrink in new, low-cost space, and some to expand in the company of other creative firms. Newsweek, Viacom, WNYC and The New York Review of Books all have taken space in the area since 2006.
By and large, many of those media firms have come to take space in buildings owned by Trinity Real Estate, by far Hudson Square’s largest landlord.
“Over time, we’ve really made this a core of our strategy,” said Carl Weisbrod, president of Trinity, “to make this the hub of creative industries, and to make this neighborhood appealing to this industry and these clusters of industries on grounds other than price point.”
Despite the declining workforce of the larger, old publishing and print media companies, Mr. Weisbrod and many in the real estate and business communities do see the broader industry as one that will see much growth in the long term.
“With all creative industries, probably as with all industries, there are twists and turns,” Mr. Weisbrod said. “We really think that these kinds of companies are the ones that are creating jobs, and where the future of the city’s economy really lies.”
Indeed, New York is certainly well positioned. The advertising industry has a huge operation in the city; the young, creative and artistic population is high; and proximity to the country’s financial center never hurts for any industry.
For those who are confident in the media industry’s future, the Huffington Post stands as a poster child. A site that rivals the Drudge Report in traffic, the company has its base not in Washington, D.C., or California, but on two floors near the corner of Prince Street and Broadway, beside a Dean & DeLuca.
“New York is a magnet for people who are creative and involved in both the culture and the politics of our time,” said founder Arianna Huffington, who herself is based at the company’s California offices. “What happens is a convergence: It’s not that new media is going to replace old media, but it’s really old media that really moves online.”