The colorful paper dropped over crowds in New York City's Times Square at midnight is confetti.
Times Square's confetti release is part of the larger New Year's Eve ceremony that includes the illuminated ball descent. Large quantities of paper are released above the crowd at midnight, creating the familiar visual finale seen in photographs and broadcasts.
The tradition grew from earlier celebrations that used fireworks and other effects. In modern Times Square, the confetti is often printed with wishes and messages submitted by members of the public, giving the release a participatory element as well as a decorative one.
Confetti is different from streamers: confetti consists of small pieces, while streamers are long narrow strips. The New York event also uses a separate “Wishing Wall” tradition, in which people contribute hopes for the coming year that may later be incorporated into the celebration.