SXSW Interactive is all about digital media trends, and SXSW Music is all about the music business. I quickly realized this on Wednesday, the first day of panels at the SXSW Music Festival after 5 days of being at the Interactive festival.  About 15,000 people attended the 2010 Interactive portion, and 13,000 music industry professionals were registered for the music portion of SXSW.

Yet there’s a lot of overlap between these two portions of SXSW, and on the last day of Interactive, music was a focus.

I attended a panel about music licensing for technology services -- e.g. how does a social music service or site legally get access to a catalog of music. The panel was titled Music Licensing for Emerging Media: Apps, Widgets, Viral Videos.

A panelist exclaimed that music search is getting so good that soon any song can be found and then available for license for any music service. Not everyone agrees.

The big buzz the last day of the Interactive conference was a keynote from streaming music service Spotify, which isn’t available here in the U.S. I admit that I’ve tested Spotify and that it’s a nice service to stream music. I didn’t learn anything new here on the panel, you can read more about it on Billboard.biz or Paidcontent.org.

Still, I did notice that as Spotify CEO Daniel Ek demonstrated the streaming service, he got lots of applauds and oohs and ahhs from the audience.

Even with the hype around Spotify’s potential arrival in the US, did you know that in the US, according to eMarketer, 27% of music listeners do not have a preferred place to listen to music online?  And in the UK, a new study says 40% of music fans can’t name a legal music service. I believe these numbers reflect consumer behaviors -- music fans are likely going online not to find a particular streaming music service, but to interact with their favorite bands on artist websites.

The artist site as the center of the fan experience was a big part of the discussion of a panel I participated on at SXSW Music. The title of the panel was “Social Networks and Musicians” and it featured esteemed speakers who work at the intersection of music and technology. Brian Zisk from the San Francisco Music Tech summit moderated the panel and asked the audience, partially made up of independent musicians, which social networks they spend their time on to promote themselves and distribute their content. A long list of social networks was thrown out by Zisk and the audience kept raising their hands when he asked if the musicians used them.

In the audience, you could hear that there was a pain point for some of these musicians. Some in the audience said they feel like they are always chasing the next new big social network. I argued that these social networks offer points of access to large music audiences, and that musicians and artist managers should search them for potential fan acquisition. For instance, a musician or band manager could search Twitter (http://search.twitter.com) to find fans of their band or fans of related artists, and then drive them back to their own web site. Dave Allen, a founder of the post punk band Gang of Four, now runs his own brand and digital strategy agency in Portland called Fight. Allen drove home this point to musicians attending -- make sure you have your own artist web site because of the sometimes shifting seas of social networks. So while it’s critical to peruse the social networks for the audience and activity related to music, it’s important for artists to have their own digital home.

Ethan Kaplan, Senior VP of Emerging Technology at WEA (Warner Music Group), says the biggest motivator for Warner Music to make the artist sites the hub of fan activity, is to capture important data about the fans.

On the panel, we talked about email marketing as still being key to the direct to fan conversation. Dave Allen urged musicians attending to make sure they have plenty of personal content in their emails instead of just sending out tour dates. I talked about the artist site as likely the one place where fans feel comfortable actually submitting their email address for newsletter sign up citing how the Cisco Eos powered web site for Atlantic recording artist Paramore captured 30,000 fan email addresses in just about 9 weeks time.

We also discussed how social networks are revitalizing the careers of artists from the past. In fact just the other day at an Interactive panel led by the Warner Bros artist Devo, I was surprised by the news that Cisco Eos will power a new interactive experience for the band. Ethan Kaplan discusses the phenomenon in more detail:

At some point late Wednesday at SXSW Music, it became harder to pay attention to the amazing SXSW Music Industry panels. When you have over 2000 acts playing from nearly 40 countries – your mind tend to wanders towards catching music performances.

Thursday through Saturday, Cisco Eos sponsored the SPIN Loft Series, a series of acoustic performances from artists like Metric and Soft Pack and others.

So I had plenty of chances to see performances as we staffed the event to evangelize Cisco Eos to music industry professionals. You noticed even the interactive portion of the SXSW Festival had major music acts – for instance a party put on by the online event service Plancast and tech focused PR firm The Mix Agency had world class DJ / producers Classixx perform.

According to Billboard.com, over 100,000 people came into Austin for the week, pumping maybe about $100 million into the Texas economy. That’s quite a bit of music business!

At SXSW Music, when you aren’t catching live music or DJs, you are networking with some of the music industry’s leading thinkers and learning about new digital music experiences. Jeff Marois, VP of Business Development at MXP4, showed me a Flash widget that allows fans to remix songs, like this Britney Spears track. When you put an interactive widget like this on a band site, you can expect time spent will increase.

Martin Thornkvist, a digital music strategist from Sweden sat down with me and shared some his band marketing secrets. For instance for a band he manages, Motoboy, he makes a unique URL for each of the band’s songs, so the songs are easier to find through web search. For instance, here is a web page for a particular song on the Motoboy album.

A theme throughout SXSW Music that kept coming up is that music collectors still want physical products that expand the fan experience. The band Motoboy that Martin Thornkvist manages actually made a little music box for one of their songs! See it in action here:

And Dave Allen, one of my fellow SXSW Music panelists, blogged about a unique release format the label Stones Throw utilized for the physical release of a new album. Meanwhile, I wandered over to the Flatstock poster show, part of the SXSW Music Festival. There were so many concert posters to snap up! It’s not all digital music product after all. For instance check out all the concert posters in this booth by LA LA Land Posters and artist Kii Arens.

If I documented every single conversation I had about digital media and the music business during 2010 SXSW Interactive and SXSW Music, I would need to blog from now until the end of the year. I would say it’s the premier conference to get networking done in digital media and the music business. Look at all the business cards I collected!

In trying to do a final review of SXSW lessons learned, one of the amazing things I discovered was all of the great coverage by media companies – whether it was our partner for SXSW, SPIN Magazine, the Philadelphia Inquirer’s great blog coverage here, or Billboard’s business bent on the festival. So much text, photo, and video content generated by coverage of SXSW, I wonder if you could measure that too -- how many hundred of thousand photos and video clips are generated by SXSW attendees?

The last night at SXSW before returning to the desk here at Cisco, I talked to David Suddens, the CEO of the famous shoe brand Dr. Martens. I blogged earlier about how branded entertainment was a big topic of conversation at SXSW Interactive. Suddens revealed to me that music content is a big way that his brand connects with consumers, and that on April 1^st, his company will be launching a music series on the web to commerate the 50th anniversary of the Dr Martens brand.

After having a great dinner conversation with Suddens, I went to the Austin Music Hall and saw Smokey Robinson perform which was certainly the SXSW highlight for me. Mr. Robinson earlier in the week, gave some tips to musicians in this SXSW keynote:

Ok so I did promise the Cisco Eos team I would use location services like Foursquare at SXSW. I did, and this was the end result as I departed Austin for San Francisco.

You survived this SXSW blog post as well! Please leave any comments you have or questions below.