Back in the day, the E3 video game trade show got too big for its britches and, as a result, too expensive for publishers. Activision announced it would bow out, EA reportedly felt the same way, and the Entertainment Software Association radically changed the E3 format. The changes lasted a few years, but eventually E3 returned to its mega-party glory at the LA Convention Center, and it doesn’t seem to be looking back any time soon. So does hearing that Vizio opts out of CES mean North America’s largest consumer-electronics trade show is in trouble?
In a word: Hardly.
Hearing that Vizio has chosen to skip CES moving forward is certainly a surprise. Vizio is one of the most recognizable TV brands in America, and it’s venturing into new realms including wireless audio, wireless video, tablets and computers. Naturally one would think Vizio would want to promote these new products on North America’s biggest CE stage.
Yet as the company invested in this diversification, it was bound to seek areas to trim expenses. Vizio hadn’t hosted a booth at CES proper for years now; it opted instead for off-site suite events. Those events still took up lots of space, though, and they surely required significant investment.
In stating that Vizio opts out of CES, the company stated “Focused on closer alignment with retail partners, adjusting to ever-changing customer dynamics and making announcements when it’s right for the brand, VIZIO will be looking towards new ways to showcase its innovative products and technologies moving forward. After a number of successful showcases during CES, VIZIO is preparing for the next stage of brand development, bringing its showcase to more intimate venues for its partners, customers and press.”
Translation: “anything near CES is crazy expensive and getting worse, our margins are already slim, and we’ve got to be more efficient at closing business deals and generating positive buzz.”
Surely other manufacturers feel the same way. Perhaps it’s their larger margins that are keeping them in the CES game. But the issue isn’t one of “struggling manufacturer.” Instead, it’s an issue of changing business models.
Gone are the days of “fax me your order.” Gone are the days of “can I take a handout back to my buyer?” With so much more attention on digital collateral, peer reviews, word of mouth, margins and logistics, companies can arguably get just as much business done via smaller events like those Vizio is proposing as at larger events that carry a hefty premium.
Bringing it back to video games for a moment, look at the rollouts of the PS4 and Xbox One last year. In the previous generation, we and thousands of other small- to mid-tier publishers received debug units, free hardware and a vast amount of one-to-one attention from the PR departments. This time around: we never even got a single response to emails to six different Sony reps, and they still aren’t talking. Microsoft has been quite accommodating with review software, but the hardware was non-existent.
That’s all fine and dandy — though I still find Sony a tad disrespectful. The point of all that is to show how business and PR/marketing are changing. Publishers, manufacturers and others don’t “need” media and blogs in the same ways they used to. They have their own “publishing” vehicles and blogs, they have their own private events, they have their own conduits to consumers and brand advocates.
Big shows like CES (and for a few years, E3) may not mean quite as much in terms of pure business productivity. Hosting one-off events with targeted crowds gives them the chance to control the message, have specific conversations with decision-makers and influencers, and on the whole spend much less money than they would on a large trade show.
So no, hearing that Vizio opts out of CES isn’t a death knell for CES. Hearing they won’t attend CES 2014 doesn’t spell doom for the event. Heck, the company held events off the main CES show floor for years, so Vizio’s decision may not even really register with CES execs for some time. But it’s definitely something to keep an eye on, because it may very well be a harbinger of things to come.
Vizio shook up the TV industry more than a decade ago by thinking differently. Although their anti-CES decision doesn’t doom the CE trade-show landscape today, it may be an indicator that CES may need to implement some show-format changes in the mid-term to keep other manufacturers from choosing to follow Vizio’s lead in the future.