South by Southwest festival appears to be playing above the economic static

[10 March 2009]

By Preston Jones

McClatchy Newspapers (MCT)

Despite the almost-hourly economic doom and gloom, the subject line of a recent e-mail blast from the press office at South by Southwest - that huge multiday film/interactive/music confab that hits Austin every March - provided a cheery ray of light: “Off Key Economy Won’t Hit Sour Notes at SXSW Music 2009.”

It’s not only the music portion of SXSW staying in tune - the film and interactive portions get under way this week, with a full slate of movies, speakers and panel discussions kicking off Friday - with the music portion firing up March 18. Event organizers say that external turmoil notwithstanding, SXSW is actually weathering the storm and, in some cases, doing better than expected.

The SXSW music festival and conference is entering its 23rd year, firmly established as one of the premier events on the industry calendar, a place where unknowns can be catapulted into the spotlight, bands on the verge can break big and veterans can enjoy a valedictory lap. It’s spring break - attendees often describe SXSW as a “working vacation” with straight faces - mixed with business meetings, panel discussions and lots of late-night barbecue and beer.

But as people continue grappling with miseries inflicted by failing banks, foreclosed homes and slashed jobs, there is scarcely an industry in America untouched by the current recession, including the music, film and technology sectors. Given that ongoing turbulence, the SXSW powers that be must be sweating a little, right?

Not so much.

“We are seeing some effects - we’re down in registration for the music event maybe 10 percent (but) haven’t seen as much of a drop-off in press credentials, sponsorship, registration and all of the other kinds of people that come to SXSW, so it’s a little hard to say where we’re going to end up,” says Roland Swenson, SXSW’s managing director. “We may be down a little bit, we may be flat (but) I doubt if we’ll be up.

“We’ve been in business for 22 years - this will be our 23rd event - so we’ve weathered a number of recessions over the course of our career here. 9-11 was a real big dip for us; this isn’t as bad as that, at this point. So it’s nothing we haven’t dealt with before - we’re not really panicking or anything like that.”

Swenson projects cautious calm, but the fact remains that things have changed - and not for the better. As other festivals around the country either implement payment plans or pull the plug outright, SXSW is in something of a unique position, largely because it isn’t beholden to consumers, who are not SXSW’s primary focus. Nevertheless, as Swenson says, the festival isn’t hitting the panic button just yet - and some statistics from the Austin Convention and Visitors Bureau provide a balm for any jangled nerves.

“Austin has maintained a sort of relative stability in the current economic downturn, but we’re certainly not immune from it,” says Beth Krauss, the bureau’s media-relations manager. “SXSW is one of our biggest events, and last year they brought about $103 million into the economy. ... They’re also anticipating that they’ll have 100,000 attendees, which is pretty close to what they had last year. For the most part, our downtown hotels are sold out - there are a handful of rooms here and there.”

Packed hotels, healthy attendance estimates, an abundance of bands, films and speakers on the schedule - what could go wrong? If anyone feels the pinch this year, it will likely be sponsors, the companies that line up to plaster logos all over Sixth Street and the convention center and to host massive, star-studded and exclusive parties, while papering the town with free brochures and leaflets and glossy, hip publications.

Swenson feels that, if anything, the economy may help streamline the SXSW experience.

“I think because money is tight, when that happens it weeds out the hangers-on,” Swenson says. “I think the people that are coming are very serious about having a productive business experience here.”

Mike Davis, who teaches economics and finance at Southern Methodist University’s Cox School of Business, says corporations of all stripes must now reevaluate public perceptions, particularly for high-profile events like SXSW.

“It’s one thing to go and spend $150,000 on a hospitality tent and feed a bunch of people if business is going great,” Davis says. “It’s another thing to do that when business is declining and you’re laying off people. It may still be good business sense, but just the appearance of doing that stuff in a down economy is something that firms are being very careful about.”

In previous years, SXSW has played host to a flood of regional and national publications sponsoring venues, stages and performances, but this year, says Bruce Starr, talent and branding maestro with New York City’s BMF Media, those who do put money into the festival and conference will do so selectively, precisely targeting the audience they want to reach.

“Instead of having 10 gifting lounges, you’ll only see three,” Starr says. “You’re seeing some of the bigger ones dropping out. It’s very hit or miss - I think your typical brands ... who’ve really taken (South by Southwest) over in years past have definitely stepped down.”

No one interviewed cared to speculate about the 2010 edition of SXSW or whether the economy may have a delayed effect upon the festival and conference, except to say that this year will probably be more closely watched than most recent editions. And while music registration has dropped, SXSW again has a silver lining, in that its other components - film and interactive - are experiencing an uptick in attendance.

“We’re having a great year in terms of getting acts to come and play and films to premiere, and the interactive event has grown dramatically ... by 30 percent this year, so that’s softening the blow for us,” Swenson says. “That’s also been kind of a pattern for us: In years when maybe financially things aren’t so great, creatively they seem to go really well, I’m not sure why.”

Perhaps bands are drawn to SXSW for the ease of hitting a lot of folks at once - depending upon how many showcases a band plays, how many interviews it sits for or how many appearances it makes on local TV and radio stations, SXSW can serve as six months’ worth of promotion crammed into four days.

“We have this inverse relationship with the economy,” Swenson says. “When money is tight, we actually become more attractive to people who are trying to promote some creative product. It’s cheaper than an ad campaign, to come down here and perform or show your work than a lot of other means of promotion.”

For their part, bands like Fort Worth’s Telegraph Canyon, which will play its first-ever SXSW showcase this year, are maximizing the opportunity and keeping an eye on expenses. The Fort Worth band is renting a parking spot for its RV at $10 a night. Frontman Chris Johnson says regardless of the economy’s health, some things never change for indie bands.

“I can’t say that we’d be staying in a fabulous hotel if the economy would be better,” Johnson says. “I think in general people that go to fests like this are common, everyday people. ... When the economy tanked, the gas went down (and) that was the thing that affected the little guy and the bands everywhere. With the gas prices all down, it’s heaven for us.”

At its core, SXSW has always strived to be about finding and promoting what’s new and what’s next (its detractors would argue that it has strayed from that ideal in recent years), but amid all the statistics and what-ifs, Swenson pauses to echo that belief: “As long as kids keep picking up guitars and kids are on their computers creating stuff and getting their parents’ cameras and making movies, there’s always going to be an audience for what we do.”

It is too early to truly know whether the shaky economy will have any significant impact - good or bad - upon SXSW, but the simple fact is that the festival and conference has always been appealing and, most important, affordable for those looking to bask in music, movies or the latest technology for little money.

“People are looking to have a good time, and Austin is a pretty affordable destination as a general rule,” Krauss says. “One of the beautiful things, I think, about SXSW is that there are so many free showcases, and a whole lot of couch-surfing goes on. People come into town and hang out with their friends and they go to the free showcases and they just walk around downtown and they still get to be part of this amazing thing, whether or not they’re in the industry.

“I think it’s an appealing event during an economic downturn, because it doesn’t cost a lot if you don’t want it to.”

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