In Austin, most local music venues, bars, and restaurants that overflowed with fans and industry elite from around the globe during the typically buzzy week of South by Southwest now sit comparatively empty within a desolate city. The colossal international festival, which was canceled last year due to the onset of the novel coronavirus pandemic, is taking place virtually this year.
The 2020 cancellation of the March festivities hit the Austin live music industry hard. “Devastating is the one-word answer,” says Mikey Wheeler, the general manager of Red River venue and bar Mohawk. “People severely underestimate the impact that this one event has on our music industry in this city.” One of the hottest live music locales during SXSW and beyond, hosting artists such as Gary Clark Jr., the Roots, Sleigh Bells, and many others, it has been temporarily closed for over a year now.
The main source of profits for live music venues are tours and concerts, almost all of which have been canceled or postponed. “It would be very hard to find a business model that could sustain a year with zero revenue,” Wheeler says. Without the continued support from loans and grants from the government, coupled with fundraisers, Mohawk wouldn’t exist right now.
Reiterating Wheeler’s sentiments is Cody Cowan, the executive director of the Red River Cultural District, an association and cultural section of downtown Austin. “Businesses in the district and downtown more broadly take in anywhere between 10 percent and 50 percent of their annual income from SXSW,” he says, which includes venues such as Mohawk, Cheer Up Charlies, Stubb’s, and Empire Control Room. To go without two physical SXSWs in a row, albeit for valid public health and safety reasons, is still “deeply impactful to the music industry in Austin that was built on the back of SXSW,” he says.
Besides live music, SXSW events mean other revenue streams for restaurants and bars, from rental fees to brand buy-outs to food and beverage services. Last year, Rainey Street bar and restaurant Banger’s Sausage House & Beer Garden gave most of the funds back to the people who couldn’t commit to moving their SXSW corporate events to future dates. “We really tried to do the right thing,” owner Ben Siegel says. The profit loss amounted to approximately $300,000. For the events they were able to postpone, “it was less impactful” on the business, he says. “It’s like a delayed loss of revenue.”
Now faced with this week’s digital SXSW, Austin venues, restaurants, and bars are embracing new kinds of programming to keep their staff engaged while also generating money to keep their doors open.
Partnering With Charitable Organizations
The pivot from in-person festivities to the digital format of SXSW has no doubt resulted in the major loss of profits for the Austin economy, especially small businesses. To offer further financial assistance to the Austin service industry, the festival teamed up with charitable foundations.
“We’re fortunate in that we know our SXSW community is looking for ways to direct a bit of goodwill towards Austin,” Jann Baskett, the festival’s chief brand officer, tells Eater. “We’re happy to use our platform to raise awareness and funds for organizations providing relief to creatives and hospitality workers.” Those groups include Red River Cultural District’s service industry grant program Banding Together ATX and Southern Smoke, a Houston-based crisis relief organization focused on the food and beverage industry.
There are two items available for sale in SXSW’s online store benefiting Southern Smoke: a food-themed T-shirt designed by local artist Lauren Dickens and a small cookbook featuring recipes from local restaurants often frequented by attendees, such as Cisco’s, Veracruz All Natural, and Wu Chow. A portion of the proceeds will go to the foundation’s Austin Restaurant Relief fund.
During the four-day digital festival, Austin barbecue icon and Southern Smoke board member Aaron Franklin will make brief video appearances. He’ll speak about the current challenges in the restaurant community while highlighting ways to help.
Another aspect of the online-only festival is the virtual-reality world featuring recreations of Red River and Congress Avenue venues such as Mohawk, Empire Control Room, and the Paramount Theatre. The SXSW Online XR includes portals leading into the venues, where participants will learn more about Banding Together ATX — a program formed last year in response to the cancellation of SXSW as a way to help unemployed music service and hospitality workers. At the time, “probably 98 percent of the people I knew were unemployed within a week,” Cowan says. Since its inception, the program has helped over 3,000 people in the greater Austin area and has donated $225,000 in EBT gift cards. Currently, the nonprofit is raising money for the fifth phase of the fund. “I’m hearing from people on the ground that times are tougher now than they were a year ago, or even this past summer,” he says.
A frequent SXSW participant is news channel CNN, which has had a big presence during the festival on Rainey Street for the past five years, taking over bars such as Bungalow and Parlor Room. Typically, the company works with local vendors, explains Matt Dornic, the head of strategic communications for CNN Worldwide, “so that we’re supporting small businesses in Austin and we’re giving our guests a taste of Austin.” For 2020, the network — part of WarnerMedia — had planned a large program, but pulled out of the event 10 days before it was set to take place and ahead of the official cancellation.
Since this year’s SXSW isn’t taking place in person, CNN created gift boxes featuring snacks and drinks for select SXSW Online attendees. “Spirits are so low, and people are trapped in their houses,” Dornic says, “so delivering a taste of what was and what will be SXSW has gone over really well.”
Caroline Cook, a senior marketing manager for CNN, helped design the box for its digital events. She wanted to translate the vibe of being on Rainey Street during SXSW with items that channel that “fun, free-spirited experience.” For drinks, the package includes cocktail recipes from Bungalow and Parlor Room, Tito’s Vodka, and a surprise product from Tex-Mex restaurant El Arroyo. The boxes include snacks from local brands such as salsas from Crenshaw’s, gluten-free chips from Siete Foods, and nuts from Austinuts.
To give back to the Austin service industry community, CNN is also making a donation to Banding Together ATX’s emergency relief grant program. “We want to touch the lives of those who take such good care of us whenever we’re on the ground for SXSW,” Cook says.
Looking Elsewhere for Revenue
To offset some of the loss in revenue, many bars and restaurants have followed suit by getting more creative with their business configurations. “What can you do to your basic model to try to make it more attractive or make more sense in this time?” Siegel wonders. “What can we do outside of our normal model that can also bring in additional revenue?”
In that vein, Banger’s launched a retail sausage line in fall 2020 in partnership with Goldbelly, an ecommerce store that helps local businesses sell and deliver their goods across the country. The restaurant is also catering to local businesses, and it has released event-geared meal kits.
This week, as an ode to SXSW, Banger’s is hosting a live music showcase, Bang x Bang Bang 2021. The Rainey bar’s spacious outdoor space allows for socializing, but in a safe, socially distanced atmosphere. Hand sanitizer and health checks are administered upon entry, along with other virus mitigation measures so the bar can be a safe place while still providing “a fun and escapist experience,” Siegel says.
On the opposite spectrum of Banger’s, Mohawk plans to remain closed to the public until it can host an enjoyable and safe event for music fans again. “We’ve always been committed to safety and to also providing a fun experience,” says Wheeler. “We haven’t found a way we can safely produce an experience that we would feel proud of.”
What’s best for the economy is not necessarily best for the overall well-being of the people that put the dollars into the various businesses. Will Austinites ever be able to rock out safely again? Only time will tell.
Though SXSW looks different this year, Austin bars and music venues are making the most of it while staying operational safely and giving back. “I’m encouraged about the future,” Cowan says. “I think the road to get there is going to be longer and harder than a lot of us realize,” but there will eventually be an end.