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SXSWi Finally Trumps Music

Not that anyone was waiting for it, but 2011 may have been the year that the interactive portion of the festival was bigger than the music portion. SXSW began 25 years ago as a music festival, and the shift is clearly reflecting real world changes.

Interactive parties were filled with live music from the hottest bands this year. Zynga featured the discordant NIN-like Sleigh Bells, while Facebook teamed with IFC to feature the Kills. In a surprise appearance, the Foo Fighters graced the tech crowd (distant pic above) with a first play of their new record, Wasting Light, at the Media Temple SXSWi closing party. 2000+ SXSWers packed into Stubbs to see the band, while music attendees could only stand on the other side of the fence, literally, to listen.

Much of the conversation during the music panels was around technology. The truth is, both sides could learn a lot from each other, especially as the publishing industry struggles with similar issues around content and payment.

Music, as the first real industry casualty of tech, has been forced to innovate to stay alive. In a session on mobile music moving to the cloud, Will Mills (Shazam) chatted with record exec Simon Wheeler (Beggars Group), Alex Ljung (Soundcloud), DJ Richie Hawtin, and EMI exec Elizabeth Brooks about the web as a bi-directional medium.

There was general consensus that the current system of premium subscriptions is working, but they all grapple with how to monetize content that is free to the user. Streaming music is currently 200 times more frequent than downloading, and the execs believe that this will help grow the industry as more companies are born. The panel pointed to Spotify as an example of what is working in the industry. Though not in the US yet, Wheeler noted that Spotify is “up there with the Amazons of this world in terms of generating revenue.”

He went on to say that the industry should “take that as an indication of what a service can achieve. They [Spotify] came to the industry with a business plan, and they are executing really well. It demonstrates that services can generate enough money.”

Acknowledging that the business structures need to change, and there is a big shift in how audiences want to be engaged with music, the panel agreed that music is evolving from a lean back experience to an interactive one. This is an important distinction, especially when it comes to live music.

Hawtin’s Burn Studios is an example of where things are headed – a studio “in the cloud” where users create music collaboratively, then post to SoundCloud. He’s also created apps that work during his live events – he literally hands the DJ booth over to the audience at one point during his show by allowing them to create sounds via mobile apps that are fed back into his system and played live. He likened it to a conductor directing an orchestra.

Cloud services will make “filling up your hard drive look silly,” Wheeler noted. “It could have a net positive affect, but it will take great services.”

The service opportunity, it seems, is in local markets.

“It doesn’t make sense for Apple and Google to try and take on all the markets around the world. Each market is finding it’s own way to get music, and localization of services is important.”

Kirsten Cluthe is a consultant with The Frontier Project and a mediabistro contributor.

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