Who knew throwing indie music festivals was a recession-proof business?

"Certainly, the recession has had some impact," South by Southwest director Roland Swenson says. "As of the first of February, we're running about 10% behind in registrations from where we were last year; it's a significant but not crushing number. We've seen dips like this before."

As for the number of bands booked to play SXSW, set for March 18-22 in Austin, Swenson says the festival is once again running at full capacity. "In terms of applications, we had over 10,000 for the 2009 festival, which is great," he says. "More bands bring more people, but we need to balance it out with being able to accommodate all the bands. In Austin, you're seeing venues tighten their belts, but we haven't seen a large number of venues shutting down. In fact, we've had more offers from venues than we did last year."

Some indie labels, however, say they've noticed SXSW has become increasingly harder to crack. "As a small label, I feel like the odds are stacked against me," says Dan Koplowitz, president of Friendly Fire Records. "It seems like five years ago, they were booking more diverse bands, and now they're really focused on booking stuff that'll pack the clubs. None of my bands got into SXSW, and it was really hard to get any sort of response from them."

Still, this doesn't mean Koplowitz will be skipping the festival. "No matter what, it's a great party," he says. "Some of my friends are not going this year, but plenty are making the trip. When you boil it down, it's still pretty inexpensive for what it is."

The relatively low costs associated with SXSW are also a draw for E1 Music president Bob Frank. "We're not going to fly people in as we have in previous years," he says. "But we are routing some tours around the festival. It's smart business from a label perspective to make sure we get some of our bands down there."

Swenson says that SXSW actually does better in a downturn. "When the economy is tight...

Click here for the full story including the parts of the SXSW business that grew this year, details on the festival's international strength, and more.