Skift Take

Is it tough to keep it cool and relevant? You bet. But the South by Southwest festival in Austin has found some secrets to packing 'em in every year. SXSW is one of the subjects in Skift’s recent sixth anniversary book, For the Long Haul, Lessons on Business Longevity, whose chapters we are excerpting for you here in the coming weeks.

Jesse DeFlorio always booked his trips to South by Southwest the same way every year, by flying into Austin three days early and flying out of Austin three days late.

For seven years beginning in 2009, the Los Angeles-based music photographer took his talents to Austin, shooting photos of bands performing at the annual, internationally known music, film, and interactive festival. DeFlorio spent his time backstage at PureVolume House, and later, the Hype Hotel, pop-up music venues where up-and-coming artists played shows, and took portraits of all the musicians. South by Southwest was always a working trip for DeFlorio, but he always built in extra time to enjoy and explore the city.

“It’s the live music capital of the world,” he says. “I’ve been touring for 12 years, and I’ve never seen another city with that density of music venues that close to one another.” In other words, making time for arguably the creative capital of the United States was just as important as being part of perhaps the most creative live event of the last 30 years.

What began as a small music festival in 1987 thought up by staffers of a local alt-weekly has morphed into a gargantuan gathering, a conference that incorporates a variety of events not only in the music industry but also in film, technology, government, education, and about a dozen other industries, including gaming, fashion, food, and health. Speakers at the 2018 conference, more commonly known by the abbreviation SXSW and popularly name-checked as “South-by,” included Bernie Sanders, Ira Glass, and Susan Wojcicki.

“We’ve always just tried to put on the best event we could and then looked to see how many people were going to show up,” says Roland Swenson, one of the co-founders and current managing director of SXSW. “We never took it for granted that it would always work. We could have fallen off, and almost did a few times.”

Read About the Secrets to Business Longevity in Skift’s New Book, For the Long Haul

South-by’s approach has always been about anticipating the times, making slight changes to an ever-innovating festival, and hoping that people kept coming back. For Swenson and crew, growing SXSW over three decades was as much about playing off of Austin’s appeal to outsiders as it was about letting those outsiders determine the festival’s scope. “Now we have a big health component, a big space exploration component, a sports track,” he says. “It’s mostly reacting to different visitors who showed up to SXSW, and that’s how we grew.”

By expanding its offerings while not losing sight of the fundamental goal — showcasing Austin as a creative hub — SXSW has expanded its audience year after year. Today, SXSW routinely pulls in well over 100,000 visitors (and more than 200,000, if you count guest-pass holders who visit the free public events) and more than $300 million in economic activity each March to the capital of Texas.

“SXSW is homegrown and it’s authentic, and it really is an expression of who we are,” says Molly Alexander, executive vice president of economic development at the Downtown Austin Alliance. “I think the most brilliant thing about it is that it does evolve and change.”

Making It Easy for People to Stay in Town

SXSW started as a music festival, but none of its organizers knew just how big it would become when they first came together in the late 1980s to begin planning for the first edition in 1987.

Among that early crew was Nick Barbaro, who moved to Austin in 1975 to attend the University of Texas at Austin. He would join forces with Swenson and others later, but in the mid-1970s Barbaro was just a college student in a small city, relative to the other cultural juggernauts of the U.S., who was told by the locals that he arrived a decade too late.

“Already I was hearing, ‘Aw man, you missed it. It’s not like the good ol’ days,’” recalls Barbaro, co-director of SXSW and publisher of the Austin Chronicle weekly alternative newspaper since 1981. “But there has always been a creative community here, and there has been a music scene here since before World War II.”

Austin’s musical heritage runs deep. It’s the place where seminal artists like Janis Joplin, Stevie Ray Vaughan, and Willie Nelson cut their teeth, and where renowned musicians from across the country came to play at Austin City Limits, the weekly PBS show begun in 1976 to shine a light on Texas music that has now morphed into another eponymous music festival held every year. Tourists today take tours of Congress Street and the 6th Street Entertainment District to get a taste of that musical legacy.

It’s that history and musical creativity that a handful of people at the Austin Chronicle first sought to highlight when they began having meetings in 1986, discussing the future of entertainment and the media, and scheming up ways to bring the best of both worlds to Austin, and possibly keep them there. “If you finished school and were casting around for things to do, there were all these creative things in town. We tried to set up an infrastructure to make it easy for people to stay in town,” Barbaro says.

The first SXSW kicked off in March 1987 with 177 artists performing. Barbaro, Swenson, and crew expected only the 150 attendees who had registered beforehand, but on opening day, 700 people arrived. Over that first half-decade, SXSW grew rapidly, with bigger crowds attending each year along with bigger names on stage: Willie Nelson, the Dixie Chicks, Townes Van Zandt. Festival programming combined with the charms of Austin managed to keep attendance growing and attendees interested.

“Austin was unique in that you could find every genre of music in different nightclubs: punk rock, blues, country and western, jazz,” Swenson says. “They were all relatively close together, so people could move from one club to another. That was a big part of our appeal.”

In 1993, the first year SXSW was held in the new Austin Conference Center, Ann Richards, then the governor of Texas, delivered the keynote. “Texas music has become much more than what you hear in a bar with the chicken wire stretched between the band and the patrons,” she said in a thick Texas drawl, just after telling audience members that it’s “literally the truth” that Austin during SXSW is the “center of the musical universe.”

While Richards’ speech focused on the city’s musical culture, it was nevertheless an early glimpse at how the festival would evolve to incorporate more than just music.

Baked into SXSW from the beginning was the idea that it would be more than a music festival. Many of the organizers, including Swenson and Barbaro, were alumni of the film school at the University of Texas at Austin. They founded the Chronicle, in part, as a way to publish their own film criticism. But early decisions they made at the the paper — like purchasing computers at the very beginning of desktop publishing, even though the machines were slow — would inform moves they made later with SXSW.

In 1994, SXSW introduced its Film and Media Conference, the same year the music side of the event snared Johnny Cash as its keynote speaker. One year later, the joint conference would split into separate film and multimedia conferences. A few years after that, the latter was renamed the interactive portion of SXSW, which technology executives, startup founders, and venture capitalists flock to today.

“That’s been a big part of our growth because we’ve just expanded the topics we can cover because of the nature of that [Interactive] festival,” Swenson says.

By the end of the 1990s, SXSW was drawing close to 900 performing musicians every year, and that was just on the music side. The symbiotic nature of having a multitude of creative minds descend upon one location for an intense number of days was already taking shape. It’s the same symbiosis that has benefited other large gatherings like Burning Man, which started one year before SXSW and now draws tech executives in addition to the usual freer spirits.

“We draw a lot of creative people,” says Swenson. “They’re all here looking for ideas, looking for new things in the culture, but mostly just to meet each other.”

Evolving With a City

SXSW organizers, visitors to Austin, and those in the economic development sector of Austin’s economy will tell you the growth of the event has mirrored the growth of the city, and vice versa. When it comes to Austin and SXSW, it’s the urban equivalent of the classic conundrum: Which came first, the chicken or the egg? “The two are intertwined inextricably,” Barbaro says.

Today there are more than one million residents in Austin. Taller buildings and a greater density of businesses and residents have transformed the downtown skyline. A new international airport and a new convention center — where former Governor Richards spoke during the 1993 SXSW — were built, further enabling SXSW’s expansion.

Downtown Austin Alliance’s Alexander points out that while Austin is still a second-tier U.S. city, both in terms of population and amenities, its association with the festival has drastically increased the city’s cachet and visibility. It’s unsurprising to see Austin on lists of cities where millennials might consider moving. According to Alexander, that type of recognition spiked as SXSW became a bigger event. “[The city] really emerged internationally when it added Interactive.”

In the first decade of the 21st century, SXSW became the place where apps and electronics converge. It was Apple that chose to launch its iPad 2 during SXSW in 2011. The event has invited speakers like Mark Zuckerberg. As the tech sector has ballooned in the U.S., a rapidly gentrifying San Francisco has made tech companies eager to branch out to new locations. Austin has been a direct beneficiary of that impulse. “Many major tech firms and companies are setting up their shops in Austin,” says Sumeet Shah, principal at Brand Foundry, a New York venture capital firm that just set up an office in the city.

It’s a centrally located city that also hosts SXSW’s interactive component, which quickly became a meeting place for top tech talent and new startups. It’s where Twitter took off: The social network took SXSW by storm in 2007 when it won Best Blog at that year’s Web Awards. (The rest, as they say, is history.) As early as SXSW 1995, a bandana-clad Willie Nelson took the stage during the closing party at the Austin Music Hall to sing about Microsoft.

Over the years, SXSW grew in popularity the same way Austin did: by not being averse to outsiders. Both the festival and the city were willing to take newcomers’ projections of what they were expecting into consideration as they designed new spaces and events for visitors and city transplants. From its earliest days, SXSW knew this would be a strength of its festival so long as they were willing to change along with the types of attendees who were streaming to Austin year after year. By 2014, SXSW was pulling in around 70,000 attendees.

A New Tricky Balance

Yet as SXSW and Austin have both grown, the event and the city have changed in ways that are not always seen in the most favorable light by either event attendees or city residents. When Barbaro moved to Austin in the 1970s, he said it was a great home base for bands because of the dirt-cheap rent. Getting a loft, he says, would cost $150 a month, and it would be a space big enough for band members to both practice and live in. The city today is “hugely more expensive,” he says.

“I’m very much on the side that Austin has grown too much,” says Barbaro. “[SXSW] could take some of the credit, or some of the blame, depending on how you look at it. And I think we do have to take some of that blame or credit.” Over the years, visitors’ introduction to Austin has increasingly been through SXSW. They might have decided to put down roots in Austin afterward, but the city got on their radar thanks to a mega-conference that started out as a small music festival.

Los Angeles-based photographer DeFlorio credits the SXSW organizers with their vision for growth. “They were smart to not just try to make it a music festival,” he says. But with each SXSW he attended, he did notice that local residents, frustrated with a swarm of outsiders flooding into Austin yet again, were just waiting for the week to be over. And the changing nature of the event year after year has altered how bands, and their fans, experience the music portion of the event.

“There’s been a huge shift from it being just a music destination for small bands and up-and-coming bands. They’d grind into the ground playing seven to eight shows,” he says. “Now it seems you fly in, play the big corporate event, make your money, and get out.”

Or, if what happened at SXSW last year indicates, not at all. “I think the bubble has now burst,” says Justin Malone, operating partner for the Waller Ballroom and Waller Creek Pub House, to Digiday in an article published on the opening day of SXSW 2017. “In the past, corporations spent lots of money on SXSW, but when they looked at the bottom line they didn’t see return on investment. I think it’s hard to quantify how much they get from a conference.”

That’s the existential threat to a long-running conference. Where’s the point of diminishing returns for attendees who aren’t Austin natives? Today, untethered from the Chronicle, SXSW operates on its own and does a good business selling badges, which start at $825 and increase in price as South-by time draws nearer. But big brands like Yahoo and Microsoft stopped sponsoring large events in 2016. People know what SXSW is; they know what to expect from it.

In other words, the SXSW model has been around for so long that it’s easy for people to think it’s growing a little stale. Other, fresher cities are replicating its success. In New Orleans, the Collision Conference is billed explicitly as a tech conference — the segment of SXSW that garners the most media attention these days — and draws participation from Microsoft, Facebook, Google, and more. It also piggybacks on the annual Jazz Fest. The new 36/86 conference in Nashville is another example of an event marketed specifically as a tech event, and its selling points are virtually the same as Austin’s: Come to a growing, southern city with a vibrant music scene in a location that gets you away from San Francisco and New York.

Austin, by contrast, took a bit of a hit from the all-powerful tech economy at SXSW 2017. The source of the grumbling was the quintessential first-world problem — no Uber or Lyft, as the city had banned those services over a dispute about fingerprinting drivers — but it was enough to make the lack of ridesharing one of the media themes from last year’s event. (It seems as though the state listened: Legislation signed by Texas’ governor last spring superseded the city’s ridesharing rules to allow Uber and Lyft the ability to operate once again in Austin.)

What’s more, festivals like New Orleans’ Collision or Nashville’s 36/86 also have the benefit of being fresh in people’s minds. Even if they do have similar themes to SXSW, the fact that they’ve only been around several years is actually a strength. SXSW runs the risk of diluting its own authenticity. When does a creative event become merely a networking opportunity? The conference sometimes seems more like an in-person version of LinkedIn: Saying you attended is more important than actually participating.

SXSW will have a tricky balance to strike going forward. It will continue to expand offerings, which was exactly what led to SXSW being such a long-running festival business. In 2018 SXSW featured its first Cities Summit, a two-day conference track with panels on urbanism, creativity, and technology. But the brand should expand carefully. Cities make sense for its core audience, but it risks losing track of its focus on music, film, and tech.

Still Marquee Event for the Calendar

Given some of the pressures SXSW has faced in recent years, how do conference organizers let the event evolve to keep it going for another 30 years?

Swenson recalls the early days, when he and his fellow organizers were trying to anticipate how culture might change throughout the 1990s and beyond. They talked a lot about what entertainment would be like. They figured music and movies would always be around. They predicted that computers would play an expanding role across multiple industries. They didn’t know exactly what would happen, but they thought a SXSW that had a hand in each area would be able to thrive.

“We figured we needed to have a three-legged stool with a leg in each discipline,” he says. “The three events have been growing closer and closer together, and overlapping.” The overlap might make it hard to distinguish SXSW’s core events from each other. For those interested in just a music scene, wading through a packed week — and city — to find what appeals to them can be a challenge. But that overlap has also been a strength of SXSW, and likely the single major reason for its growth.

Tech, music, and culture didn’t have anywhere to meet before SXSW. And as technology has grown to become a bigger part of the culture, SXSW has proved to be a catalyst, and a testing ground. The conference is a place where companies can meet users, and where users can find the newest things in tech and culture, all in a fun, creative place.

That spirit of creativity and the convergence of innovation across different industries is what keeps people coming back. “I think for a lot of people it is a marquee event on their calendar,” says Swenson.

Andrew Zaleski is a freelance journalist in Washington, D.C., who has also written for Wired, Men’s Health, Popular Science, and the Washington Post Magazine.


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Tags: austin, for the long haul, South By Southwest

Photo credit: Indie, dance-pop band Rubblebucket performing at a recent SXSW festival. Wikimedia

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