FORTUNE -- Every year, the South by Southwest Interactive festival comes along, and every year, like clockwork, someone must self-righteously bemoan how the festival is so over. SXSW has jumped the shark; it's too big, too noisy, no longer relevant, the worst event in the history of humankind. It never fails, every year.
If you're a startup u should be building products, talking to users & creating -- not swinging on a ball or doing shots with Nas. #SXSW
-- jason (@Jason) March 10, 2014
Typically, these complaints are made on the very platform that's responsible for SXSW's shark-jumping -- Twitter. According to SXSWi director Hugh Forrest, the interactive portion of SXSW had only grown modestly before it became a springboard for breakout social media apps like Twitter, Foursquare, and GroupMe. After Twitter won one of the festival's big awards in 2007 (in the "blog" category no less), the app quickly became a cultural phenomenon. South by Southwest became the place to launch your social media app. Attendance for the interactive portion of SXSW exploded from 6,400 attendees in 2007 to 30,621 registrants last year. Including the music, comedy, and film festival, SXSW is responsible for bringing in $219 million to Austin's economy.
And so SXSW has grown into a massive event, and the growth was largely driven by brands and marketers. It only makes sense -- they're the ones spending millions of ad dollars on social media platforms like Twitter. Social media advertising pulled in around $7 billion in ad spend last year. Twitter itself did $665 million in revenue last year, the vast majority of that being ad sales.
In 2012, SXSW's growth hit a tipping point, and organizers realized they couldn't rely on breakout social media apps to drive interest. (That year the expected breakout, a social app called Highlight, left users disappointed.) So in 2013, SXSW shifted its focus from hyped-up social media apps and behoodied founders to science and nerd stuff, featuring keynotes about 3-D printing, space exploration, data science, and Google's "moonshots."
This year the focus moved again, to the political issues around technology. The keynote sessions featured two high-profile political exiles: WikiLeaks founder Julian Assange and NSA leaker Edward Snowden. Both interviews were done via telecast and attracted international media attention. Forrest noted that, in years past, he offered interviews to media outlets like TechCrunch about SXSW, but this year, he's been fielding requests from the likes of Fox News.
The interviews had a "scary future" takeaway. Snowden preached the gospel of encryption, especially by the big tech companies, so that the government could not spy on a massive scale with no oversight. Appealing to the festival's tech crowd, he said, "[The NSA is] setting fire to the future of the Internet," he said. "And the people in this room, you guys are the firefighters. We need you to help us fix this."
Likewise, Assange warned that Facebook steals wealth and power from the population, by "stealing information from all of us," he said. "Knowledge is power, and so they're accumulating a lot of power." Assange said Google's ownership of Android is problematic because of its information collection: "That's a big problem, that a single group is able to capture that much information (about people). You are all the product," he said.
And so, thousands of people left those keynotes thinking about protecting their rights and privacy. From there, they proceeded to their next panel, possibly one focused on how brands can better collect data for marketing. Take, for example, "Dive into Social Media Analytics," which promises advice for using social data to "power predictions on buying behaviors" and "push the boundaries of what is possible." If they like that one, there are 175 more where it came from.
And perhaps on their way they'll stop at one of many very expensive "activations" from big brands like Subway, Esurance, Oreo, and 3M (MMM). All they have to do in order to participate is hand over their email address, or follow the brand on Twitter, or Instagram a photo of their brand experience.
"Scary future" doesn't exactly jibe with social media and big brands.
Panels that tried to straddle the line between the two fell flat. One called, "Do Consumers Really Care About Online Privacy?" presented a totally unbiased (read: not really) discussion of the "media circus around privacy." There was also a panel called "Is Privacy a Right or an Illusion?" which puts forth a marketer's favorite argument in the privacy debate, that consumers are willing to give up privacy in exchange for personalization, "to earn additional rewards or to get better recommendations, like targeted ads."
It's a tricky line for SXSW to walk. I was on a panel with Josh Rubin of CNN who pointed out that, sure, his story on crazy taser drones at SXSW was funny and entertaining. But it's also important because we need to be having a conversation about these scary new technologies. "We talk about the future like it's never really going to come," he said. "This is here."
As the SXSW festival evolves, it becomes more complicated, and with complications mean contradictions, too. Thanks to its social media roots, SXSW will always be overrun with marketers. But right beside them are the privacy advocates, asking questions.
Note: This post has been updated to reflect the correct number of attendees for SXSW Interactive in 2013, which is 30,621. A prior version incorrectly used 41,700, which was the total number of attendees, including the music portion of the festival.
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