Will CES 2009 Weather the Economic Storm?

ceslogoTechnology’s biggest consumer technology show, CES, will kick off in a few days, and it will be worth watching — not just to see what products and services are unveiled, but to see how the show itself is adjusting to the turmoil in the economy. For even before the financial meltdown kicked into high gear in September, the overall technology market was straining under high levels of consumer debt and falling home values. Since then, the severe drop in consumer spending has sent shockwaves through the consumer electronics industry. While not everyone is laying off staff, everyone is cutting back on expenses, especially in travel and marketing, so many who have registered for CES likely won’t attend. And while most who were planning on exhibiting had to pay for the booth space well in advance, some have decided to walk away entirely. (This may look like a waste of money, but in fact much of the expense of trade shows comes after the registration fee, via the booth set-up, manpower and other costs, such as catering and telecommunications.)

The pullback is reminiscent of the dot-com crash, which saw everything from the gargantuan Comdex to smaller shows like DSLcon disappear. As Om pointed out a few weeks back in relation to the news that the fabled Macworld was coming to an end, in many ways “trade shows are a relic of the past, like pinups from the 1940s.”

But that doesn’t mean additional CES shows will be canceled. I think they will be with us for at least a few more years, just in a dramatically different form. The show had become too big long before the downturn, going from a place to launch the latest TV set models to one that features content owners, service providers, silicon, PC and software companies, all shouting to be heard. Exhibitors have been complaining for years about how much it costs and how all the noise makes it tough to stand out.

What would I like to see at a smaller CES? First, make it more conducive to meetings. Today’s show is too distributed around Vegas, which means getting from one meeting to another one time is almost impossible. Second, exhibits should be about consumer electronics. If you don’t have much to exhibit but really want to be at CES to talk to the industry players, invest in a meeting suite instead. Many of the smart companies have realized that journalists, bloggers and industry partners would rather just sit down in a suite for a briefing, and the CFO probably wouldn’t mind saving the money.

Lastly, while the show could benefit overall from being smaller and more focused, I think its online presence should grow. The YouTube CES channel has poorly produced videos with poor audio. The CEA should grow its own coverage and encourage coverage by knowledgeable industry watchers. And it should put all the insider tracks and sessions on the web (heck, sell advertising if you have to), and allow vendors to have their own channel. Centralize it in one place.

CES this year will offer a window to not only the future of consumer electronics, but the future of consumer electronics trade shows. Imagine being able to avoid the stale cigarette smoke of Vegas in January altogether. Unless, of course, you like that kind of thing.

Michael Wolf is an analyst with research firm, ABI Research.