SXSW Enters Its Post-Doritos Phase, But the Brand Party Is Far From Over

South by Southwest's 2014 edition marked a turning point for the Austin conference -- and indeed, for large-scale music confabs as a whole. Safety concerns (a March 13 car accident caused four fatalities and more than 20 injuries) coupled with criticism of its shamelessly corporate stages (iTunes, Doritos and Subway were just three of the many sponsored showcases) could have foretold a mass exodus -- and, based on the departure of several major sponsors, there almost was. But on the eve of the 29th annual conference, which runs March 13-22, it's looking like big business as usual -- albeit with a slightly quieter tone.

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For starters, SXSW is scaling back. In January, the Austin Center for Events announced a 25 percent reduction in permits for the 2015 festival, estimated by sources to be roughly 100 fewer official events, with earlier submission deadlines to allow for more streamlined safety, sound and traffic requirements. By February, the list of returning sponsors had dwindled: 2014 partners Chevrolet, Subway, Apple, Pennzoil and Doritos all declined to renew their activations -- and indeed, some felt the activations had reached a comical peak with Doritos' six-story vending machine stage, which towered over Sixth Street and made some artists (including indie-rock act Diiv) feel like unwitting spokespeople for the snack food.

Even longtime SXSW party planners started to feel the effect when up-and-coming bands looking for a big break were dwarfed by showcasing A-listers like Lady Gaga, Coldplay, Jay Z and Kanye West in 2014. "We were approached by brands [who wanted] Blake Shelton to play. Why have him play SXSW? If you're bringing the wrong thing, you're wasting your marketing dollars," says Alan Sartirana, founder-publisher of Flood magazine, which will host its inaugural FloodFest at SXSW featuring Spoon, Run the Jewels and Twin Shadow -- hardly newcomers but not Jay and Kanye-level either.

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As SXSW reopens its many hotels to an estimated 72,000 registrants -- the festival does not release attendance figures until after the event -- there are few signs beyond the slashed permits that would indicate a major dent in its economic impact on the city of Austin, which in 2014 was $315 million (up a whopping $97 million from 2013). Scott McNearney, SXSW's sponsorships chief, anticipates more than 6,000 individual events during the 10-day conference, and attributes this year's brand departures to typical promotion-cycle turnover (Subway and Pennzoil signed on as one-year partners tied to product launches, while Doritos was at the end of a three-year contract).

Perhaps most significantly, even though there are fewer sponsors overall, the revenue is higher. SXSW 2015 has a record ten Super Sponsors (Miller Lite, Esurance, AT&T, IFC, Mazda, Monster Energy, McDonald's, Capital One, PepsiCo and The Austin Chronicle), paying mid six-figures to upwards of $1 million each on sponsorship, activation and talent fees, that will support the entirety of the conference's Interactive, Film and Music portions -- compared with seven in 2014 -- with nary an oversized vending machine in sight.

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Still, this year's festival already has had a brush with controversy after McDonald's was called out in a March 5 Facebook post by indie-pop duo Ex Cops for inviting bands to play an unpaid showcase. But the company revised its approach on March 10, saying through a representative, "All bands performing at our showcase will be compensated."

This article first appeared in the March 21 issue of Billboard.