Will 2015 Bring A Shrunken SXSW?

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South by Southwest is a month away, and like every year, people are declaring it dead before it even starts.

What are the economic implications of big SxSW sponsors like Chevy, Subway and Doritos pulling out this year?

Brands bring in great swag and expensive artists.

Last year Doritos spent a lot of money to have Lady Gaga perform inside this giant vending machine just to have the city of Austin revoke their permit at the last minute.

And this year the Itunes festival will be missing.  Last year they brought 40 mainstays to the stage like Coldplay and Pitbull.

With some of the biggest headliners gone, some long-terms attendees are choosing to skip the conference.

This will be the first time in 10 years that George Corona misses SXSW. “I’m not going to South by Southwest because the lineup is just overall pretty weak, specifically I think there seems to be a lot of artists just kind of skipping,” says Corona.

The more people agree with Corona, the more the Texas economy is set to lose. The entire conference had more than 100,000 participants last year. It brought $315 million dollars to Texas.

The consequences could be particularly severe for people who depend on those two weeks in March for business.

Danielle Thomas owns an event production company called Big Green House. She says that there are plenty of signs that things are looking dire.

“I think everybody is feeling some sort of waning in business, but nobody is exactly sure what it is,” says Thomas. “Whether it’s producers, vendors, venues –  there are venues that are still available that are normally booked by now, which I think is harbinger.”

And if the revenue to Texas doesn’t match last year’s, a lot of people will be pointing the finger at the city of Austin. It cut event permits this year by 25 percent.

Denise Silverman owns Clink Events in Austin, “I definitely think if they’re limiting the number of permits that its obviously going to affect the amount of revenue that comes into the city.”

But if the festival plateaus or even shrinks this year, it might just be finding its right size.

Last year there was a lot of overcrowding and a tragic hit and run into a crowd. Some event planners are wondering if maybe smaller is better. If so, the conference could be cooler and more profitable than ever. Only time will tell.

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