For those unfamiliar, SXSW is rather unique in the world for being far more than a conference, trade show, or film or music festival — it’s an economic engine, a cultural touchstone, and, arguably, the defining force that made Austin a global hub for innovation and creativity. But in 2025, something felt… off. The conference, which has shaped Austin’s tech and startup scene as much as its music and film industries, was just… well… changing.

Before I go on and raise the ire of some close friends who work with SXSW or in respective organizations, let me reiterate that I am a huge fan and proponent of SXSW and what they’ve accomplished. This isn’t a negative criticism but some criticism none-the-less, because it’s observation from a long-time attendee, promoter, speaker, and evangelist. In my work with cities throughout the world, SXSW is among my most frequently cited ideals of what an ecosystem wants to have in place for the sake of innovation and entrepreneurship; thus, with my kid gloves on, I want to share some observations, concerns, and encouragements, in hopes that this will reach the right people and we can help SXSW evolve with Austin in the ideal direction.

This year, venues that were once packed were empty and though we were still under quarantine. Attendance felt down and though I don’t have any actual numbers to confirm that, venues, artists, and people in lines all agreed, it felt sparse. Big brand sponsorships seemed fewer. And promotion — usually a drumbeat that starts in November — was barely noticeable until late February. Was this an intentional shift? A strategic misstep? A reflection of Austin’s broader economic challenges? And with Penske Media Corporation (PMC) now holding a stake in changing SXSW, is this a signal that the festival is being reshaped into something new — perhaps into something more aligned with the deep-pocketed film and television industries, at the expense of the music scene that built it?

“Its new decentralized strategy – spreading conferences across hotels, music venues and cultural spaces – could redefine how cities host major events.” Gordon Young, Editor-in-Chief The Drum has a great assessment which I’m going to refer to a few times to tie together my own thoughts.

This is an inflection point for SXSW, and for Austin itself. The city is changing—some would say for the better, others would argue for the worse. And the question isn’t just whether SXSW can adapt. It’s whether downtown Austin still has the capacity to sustain the festival that once put it on the map.

SXSW is Interactive

SXSW began in 1987 as a small music festival with one purpose: to showcase Austin’s local and regional music scene. The idea was simple — if New York and LA were the dominant music markets, then Austin, with its gritty live-music venues, indie and local artist love, and DIY ethos, could be the proving ground for artists trying to break out.

It worked. SXSW became a critical stop for the music industry, a place where labels, producers, and journalists scouted talent – coincidentally, just as some years later, would be the case with startups. The festival was a reflection of its city, and by the late ’90s, Austin was becoming known for something beyond music — technology. Dell, founded in 1984, had put Austin on the tech map. The city was attracting early-stage internet companies, and a burgeoning entrepreneurial scene was taking root.

Recognizing this shift, SXSW expanded in 1994 to include SXSW Interactive while Film became a specific division and focus. Interactive, in particular, was an afterthought at first — a niche event running alongside music. But in 2007, that changed when Twitter launched at SXSW, proving that the festival wasn’t just a place for indie rock — it was where the future of technology was being shaped. Soon, major players like Google, Facebook, and Uber were launching products there and the 2010s, SXSW Interactive had become the startup and innovation event of the year, often compared to CES but with a scrappier, Austin-esque with a Silicon Valley twist – frankly, like it or not, in my work with VC, SXSW was where to go.

The Changing Face of Austin: Growth, Affordability, and Mobility Challenges

Austin’s transformation over the past 25 years has been nothing short of staggering. The city’s population has doubled since 2000, tech companies have set up massive campuses, and high-rise luxury condos have replaced the bungalows and dive bars that once defined downtown (to the chagrin of most).

A growth accelerated, so did challenges. Housing affordability, once one of Austin’s major draws, evaporated. The cost of living downtown skyrocketed, and many of the artists, musicians, and creatives who made the city cool in the first place were priced out. A 2024 Austin Economic Report found that Austin now ranks as the second least affordable housing market in the U.S. relative to income levels.

Historic and arts venues have been hit hardest. Places like the Hole in the Wall have struggled under rising rents while the list is depressingly endless covering the names of famous or beloved places now gone. The city’s reputation as the “Live Music Capital of the World” is under threat — not because the music isn’t here, but because the venues that support it struggle.

And then there’s mobility. Austin’s infrastructure was never designed for the sheer number of people now living, working, and attending festivals downtown. SXSW, once easily navigable, now requires Uber rides between venues or long walks or pedicabs across a city that still lacks an adequate transit system – notably, even pedicabs were incredibly absent in 2025 compared to years past.

It all started to feel as if SXSW as experienced in 2025 was intentional…

Penske Media Group’s Investment and the Future of Experiential Media

In 2021, Penske Media Corporation (PMC), which owns publications like Hollywood Reporter, Rolling Stone, Variety, and Billboard, acquired a 50% stake in SXSW. The move was surprising to some, but to those of us in the thick of this world, it makes perfect sense.

Traditional media is dying. One of my favorites from told-you-so collection (yes, I go there) is that I wrote about this in 2013 when journalists and PR professionals came at me hard for being critical. Advertising revenue has plummeted. Subscription models have failed to replace lost ad dollars. Journalists are underpaid, and newsrooms are shrinking. In this landscape, media companies are realizing that the future isn’t just in reporting events — it’s in creating them.

Vivek Rana, Managing Partner of Gnothi Seauton, covered in exploring How Brands Are Building Newsrooms And Redefining Media In 2025, “Brands are no longer content to advertise in traditional media outlets; instead, they are becoming the media themselves.”

SXSW is a perfect vehicle for this transformation. The festival isn’t just a place to report on emerging trends — it’s where media companies can actively participate in shaping them. Penske’s investment is part of a broader strategy to make media more experiential, more immersive, and ultimately, more profitable.

So, was 2025 intentional?

This year, several things stood out that indicate a shift is already happening:

• Fewer venues in use: Large portions of the usual SXSW footprint were dark. Attendees were forced to travel more to find events, creating a fragmented experience.
• Declining attendance: While official numbers haven’t been released, multiple sources have reported a noticeable drop in attendance compared to previous years.
• Less brand presence: Previous years saw a wide variety of sponsors — from Fortune 500s to scrappy startups. This year, sponsorships seemed fewer and more concentrated.
• Delayed promotions: Usually, buzz around SXSW starts in November. This year, marketing efforts didn’t seem to ramp up until February, prompting no more speculation that I know of than my own, that organizers were still figuring things out.
• Erosion of Local Authenticity: The influx of global brands and commercialization has subtly diluted the local essence that once defined SXSW. This shift risks alienating the very community that fostered the festival’s unique identity and it’s a critical piece of the puzzle because people come to SXSW to experience Austin <- fail to expose and support those experiences, and people can get similar talks and music back home.
• Volunteer Workforce Challenges: The festival’s reliance on volunteers has long been brilliant given alignment with spring break and students who remain in town looking for something fun to do.
• Shifting Demographics and Expectations: As Austin attracts a more affluent populace, the festival faces pressure to cater to upscale tastes, potentially sidelining emerging artists and grassroots initiatives that have historically been its backbone.

And the biggest change evidence that yes, changes are intentional: A now announced new format for 2026. Next year’s festival will be condensed into a single week (March 12-18) instead of stretching across two weekends. Music showcases will now be integrated into the broader festival, rather than having their own dedicated weekend.

Are my other observations intentional? Planned? Or are they accidental, circumstantial, or cause for concern? I don’t know, that’s why I’m writing this – entrepreneurs, marketers, and economists all know that we can’t explore solutions to make something better if we aren’t realistic about causes for concern.

What’s Really Happening? Some Theories

1. A Shift Toward Film & TV: With deeper pockets and bigger marketing budgets, film and television bring in more revenue than music. PMC might be subtly pivoting SXSW to focus more on those industries.
2. Financial Struggles for Music Venues: Several venues shared with me that their revenue was down substantially this year, at a time when most of the city makes up a lion’s share of annual revenue during this particular week in Austin.
3. Austin’s Cost Crisis is Affecting SXSW: Rising costs have made it harder for smaller companies and artists to participate, meaning the event is becoming more exclusive. The local community could have easily highlighted this challenge, for years now both musicians and entrepreneurs have been pushed out of the city given a cost that just doesn’t make sense for creators to absorb.
4. Experiential Media Integration: PMC’s investment reflects a strategic move towards experiential media. By integrating their media assets with live events, they aim to create immersive experiences that resonate with audiences seeking authenticity. Gordon Young, “Experiential marketing is no longer a side act – it is the main event. Whether it’s live activations that shift based on audience energy or brand spaces designed as destinations, the future is about storytelling, not selling.”
5. Economic Pressures on Local Venues: Austin’s escalating costs have strained local venues, many of which rely heavily on SXSW for annual revenue. The festival’s restructuring and dispersed format may have inadvertently impacted these establishments, leading to financial challenges and a potential decline in the city’s live music scene.?
6. Evolving Audience Preferences: The rise of digital platforms and virtual events, accelerated by the COVID-19 pandemic, has altered audience expectations. There’s a growing demand for hybrid experiences that combine physical attendance with digital accessibility, prompting SXSW to adapt its offerings accordingly.

Let me point us back to Young’s perspective, “The future of TV isn’t passive. NBCUniversal is proving that ‘lighthouse events’ – think SNL’s 50th and Bravocon – are more valuable than traditional ad buys. Fans don’t just watch; they participate, creating organic engagement that outperforms any paid placement.

Meanwhile, media strategist Evan Shapiro called out broadcasters for failing to meet audiences where they are. His suggestion? “The BBC needs a Fortnite correspondent.” His point: trust in legacy media is fading and brands that fail to adapt to new platforms will be left behind.”

The media landscape’s economics undeniably favor film and television due to higher revenues and advertising potential. This reality may influence SXSW’s programming decisions, potentially skewing focus towards these lucrative sectors. However, it’s crucial to acknowledge that music remains the festival’s soul and a significant draw for attendees. Neglecting this aspect could erode the very essence of SXSW and undermine Austin’s identity as the “Live Music Capital of the World.” Reports indicate a decline in artist participation, with numbers dropping from approximately 2,000 acts per year to just over 1,000 in 2025.

And here’s why, something to appreciate again – SXSW is an economic engine of Texas, not just a conference or festival:

• “Austin” itself is a draw to experience Austin in March – something now not what it was
• Live music is spirit of that – if dispersed or overshadowed, we don’t have a festival, we have a typical Friday night for Austin music
• Interactive (technology, startups, and venture capital) is what makes SXSW inspiring and exciting
• Film and Television are, frankly, second to the rest and though it might be the most profitable or valuable economically, it isn’t the WHY behind SXSW – I fear losing the globally meaningful impact of SXSW in a shift away from what attracts everyone to Austin

How to Fix SXSW Before It Becomes Just Another Trade Show

1. Early and Inclusive Promotion: Engaging the local ecosystem at least six months in advance can foster community involvement and generate grassroots support. Collaborative planning with local artists, venues, thought leaders, and residents is the source of the festival’s authentic spirit.
2. Financial Support for Local Venues: Partnering with the City of Austin to subsidize costs for local venues can help maintain a concentrated festival footprint. This approach ensures that smaller establishments remain integral to the SXSW experience, preserving Austin’s cultural fabric.
3. Enhanced Mobility Solutions: Improving transportation options, such as ensuring a high density of affordable ride-sharing services, can alleviate logistical challenges and keep it from feeling like it had to spread out. Particularly with the coming renovation of the Convention Center, where is the epicenter to be and what might we celebrate nearby?
4. Reimagined Festival Layout: Consider alternative locations. Months ago I proposed that it needs to be established along Barton Springs Road (a divisive suggestion met with anger from residents and praise from others). Here’s the point of it though: walking distance to “downtown” while being within spitting distance of the lake + Zilker Park (known to you perhaps because of ACL) bookends one side while Palmer Events Center and the Long Center cap the other + in between great restaurants, venues, and ZACH theater + South Congress creating an L shape off of Barton Springs Road. All, most importantly, still feeling characteristically like Austin rather than just another downtown.

Ideal? Making everyone happy? No, of course not, but we work with what we can, and I’ve not heard a better possibility other than sprawling from far East Austin, miles down West 6th, and all the way down to, who knows where, San Marcos?? While any change is going to find both detractors and supporters (hell, here I am being both), the fact is it is going to change and I’d like to celebrate and see collaboration with Austin, to keep it quintessentially Austin and an economic engine of both the entrepreneur and artist ecosystems as well as locally owned restaurants, venues, and workforce that have come to consider it paramount.

SXSW stands at a crossroads, reflecting broader shifts within Austin and the media landscape. By acknowledging and addressing these underlying factors, stakeholders can collaborate to preserve the festival’s essence while adapting to contemporary realities. This collective effort is vital to maintaining SXSW as a cultural and economic engine for Texas, ensuring its continued relevance and vibrancy in the years to come.

What’s exciting for me, being here, is that as I continue to talk with governments throughout the world about how to develop meaningful startup ecosystems, SXSW remains a shining example of what needs to be in place, and now we’ll experience together if it can evolve and thrive, just as would have to happen to such a thing anywhere in the world.