Amid growing concerns over the evolving coronavirus outbreak, several SXSW partners dropped out of their slotted appearances citing fears over community spread.
Most recently, both Apple and Netflix added their names to the growing list of dropouts for the festival. Others include Twitter CEO Jack Dorsey, Facebook, Vevo, TikTok, and Panasonic. Furthermore, SXSW faces public pressure to cancel the entire event. A change.org petition amassed 50,000 signatures calling for its cancellation.
Yet still, its organizers remain on the fence. With only a week to go until the first day of the 10-day event, little time remains.
Chief among concerns are the economic ramifications for SXSW. The festival accounts for over $350 million in spending for the city. $157 million of that from last year’s festival came from the company’s funds, investing in the event. Months of planning lead up to the week and a half entertainment and technology event. A cancellation scraps all of that.
Insurance Offers No Respite
While they may carry insurance, it likely wouldn’t cover the cost if they were to cancel. In speaking with the Austin American-Statesman, Michael Giusti, an insurance expert, explained policies only cover forced cancellations. It would be unlikely SXSW recoups the costs of theirs in the event they choose to cancel over coronavirus scares. It would require health officials’ enforcement.
And Austin’s health officials state a cancellation isn’t necessary.
The city itself also faces little consequence in the event of a cancellation. While the festival means a lot to the hospitality industry, the overall economy share of the event accounts for about 0.25% of Austin’s annual $150 billion.
That leaves SXSW on its own. Cancelling comes with a financial hit. Proceeding damages their brand. If people attend and leave infected, the company takes a serious hit. Public relations experts expect such a move to potentially damage the festival far more than one year’s cancellation.
As its beginning draws near, SXSW grapples with a difficult decision, which it has just 7 days to make.