Breaking: Microsoft, Yahoo Pulling Out of SXSW

Microsoft's 'Windows Astronaut' at South by Southwest (SXSW) 2007 (Tara Hunt CC by 2.0)
  • Save

Microsoft's 'Windows Astronaut' at South by Southwest (SXSW) 2007 (Tara Hunt CC by 2.0)
  • Save
Microsoft’s ‘Windows Astronaut’ at SXSW 2007 (Tara Hunt CC by 2.0)

FBI chief James Comey isn’t the only one pulling out of South by Southwest.  We’ve now learned that major brands like Microsoft, Yahoo, and even Accenture are no-shows at SXSW 2017.

No, this has nothing to do with the immigration imbroglio (though foreign artists may be cancelling their plans).  But it has everything to do with results.

Or, lack thereof.  After years of massive sponsorship outlays, major brands appear to be dialing back their South by Southwest commitments.

Or, not showing up at all.  According to details tipped by advertising journal DigiDay, Microsoft will be conspicuously absent this time around.  “Microsoft pulled out this year, which is huge,” said Justin Malone, operating partner for Austin venues Waller Ballroom and Waller Creek Pub House.

“I think the bubble has now burst.”

Yahoo has its own demons, and may simply not have the cash anymore.  “Yahoo had been at SXSW for six or seven years but it pulled out last year and has never come back,” Malone relayed.  Just recently, Yahoo buyer Verizon chopped its bid by $350 million following a massive user data breach.

Accenture, a far healthier company, is also jumping ship.  According to the DigiDay report, Accenture Interactive global head of digital content for Donna Tuths has also scratched South by Southwest from the list.  She pointed  to events like Social Media Week as reasons for the pullout.

Others are massively scaling back.  That includes Spotify, which is dialing down its splashy ‘Spotify House’ in favor of smaller, private recording sessions.  Capitol One, Fader, and a raft of advertising agencies are also dialing things down.

Is Spotify Going Bankrupt In 2017? Wall Street Delivers Another Red Flag

All of which is a stark contrast from earlier days.  Perhaps Doritos’ building-sized vending machine stage was the start of a mega-branding era, one that may be getting crunched.  Just a few years ago, insiders pointed to massive expansion plans at SXSW that included huge partners like Pepsi, Budweiser, and others.

Social media vs. Mob

But instead of blowing up, things seem to be deflating.  And part of that may simply be due to the growing impact of social networks and micro-targeting.  Instead of splashing millions to reach a mob of tens of thousands, brands may be more interesting in spending thousands to reach millions.

On top of that, platforms like Facebook, Twitter, Snapchat and even Spotify are giving brands far greater targeting options.  But even on the broader web, micro-targeting and demographic slicing is getting better every year.  Perhaps brands are figuring out ways to reach their targets with more precision, for far less money.

Maybe bands should be doing the same.

How to Measure the Value of Playlist Placement

4 Responses

  1. Anonymous

    SXSW, as it was for a long time early on, is dead. They just keep bringing in more and more bigger and bigger artists, defeating the whole purpose of having so many unsigned bands.

    At the very least they should just own up to it and become another normal music festival.

  2. Anonymous

    I think you will see this trend over the next few years with all festivals. What some of them want for sponsorships are crazy. They all have to either lower their costs or lose sponsors.

    • Stentor

      Back in the days when consumers broadly had to pay for music media, concerts and festivals promoted the rolling of the machine. It all stayed in the black. Now it’s please subsidize our new music business model, and we’ll figure out how to monetize it tomorrow, or next year, or eventually, we expect, we hope… but business will always be business.

  3. David

    Events in Europe like Primavera, Liverpool Sound City, Reeperbahn show that’s their still life in the model. But SXSW has become too big and irrelevant.