In the end, SXSW could not overcome coronavirus panic

The city of Austin and organizers of the annual South by Southwest festival tried to resist the coronavirus scare with a stiff middle finger (and a 10-gallon hat filled with hand sanitizer). “Keep calm and carry on, y’all,” is how Austin official Sarah Eckhardt put it earlier this week, when organizers sought to rally the public behind their decision to keep SXSW alive despite mounting public panic over the coronavirus, COVID-19. 

Then came Friday night, and attempts to keep the festival afloat were lost. SXSW tweeted that the event was indeed done.

During a press conference, Austin Mayor Steve Adler said that “based on the recommendation of our public health officer and director of public health, and after consultation with the city manager, I’ve gone ahead and declared a local disaster in the city, and associated with that, have issued an order that effectively cancels SXSW.”

The official closure came after weeks of defiance, even as some of the biggest names were dropping off: First, Twitter and its CEO Jack Dorsey backed out, then the dam broke: Facebook, TikTok, Vevo, WarnerMedia, Mashable and on and on, announced they would be skipping.

On Friday, Lush Cosmetics said it would no longer go through with an art installation it planned right around the corner from the Austin Convention Center. Equinox also pulled out.

Coronavirus concerns are is growing around the country. The virus has infected more than 100,000 people around the world, leading to more than 3,000 deaths. There are some who think the panic is worse than the health risk, but ultimately that wasn’t a stance SXSW could maintain.

“SXSW will faithfully follow the city’s directions,” the organizers said. “We are devastated to share this news with you. ‘The show must go on’ is in our DNA, and this is the first time in 34 years that the March event will not take place. We are now working through the ramifications of this unprecedented situation.”

The closure leaves behind a number of questions and disputes. The festival typically attracts 400,000 visitors, many people from the worlds of tech, music, film, media and advertising. Last year’s festival, organizers said, brought $356 million into the local economy.

“The economic impact to the entire city is pretty substantial, and that is really going to hurt,” said Manny Flores, CEO of Austin-based ad agency Third Ear, whose client is Visit Austin, the city’s tourism and convention bureau. “You can’t have another SXSW  later in the year … you just can’t make it up, it’s money that is gone forever. It’s tough, it’s hard.”

But he said city leaders made the move “for the right reasons … this thing is the real deal.”

Like other ad agencies, Third Ear (formerly called LatinWorks) is taking its own precautions. The shop’s media department will soon begin working from home, which Flores described as a “dry run” to see how it works in the event that the agency decides to have everyone work from home. 

Brands put down big money to sponsor installations, like the one Lush Cosmetics planned—a wall of its soap to represent mistreatment of immigrants and inviting attendees to “UnBuild That Wall.”

Verizon planned a virtual reality demonstration, creating a prospect of sharing VR headsets that seems unwise in the current climate.

TikTok, Twitter, Mashable and Patreon planned SXSW houses, which are common brand plays at the festival. They host performances and guests.

One attendee, who was still deciding whether to attend before SXSW made the official decision, says the company planned to spend almost $100,000, including a $20,000 restaurant reservation. Now, with the event canceled, the company will start looking for refunds. “I think for us the good news is that we haven’t spent all of it,” the exec said. “That’s the positive, but now we will get to work calling hotels and airlines to get refunds and rebates.”

SXSW had been under immense public pressure to scrap the March 13-22 event, which is known for large interactive installations, concerts, parties, and a packed Austin Convention Center stuffed with panels and speakers.

Health officials throughout the world are tracking the coronavirus, and other cities have taken drastic measures. Los Angeles County declared a state of emergency over the threat of the virus earlier this week.

Depending on whom one asks, COVID-19 fears are either overblown, causing undue hysteria, or the virus is a pandemic risk that is being woefully mishandled. Many independent health experts say that SXSW could have proceeded safely. The virus is here, it’s not going anywhere, they said, but city (and festival) life can continue with a few modifications.

SXSW has long pitted Austin natives—who kvetch about the event’s disruption to their backyard in a good year—against the tech and entertainment industry elites who mob its downtown. This year, an online petition at change.org accumulated more than 50,000 signatures calling for SXSW to shut down. 

Wven James Bond was postponed: MGM and NBC Universal earlier this week moved the release of “No Time to Die” from April to later this year. TV conglomerates including Fox and Comcast have canceled upfront meetings with advertisers, where they planned to show off their fall lineups of shows in the coming weeks. Larger gatherings including Facebook’s F8, Google I/O, Adobe Summit 2020, Shoptalk and others have either postponed or shifted their conferences into online streaming events.

Even if the risks are limited, which health officials in the U.S. say they are, no company wants to be at the center of a public relations nightmare during one of the biggest panics in recent years. Austin and SXSW officials say they were prepared to make alterations to the flow of the event that would have emphasized sanitation and limited exposure to any contagions. That means there would have  been a lot more “bowing” and “elbow-bumping” versus handshakes and hugs, Austin health officials said.

There also would have been far fewer people than normal. “I can see the tumbleweeds blowing down Sixth Street [Austin’s main drag],” said one frequent festival-goer, a marketing executive at a major brand who discussed the virus’ impact on condition of anonymity. 

As of Friday, Google, Reddit, Snapchat and Patreon were all still committed to SXSW. The event was even adding speakers including Hillary Rodham Clinton, who has been on a public tour promoting a new Hulu documentary.

No fear

SXSW officials probably wished all attendees had the attitude of Kerri Pollard, senior VP of creator partnerships and marketing at Patreon. When companies were getting skittish, Pollard was confident. “There is no change in plans,” Pollard said in a phone interview earlier this week. “We will be there in full force.” Obviously, not any more.

Patreon, the fan-funding site that facilitates payments to online creators, planned a SXSW house, a common setup for prominent exhibitors. 

Patreon had been in constant contact with SXSW officials adjusting plans for how to handle crowds, Pollard said. The festival was taking on more cleaning crews to wipe down surfaces more frequently at places like Patreon’s house, Pollard said.

Those were just some of the precautions. At the press conference earlier this week, health and city officials described a series of mitigation tactics meant to limit the risk of spreading coronavirus: screening employees for illnesses or fevers before they showed up for work; providing additional hand sanitizers and hand-washing stations; and distributing signs around the event reminding people to take the proper hygienic care. Officials are also assessing ways to “lessen social contact” by possibly reducing the number of people allowed in venues at a time, said Mark Escott, medical director for Austin Public Health.

Brands had been meeting with their ad agency partners trying to assess the risk of attending SXSW. The festival is known for its long lines, music concerts, crowded bars, and massive advertising installations. Media companies and retailers host pop-up attractions showing off their latest movies, shows and products. Target’s new delivery app, Shipped, was planning to host a site to demo its services.

But what do you do when that demonstration includes touchscreens that would be a prime surface to transmit coronavirus? “With an interactive experience, you limit the immersiveness,” said Claire Holland, VP of marketing communications at AE Agency, an experiential marketing firm. 

Holland and her colleague, Dustin Lamprecht, director of production at AE Agency, work with a number of brands that attend SXSW, including Target. Although the firm was not directly handling any activities this year, it was consulting with brands ahead of the festival. These types of deliberations apply to any public gathering where a brand would host an exhibit.

For a brand like Shipped, it could still have done touchscreen demonstrations, but a single employee would handle the hardware, not allowing the public to interact with it, Lamprecht said

Cancel culture

Industries and cities around the world have been significantly impacted by the coronavirus. As last count, there were almost 40 cases of the virus reported near Seattle, where Microsoft, Starbucks and Amazon are based. Microsoft and Amazon issued advisories to employees in the city to work from home. 

Starbucks canceled its annual March investor conference and notified workers that it was implementing new sanitation standards at all its stores.

Barcelona’s Mobile World Congress was canceled in February. The Geneva International Motor Show was canceled this month, under a general ban on gatherings of more than 1,000 people in Switzerland. 

There are events that were still going forward, hoping for an outlook shift by the time they begin, like the 2020 Tokyo Summer Olympics in July. The Interactive Advertising Bureau’s digital NewFronts in New York were still on schedule for April and May, with companies that have been pulling out of other events, including Amazon and Twitter, still on tap. The NewFronts are the digital equivalent to TV’s upfronts, where online video companies present their new content lineups.

News Corp. and Comcast’s decision to postpone or cancel their upfront meetings in the coming weeks showed that even those private corporate gatherings are at risk.

On top of pulling out of SXSW activities, Facebook canceled its F8 developer conference, set for May. “We plan to replace the in-person F8 event with locally hosted events, videos and live-streamed content,” Facebook reported earlier this month. 

That appears to be a popular alternative for the coronavirus outbreak era. Facebook, Google, Adobe and others have been moving the business events to their websites, limiting the need for in-person contact.

It’s an idea that some SXSW attendees would have liked to see catch on at the festival. Work & Co, which originally had two of its partners speaking at sessions and four others attending, canceled attendance. The agency suggested to organizers that its speakers dial in remotely instead.

Why South-by?

So why did SXSW even think it could keep its doors open while the rest of the world was going into bunker mode? The city said it left the decision to the panel of experts that included county judge Eckhardt, medical director Escott and Mayor Adler. The group said it would base the call on the level of risk to public health independent of any financial concerns. “No corporation or SXSW or anybody else has a seat at that table,” Adler said of the health panel making the call on whether to host the event. “Because we’re only motivated by making sure that we do what we can to keep the community safe.”

At their press conference last week, Austin officials reported that the city and state have been testing for coronavirus for months; there were at least 17 confirmed cases in Texas as of March 6, according to The New York Times. Experts say that there is no way to contain the virus entirely and that communities will be disrupted.

“I believe this is not a containable virus, and we are going to have widespread community involvement with this virus,” said Amesh Adalja, a medical doctor and senior scholar
at the Johns Hopkins Center for Health Security.

That was also the operating assumption of Austin health officials, who were trying to weigh if any outbreak would be worsened by hosting events like SXSW. Officials did concede that hosting such public events could lead to virus cases developing sooner, but not that there would be more cases over the long haul. “I think that these are very hard decisions to make,” Adalja said during a recent phone interview, “and there’s not a one-size-fits-all answer for every event. If they take proper precautions, I don’t necessarily think they need to cancel SXSW.”

Some attendees criticized the organizers before they canceled. “They’re so tied to the event,” said an executive from a company that canceled, who spoke on condition of anonymity. “They seem to be taking a stance of ‘hell or high water.’ The cynical person in me thinks it’s just a money grab at this point.”

That cynical person was proved wrong. But there’s always 2021.

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