February 27, 2014

#SXSW — Moscow in Texas' top event has a labor problem

Or rather, SXSW has a not paying labor problem. Yes, I'm being snarky about the "Moscow in Texas" part, but actually, I don't think Austin is Texas' most liberal city. It's at least arguable; see the bottom.

Anyway ...

South by Southwest, or SXSW, the Austin-based film and music festival (or it was, before exploding into an "event") illustrates the difference between neoliberals and real liberals, especially in the so-called "creative" world.

When any for-profit organization, like SXSW, talks about "paying" beginning-level helpers in the coin of "experience" rather than money, something is definitely rotten in that particular Denmark.
I discovered that almost all the people working at SXSW are paid in similar “perks,” not U.S. currency. If you work 30 hours as a volunteer, you get a pair of T-shirts “to prove you were there”; 50 hours gets you inside one of the three conferences that make up SXSW (“Music,” “Film,” or “Interactive”); and 80 hours gets you access to everything, though you won’t have time to see much of it (SXSW itself says that if seeing the festival is what you’re after, “we strongly recommend that you buy a badge”).
Yeah, that's pretty sucktacular. And, per the subhead of the story, we're  not talking about a few people. We're talking about 3,000 volunteers.

And even performers are paid in the coin of "exposure":
The artists who come to SXSW aren’t compensated much better. Plane tickets and accommodations are on the band, which SXSW pays with either $250 or free admission to the music festival — one or the other, not both. 
Even Hitler knows a rip-off when he sees it:

But, you and I won't get in for anything close to free.
While much of the labor at SXSW may be free, tickets are not. If you order six months ahead of time, a pass to the film festival will set you back $495, as opposed to $650 if you buy now. A music badge costs $625 if you order ahead of time and $795 at the door, while access to everything costs from $1,295 to $1,695.
So, how much profit do SXSW organizers skim?

We don't know. But guesstimates say that it's more than "exposure":
“As a privately held company, SXSW doesn’t release any financial information,” said spokesperson Elizabeth Derczo when I called her up.

That’s not quite true. The company is quick to highlight its financial impact on the city of Austin, with a study it commissioned claiming that the 2013 event injected $218 million into the local economy. What it doesn’t release is information about the money it injects into the pockets of its board of directors. What we do know is SXSW Inc. brings in enough money that in 2010 the company purchased a brand-new, 20,828-square-foot office building that was appraised at $4.8 million. ...

So are the people running SXSW getting rich, then? Rob Patterson of the Austin Post asked (Roland Swenson, a co-founder and managing director of SXSW), that question in an interview last year.

“Are we getting rich? What is rich? I’m not sure what that means,” Swenson replied, sounding like someone who is certainly not poor. “To me rich means that I don’t have to work anymore. And if that’s the case, I’m not rich.
And, I'll take a further guesstimate. Let's average advance and near-event tickets and say the average attendee pays $550. If there's 70,000 attendees, that's $38.5 million.

And, I'm not even counting the hundreds of thousands of dinero that SXSW gets from its corporate sponsors. Nor the more than 500 exhibitors' booth spaces fees, which start at $2,880 for a basic 10x10 and rapidly get pricier. I'll guesstimate $10,000 average and round to an even 500 booths. Another $5 million. An average of $5,000 a spot for, say, 40 ads in the programs? Chump change of "only" $200K.  This doesn't count the corporation's (yep, my blog, and that's what we're calling it) 5x a year magazine and ad rates there, the $5,000 per blog company/product placement on SXSW blogging, and more. All this info comes courtesy of the SXSW marketing guide.

So, SXSW is easily grossing $50 million a year. Read that again. I'm not talking about the $200M a year that Swenson claims SXSW contributes to the greater Austin economy. I'm talking about what his organization grosses.

I'm a bit new to this; a quick hit on teh Google shows there's been complaints for a few years. But, I am the first one I've read, after that Googling, to take a stab at SXSW's own revenue stream.

And, this is only for the "traditional" SXSW in March. It doesn't count other events, whether in Austin or now, in Vegas, Baby! Per that Austin Post link:
The Las Vegas Convention & Visitors Bureau came to us about doing it. And they wrote a check. ... It wasn't enough to pay for it, but it will certainly reduce the pain of its losses in the first year. I don't know. If we get 1,000 people we'll be happy.
To me, it looks like Roland Swenson is trying to create a new TED-like set-up. Next? A SXSE (for the geography) in Miami, perhaps? While expanding their real estate holdings in Austin at the same time?

It also looks to me like Roland Swenson is probably not "getting" rich but is already rich, too.

So, if you're a real liberal?

Skip SXSW. Don't condone bad behavior by attending.

And, if you're a "creative" person seeking your first "break"? Please, as tempting as it may be, stop falling for the "exposure" angle, if it's a for-profit company that's clearly making a profit dangling it in front of your eyes.

Things like this are another reason I also argue that El Paso, not Austin, is Texas' most liberal major city.

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