SXSW: Where Tech Mingles with Music

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Facebook has other music-related initiatives in the works, though they're probably not going to get much billing at SXWS. The company is in talks with major music labels to sell music on its site, BusinessWeek has learned. While an announcement is not imminent, insiders say the labels want to strike a deal. "Something is in the works," says one insider from Sony BMG. "Not being able to sell music through Facebook would be a huge lost opportunity." The sticking points are disagreements over pricing and copyright control. Earlier this month, the Financial Times reported the discussions.

For Some, A Breakout Event

SXSW is also rising in popularity among techies hoping to become a breakout hit of the conference. Last year, Twitter exploded onto the scene after winning an award for best blog—and installing giant plasma TV screens that broadcast the Twitter feeds of conference attendees.

Animoto, a Web video service, is among the startups angling for airtime in Austin. The company is a finalist in the film and television category for its service, which lets users turn photos uploaded to social networking sites into documentary-type films. CEO Brad Jefferson shelled out $10,000—the most marketing money his company has ever spent—to promote his application at the conference. "For a startup it's a big chunk" of cash, says Jefferson. But he thinks it will be worth it: "[SXSW] is this interesting combination of film, music, and interactive, so it was absolutely perfect."

Facebook is putting marketing money behind its efforts as well. The company plans to host two events at the conference. The first, Motion, is intended to showcase how Facebook can help distribute and promote films via members' social connections. The second, dubbed Night of Mayhem, is a party for developers, encouraging them to build applications on the site. Each event features live music and an open bar.

That points to one of the other big SXSW draws. Mixing live bands and open bars with business is a surefire way to attract a bunch of people stuck at their desks all day. "I want to meet smart, engaging people. I want to see some new tools that we can take advantage of," says Hellweg. "And I want to eat some great barbecue."

Holahan is a writer for BusinessWeek.com in New York. Ante is computer editor for BusinessWeek. His book, Creative Capital: Georges Doriot and the Birth of Venture Capital, will be published by Harvard Business School Press in April, 2008.