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Iggy Pop of Iggy and the Stooges performed during the 2010 NXNE festival in Dundas Square in Toronto.

Adrien Veczan/THE CANADIAN PRESS

You don't have to squint to see that Toronto's North By Northeast (NXNE) festival would love to emulate its older and much larger sibling, Austin's South By Southwest (SXSW). But the road to world-class-festival status is still choked with obstructions.

Local governments looking to lure creative industries such as technology have long chalked Austin's ability to attract employers such as Dell, Apple and Google up to its reputation as a fun place to live, particularly as a result of its vibrant live music scene (though SXSW's umbrella includes not just music, but also film and technology, or "interactive").

More recently, however, they've become attuned to the revenue potential of live music itself; a study pegged the impact of last year's SXSW on Austin's economy at $315-million (U.S.).

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"What everyone's getting," says Now Magazine publisher Michael Hollett, one of NXNE's directors, "is that not only is music essential for the soul and the imagination, spiritual aspiration of a city, it makes cities money. Like, tons of it."

Although smaller than its U.S. counterpart, NXNE has swelled in both footprint and profile over the past decade in tandem with the independent artists and labels it caters to. And the money isn't just coming from ticket sales; it also includes corporate sponsorship, a growing part of the overall revenue.

"[Sponsorship] has grown every year," says NXNE creative director Crispin Giles. "It's huge. It's become a big part of what we do, which is great, because it gives us the ability to live larger."

Along with big companies such as Samsung (sponsor of NXNE's Festival Hub), governments are also getting on board. Not only does NXNE receive funding from all three levels of government, but last year, the City of Toronto created a position for a music sector development officer and is liaising directly with the industry to encourage its growth.

Already, there are signs of improvement – literally. On June 8, the city issued a memo stating that music venues would no longer be ticketed for posters advertising their shows. The tickets were an irritant for venues, who often felt the sting of fines even though, in most cases where posters appeared in violation of existing rules, it was the performers who were posting them.

Zaib Shaikh, Toronto's film commissioner and director of entertainment industries, says that, although his department is not principally in charge of the bylaw, "our team and our music sector development officer, Mike Tanner, worked with the Toronto Music Advisory Council, in relating to the [Municipal Licensing and Standards department] that the postering bylaw could, in some cases, negatively impede the music industry or challenge it in a way that doesn't help it grow … MLS and the city are looking at how we can not do that."

Shaikh stresses that his department's role is to foster communication between the industry and the city, not to intervene directly in disputes between, for example, venue owners and residents complaining about loud music.

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One area where observers were amazed at the lack of intervention, though, was in the dispute over hip-hop artist Action Bronson's planned appearance at a free outdoor concert at the fest. After a petition circulated calling for NXNE to cancel his booking on account of what opponents characterized as misogynist lyrics and music videos, the festival offered to move Bronson to a non-outdoor venue. (He appears to have declined and is not slated to perform.) History tells us politicians rarely miss the opportunity to threaten to pull government funding when faced with such protests, but according to Hollett, neither the city nor the province pressured NXNE's decision.

Toronto may be making the right noises, but balancing various citizens' interests is harder than it looks. For every bylaw whose impact is mitigated, there are plenty more that make other cities look downright debauched by comparison. Ontario's puritanical approach to alcohol at special events - it's hard to imagine local regulators sanctioning something like the Montreal Jazz Festival where patrons can bring drinks from stage to stage within a wide area - and draconian venue capacity limits annoy Hollett to no end."It's almost like the old days – sort of, Victorian Toronto, like, closed on Sundays kind of vibe, and that crazy rock 'n' roll," he says.

And municipal licensing issues around whether a venue is a restaurant with a bar attached, or an entertainment venue, remain thorny. A 2012 report by lobby group Music Canada cited examples of live music venues being fined for not having entertainment venue licences, typically issued to – and some would argue, used to crack down on – nightclubs with DJs rather than bands. It's a distinction that leaves ample room for interpretation by officials who have at times appeared far more sympathetic to condo owners than club owners.

"It's one thing for the city to have an expressed desire to support moving forward and becoming more of a music city," Hollett says, "and then there's the reality of actually translating that to all levels of the organization."

But he remains optimistic about the dialogue NXNE, and Toronto, have helped create between politicians and musicians.

"I think the main thing Toronto can learn from Austin is that Austin actively engages with its music industry," Shaikh says. "It's not like the city wants to hinder music."

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