Features & Columns

SXSW: The Festival that Ate Austin & Took a Bite out of Silicon Valley

Austin's quirky culture and the SXSW music, film and interactive festival
contributed to its rise as the new technology mecca.
SXSW INTERACTIVE: SXSW Interactive head Hugh Forrest discussed economic impacts. Photo by Dan Pulcrano

The morning run to Austin is full as usual on the second Thursday in March, and just about everyone is immersed in their devices. The millennial in the window seat talks to his Netflix colleague about his impending 30th birthday. Midway through the flight, I paged through Rudy Rucker and Bruce Sterling's new Transreal Cyberpunk anthology. I noticed that my two seatmates had picked up books and gone analog as well, a fitting prologue to the digital days ahead. South by Southwest, which also turns 30 this year, remains an idiosyncratic and improbable event. Two years ago, mass surveillance whistleblower Edward Snowden's virtual interview was the most-talked-about appearance. A couple of years before, Bruce Springsteen. This year it's President Obama.

Austin, Texas native Hugh Forrest spent the festival's opening Friday with the 300-member White House security and advance team, "then sitting around for two hours waiting for it to happen." While Obama was down the street shaking hands with the kitchen staff at Torchy's Tacos and offering to buy patrons lunch, Forrest, the young-looking 53-year-old head of the SXSW Interactive, learned, minutes before he walked on stage to introduce the commander-in-chief, that one of SXSW's four original founders had died. Then the president walked in and said, "Let's do this," Forrest recalls.

"The reason I'm here really is to recruit all of you," Obama told the audience, which he presupposed was filled with technical wizards who can help him hack some of the nation's problems. As far as conference speakers go, it doesn't get any more A-list than that. Every year, the press dutifully reports that SXSW is no longer indie, alternative or cool; that it's peaked or gone mainstream; that another Twitter, Foursquare or Airbnb is unlikely to spring from its ranks. Nonetheless, the event continues like a force of nature, with no end in sight.

A few hours after the big event, Forrest is back checking email in the pipe-and-drape cubicle behind the registration counter that serves as SXSW's command center at the Austin Convention Center. The suit he'd uncharacteristically worn for the introduction hangs next to a freshly-autographed Shepherd Fairey "Hope" poster.

Nick Barbaro, pony-tailed publisher of the alt-weekly Austin Chronicle and co-owner of the festival, sits in a lounge chair and munches on a trail bar. The son of 1946 Miss America Marilyn Buferd and an Italian submarine commander, Barbaro was raised in Los Angeles and studied film criticism at the University of Texas, where he met fellow film buff Louis Black, his business partner in the Chronicle and SXSW. The festival, originally a music and film event, grew out of "that era of leftist cultural criticism," says Barbaro, who writes a weekly soccer column.

He empathizes with Austinites who bemoan the commercialization of an event whose sponsors include Bud Light and McDonald's, admitting, "Capitalism bothers me." That ambivalence has not put a damper on a phenomenon that has transformed modern Austin into a boomtown. The festival contributes $317 million annually to the local economy, a festival-commissioned economic impact study calculates, the equivalent of half to two-thirds of a Super Bowl every year.

"We're not bringing them to an arena and selling them beer, though. It's decentralized," Barbaro notes. "The whole city is benefiting. For many businesses, it's their biggest weeks of the year. It's their Christmas season. I'm kind of proud we are contributing to that."

More than 35,000 people registered for SXSW Interactive and almost 50,000 historically register for the music, film and education events. At least another 150,000 show up for the parties and overall madness but never bother to buy a badge. "We never thought we would be so successful," Barbaro understates.

His technical competence doesn't extend much past email. "I don't have a Facebook. I tweeted twice. Maybe three times," he says. "I enjoyed it. I may do it again some day."

Barbaro also maintains there have been no discussions about selling the event either. "We don't have an exit plan," he says with a shrug.

Brand Austin

In the early 1990s, Louis Black had taken me and another newspaper editor on a tour of Austin's clubs, on the eve of what was then just a modest regional music festival. Austin in those days was a hippie town with a scrappy live music scene, and its downtown was filled with unpaved parking lots. Its culture was more authentic than cosmopolitan, and Texas' capitol city was subject to the rises and falls of the oil industry and a five-month flurry of activity in odd-numbered years, when the legislature meets.

How did Austin go from an economic backwater to the place where the President of the United States went to recruit the technical elite, bypassing Silicon Valley? Austin Mayor Steve Adler acknowledged SXSW's transformative role when he introduced SXSW's Forrest, "whose legacy changed my city," to a gathering of U.S. mayors at SXSW earlier this month.

"It helped create this brand Austin," Forrest told the mayors.

Forrest called the pre-1998 days for the "small, struggling event" a "12-year valley of death." After six more years of building, "the hockey stick started in 2004. We were in the right place at the right time talking about this social media stuff."

Attendees enjoyed the music, weather and friendly locals and some were impressed enough to move to town. A few started companies. Housing prices were still low, just like in the early days of Silicon Valley.

Presently, San Jose and Austin, in that order, are the nation's top economies, measured by growth in gross domestic output. San Jose residents have the nation's most patents; Austin dwellers are a close second in innovation.

While our area has the edge in industrial output, Austin outpaces the valley by other benchmarks. While San Jose grew by an impressive 42 percent between 1985 and 2015, Austin more than doubled its population. In the past 10 years, Austin added more than 200,000 residents, double San Jose's growth during that period. The Austin metropolitan area's population stands at about 2 million, bigger even than Santa Clara County, which has been one of California's fastest growing.

Austin has erected 25 highrises in the past 10 years—with nine completed last year alone. If laid end-to-end, the 25 buildings would extend a mile and a half. San Jose during the same period produced seven highrises that would stack up to less than a fifth that high. (San Francisco built just eight, which would collectively rise three-quarters of a vertical mile.)

Thirteen of Austin's highrises exceed the height of anything in Silicon Valley. They include the 56-story Austonian, the tallest U.S. residential building west of the Mississippi River, overtaking its 44-story 360 Condominiums, which briefly reined as the highest.

The Austonian's glory will be short-lived, however, as it will soon be bested by a 58-story residential tower with a private theater and dog lounge that residents have taken to calling the "Jenga Tower." Also under construction: a 50-story, $350 million Fairmont Austin, which at 1.4 million square feet will clock in as the world's largest Fairmont property. (No slouch, San Jose has some million-plus developments slated, including a mixed-use project near the arena and a planned 4 million square foot Apple expansion in North San Jose.)

Some of Austin's biggest wins have been small scale, such as the preservation of a neighborhood of small, historic wooden bungalows on Rainey Street, now a hopping bar and restaurant district.

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