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A [SXSW] festival pass can cost almost $800 a person. A band gets either wristbands or $250, which is enough to buy enough gas to get your van maybe 15 hours away from Austin, one way. Most bands are from outside that radius, and are well within the range of losing a shit ton of money by coming. In exchange, sxsw gets access to the best bands in the world, every club in Austin, and sponsorship money from all the coolest companies on earth. One of the more creatively heinous examples of branding I learned about this year was the Green Label Sound record label, which is a branding exercise of Mountain Dew soda. When my friend was offered to do a record with Green Label Sound for many thousands of dollars, I was happy to concede that it was a great deal for his specific band. Then I saw the giant 4 panel billboard for Green Label Sound right next to Stubbs on Red River St. Great for Chromeo, Neon Indian and the two other bands on the advert I forget ("great" in the sincere and non-facetious sense) and realized how maybe it was a bit more of a serious issue than I'd thought. Think of all the bands that had to blow their wallets apart to get to their one sxsw showcase, and all the partiers who had to pay to fly or hitchhike from Greenpoint or Plymouth to get to Austin in order to create the cultural critical mass that allowed Mountain Dew to greenlight a giant billboard in the epicenter of American indie rock. Think of why there is so much free beer and cigarettes and energy drinks at sxsw, and why every year there is even more, and why every year there are a dozen more huge shows presented by even bigger companies than last year. It's because you paid your money to go there and see these ads...
...Sxsw then can be seen as an economic battle ground. Our first time down there in 2007, the biggest buzz was about how sxsw was shutting down unofficial venues left and right, presumably because the money and the buzz created by those shows was flowing away from the festival, rather than towards it. The shows were mostly free, which made them irresistible to music consumers tired of needing to buy expensive passes from sxsw to check out cool bands. This is a pretty good analogy for what then started to happen to the entire industry - it became possible for fans who had spent most of their lives buying CD's (that they knew cost 50 cents to produce but cost $17.99 to buy) to download them on the internet for free, and record labels, who started seeing CD sales plummet, immediately starting trying to shut these sites down. While sxsw quickly learned to lay off the free parties and start using them to their advantage, the record industry has yet to figure out how to profit from "illegal" downloading. This year the focus of the festival was free parties only tangentially related to sxsw. Sxsw knows that it's never going to shut down every free party, so it makes more sense just to let them happen, and use the initiatives of the bands and labels and companies throwing these parties make sxsw as a whole more appealing.
The above are just two choice paragraphs from a brilliant blog post.
