2011 SXSW Economic Impact Report Shows Power of Music Festivals
A recent report on the economic impact of the SXSW Conferences & Festivals on the city of Austin is a reminder that such gatherings are not just good for promoting a locale but also provide direct economic benefits. Yet many festivals are getting defunded or canceled due to financial concerns. Are such cuts short sighted or simply pragmatic?
The now sprawling SXSW empire is a major operation but its core legitimacy and popularity was built on a festival featuring indie music acts. In a recent report, 2011 SXSW Economic Impact Report, Greyhill Advisors found that SXSW 2011, an events empire built on a music festival, was "directly and indirectly responsible for injecting approximately $167 million into the Austin economy."
The report combined the year-round expenditures of the SXSW organization, the local expenses of the many attendees of the events and the "induced" impact of subsequent spending by local employees who profit from serving SXSW attendees. In addition, a quantification of the value of press coverage received by SXSW and the city of Austin reached nearly $38 million.
Such approaches, that take into account the full economic impact of a festival or music conference, must be employed when deciding whether or not a festival should be supported by public funds. In fact, cities also receive benefits from private and corporate funding of festivals.
The ability of LA's Grand Performances to present free concerts even in this difficult economic environment is based on creative revenue streams and a combination of foundation support and donations.
Yet, as city council member Jan Perry points out, "not only has Grand Performances helped make downtown L.A. more attractive to everyone from developers to tourists, it's one of the best things about the area."
Fortunately, folks all over the country are recognizing the ability of music to draw a crowd. Last year, students at the University of Tennessee conducted an analysis of the Tennessee Valley Fair and developed recommendations to increase attendance. These recommendations included a Battle of the Bands, school choir competitions and roving musicians in addition to the Fair's full line-up of concerts.
With dwindling budgets impacting everyone, it's more important than ever to find ways to demonstrate the positive economic impact of music festivals and related arts, because it's far too easy for folks to be manipulated into thinking the arts are superfluous in times of financial stress.
Hypebot contributor Clyde Smith is a freelance writer and blogger. He is currently relaunching Flux Research to pursue his long-standing obsession with web business models. To suggest music services and related topics for review at Hypebot, please contact: clyde(at)fluxresearch(dot)com.
