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AUSTIN, Texas - The music business has been shrinking for a decade, and now the economy has followed it into the tank.


So why were the streets here filled last week with thousands of music fans and industry types hustling from one club to the next in pursuit of more than 1,900 acts?


The music world gathers to hear and be heard

They had come to hear and be heard at South by Southwest’s 23d annual music festival and conference, the industry’s largest, because tough times make it more essential than ever for aspiring acts and industry survivors to strategize about the future (while, of course, noshing on barbecue).


“It’s where everyone is. Everyone congregates here for a week,” said Chris Radwanski, 23, who manages the boisterous Philadelphia rock quartet Drink Up Buttercup. The band, seeking a record deal, played a tuneful set at the Beauty Bar on Wednesday afternoon, and showcased for labels at two other gigs. “We’re putting (our music) out there, and they’re looking for something to grab.”


Advance registrations for this year’s SXSW music festival, which cost as much as $695 per person, were down 10 percent from last year, according to a spokeswoman. But the number of bands playing at the 73 official and countless unofficial venues continued to grow.


So, too, did the crowds of music pilgrims lining up for bands like the Pains of Being Pure of Heart and the New York Dolls at the scores of free daytime parties that begin well before the last night’s music hangover has worn off.


This year, the congregation at the four-day festival included everyone from Kanye West and monsters of rock Metallica, which came to launch its Guitar Hero video game and play a not-so-secret show, to the lesser-known blogosphere-buzz band Micachu & the Shapes, Brits who brandished their art-pop songs at a handful of gigs around town.


The heavyweight keynoters included producer-arranger-renaissance man Quincy Jones, who advised, in a 2 ½-hour talk, that “we are instruments of a higher power. Music comes through us. You have that attitude, you’ll be creative the rest of your life.”


Little Steven Van Zandt, the E Street Band guitarist and creator of the Underground Garage channel on satellite radio, warned against a “sea of mediocrity” in contemporary music and decried the lack of craftsmanship in pop songwriting.


This year, the representation of major record labels was down. And signs of the influence of music blogs like Brooklyn Vegan were up, as evidenced by the perhaps-hyperbolically titled panel, “Bloggers Are Now in Charge.”


“Nothing can compare to SXSW,” said Bruce Warren, program director of WXPN-FM in Philadelphia and the influential author of Some Velvet Blog. His SXSW favorites included Portland, Ore., indie act Blind Pilot, South African prog-rock band BLK JKS, and New York punk band Peelander-Z. “To really network, go to panels, talk to artists, and try to see where the industry is going, it’s an amazing resource. And if you’re a fan, you can see a lot of great bands.”


SXSW makes sense for baby bands, and it even made sense for hammering hard-rockers Metallica, though the band clashed with the Austin authenticity ethos, unlike last year’s Rock and Roll Hall of Famers R.E.M.


“There’s a ton of media here,” Metallica guitarist Kirk Hammett said in an interview. “And this is a great launch platform ... Metallica has always loved the sneak attack, to come in and play a small show in a small club, and that in itself creates a bit of a vibe. Though this (show) was the worst-kept secret in the world. My mother called me when she heard about it.”


“The best things that happen at SXSW are things you don’t plan,” said British songwriter John Wesley Harding. That could mean walking down Sixth Street and discovering a great band like Atlanta’s punk quartet the Coathangers. Or it could mean what happened to the singer, whose real name is Wesley Stace, at the Austin Convention Center on Thursday.


Stace and Dresden Dolls singer Amanda Palmer were to appear on a panel called “Do a 360 Deal With Yourself,” focused on musicians turning themselves into self-contained small businesses keeping a piece of everything from touring to T-shirts. That was a common theme at the conference, where there was a lot of chatter - and tweeting on Twitter - about the need for an emerging “artistic middle class.”


Because Jones’ talk went long, Stace and Palmer were forced to entertain the crowd outside the conference room, which they did with an impromptu ukulele rendition of Radiohead’s “Creep.” Somebody recorded it on a cell phone and posted it on YouTube, and now it’s linked on blogs everywhere. “That’s the heart and soul of it,” Stace said.


Other good things that come out of SXSW are the result of planning. Mr. Lif, the rapper born Jeff Haynes, has an album called “I Heard It Today” coming out on his own label on April 21, his first since the alt-hip-hopper was badly hurt in a California tour bus accident in 2006.


“So being at SXSW for me is just like a statement. Like, yo, I’m back, I’m officially part of the music industry again,” he says. “I’ve got stickers on me, I’m handing out the CD. I’m just letting cats know. I’m just really trying to walk around and be a business. ... I’m going to spend my own money, and make that investment, and try to make an impact.”


With so much music happening at the same time, SXSW can be more than just physically wearing. “There’s a real element of mental exhaustion to it,” said Matt Aliabadi, of the Chicago publicity firm Biz 3. “You’re always worried that there’s somewhere better to be than where you are.”


Though SXSW is a spring break for the industry, there’s an elephant in the room during any margarita-fueled schmooze: What impact will the crashing global economy have on a business that hinges on people having disposable income?


“When the electricity goes out, my acoustic guitar will still be working,” said Stace, pointing out that affordable diversions are often more valued in hard times. “Screwball comedies pulled a generation out of the Great Depression.”


“People will always want entertainment,” said Radwanski, the manager of Drink Up Buttercup. “It’s one of those things that don’t necessarily get left behind. Even though they’re sad and broke, they want to find something to make them think they’re not. Or at least makes them happy.”


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