CES 09 Overview - Part 1

Another year, another Consumer Electronics Show (CES). For my readers who are unfamiliar with the event, this is the largest gathering of manufacturers, retailers, reps, and wholesalers of consumer electronics items in the world. In past years, this annual Las Vegas-based show was a must-attend for anyone even remotely connected to the industry, but given the economy, this year the show was one of lowered expectations.

That being said, I found the show to be well worth the 3 1/2 hour drive out from LA despite the general view before the show. The following is the first of 4 reports on what I observed.

First of all for those of you who've never attended, this is a huge show just in terms of the physical space that it takes up. It encompasses the entire Las Vegas Convention Center and more, with automotive electronics in the North Hall, the large CE manufactures like Sony, Panasonic, Toshiba and Samsung in the Center Hall, personal electronics and accessories on the top floor of the South Hall and audio and home theater oriented products on the bottom floor of the South Hall. But that's not all - out in the parking lot there's a number of temporary tents for manufacturers like Gibson (wonder why they're even at this show?) and Motorolla.

But there's more -

the Sands Convention Center hosted miscellaneous electronics (more on this later), and on floors 28, 29, and 30 of the Venetian Tower is high-end audio. There's also something in the Hilton Convention Center but I 'm not sure what since I never got there this year. Yes, it's a big show indeed!

----I should have known something was up with Vegas when I noticed that about half the billboards outside of the city were blank, even the new electronic ones. Some had available signs on them; some just left vacant.

----Then the next thing that struck me as I drove near Vegas was the smog. There's a ring around the town comprised of layers of black, brown and green. Reminds me of LA before the 90's. Of course, this can't be healthy for you, but neither is gambling or partying.

Vegas Smog

----Once I got into Vegas, I was amazed at how dead it was. It usually takes about 45 minutes to get from the Strip to the Convention Center due to the large influx of people and the resultant traffic. This year - 5 minutes. In fact, Vegas was like a ghost town. No one in the casinos, no one in the restaurants, no one on the streets. There's trouble in paradise.

----When I arrived at the parking lot next to the LVCC, it was half-empty. Last year it was full by 10AM and I had to park in a casino parking lot. Plenty of room this time. Not a good sign.

----The show attendance was down as well - a lot from what I could tell. I estimate about 25%. It was actually kind of nice. Not a lot of people and no pushing and shoving. In fact, by 5PM the LVCC started to feel like 5PM on the last day of the show instead of the first. It was a ghost town. I felt sorry for the vendors. It was also really easy to leave town at 6PM. Just normal traffic to deal with.

The Show Floor At 5PM

----The South Hall took the biggest hit in terms of open booths. There were a lot of booths that were obviously sold but the manufacturers just decided not to show. There was a lot of empty floor space in general.

----That didn't apply to the high-end audio exhibits in the Venetian, which were actually pretty busy. Go figure. I liked it over there. It felt like an old fashioned hi-fi show from the 70's.

Some general show observations:

• The last couple of years the focus was on wireless. Everywhere you looked, you saw wireless technology touted as the main feature by just about every manufacturer. This year the theme was "connected". All personal electronics used the fact that they were connected to the internet as their most prominent feature. Most TV's, toasters, clock radios, underwear (kidding), you name it; connected to the internet.

• A couple of mini-trends. soundwear - clothing that has earbuds built-in as an integral part of the garment. Electronic health and fitness - CO2 monitors built into cameras and watches, electronic pill minders, personal blood pressure indicators, etc. For some reason, more manufacturers offered massage chairs than I thought would be at a show like this.

• And speaking as a person who's spent a good deal of my life as a pro musician, the most disturbing of all - just about every booth had Rock Band or Guitar Hero games playing, many to show off the built-in gaming capabilities of new television products, some just to attract a crowd. I guess it's fun, but if kids spent as much time learning to play an instrument for real as they do playing these video games, we'd have some great up and coming players.

A Rock Band Contest
To disgusted to note the booth

A Breath Of Fresh Air.
A real player versus a gamer. The real guy kicked his ass!

• The vibe of the show was pretty doom and gloom. As my friend Marty observed, "This show has no energy!" Most people were there because they had to, not because they wanted to (except for me, of course).

Lots more to talk about the show. Next post will be about the latest in televisions.

Loudness Wars - The Movie

We've posted a few times about the so called "volume wars," where in order to extract every last bit of level from a track, it's compressed to the point where it loses all of its punch.  Now there's an excellent video from Matt Mayfield that illustrates this point perfectly.

 

Excellent job, Matt!!

The New iTunes

In an effort to stay ahead of the market and respond to what the critics say are shortcomings, Apple has made some significant changes to it's market-leading iTunes music site.  Here are the upgrades along with some comments:

• 3 pricing tiers - $.69, $.99 and $1.29.  Sounds good on the surface but the last thing the music industry needs to do is increase the price of any music with the economy in the shape it's in (Been to a mall lately?)  In theory the $.69 price point is attractive, but just how many of the songs that you really want do you think will be priced at this point? And how many of the hits do you think will be priced at $1.29 (how about all of them). Will be good for new artists though.

• Most albums still priced at $9.99.  Just image how much more music would be sold if the price for catalog (older albums) was $6.99?  That's the kind of initiative the music industry should be taking to increase sales (they do it already on CDs).

• DRM free.  DRM stands for digital rights management, which is built-in restrictions on illegal copying.  Another item that sounds good, but the only people who really ever seemed to care about DRM were the people that were going to steal it anyway.  Nice gesture but ultimately irrelevant. 

• Wireless downloads to the iPhone.  Now this is something to get mildly excited about. Until now you had to buy the song via iTunes on your computer, then transfer it later to your iPhone. This feature eliminates an unnecessary step.

• iTunes Plus.  Also looks like it might be a cool addition, but at a price. Not only do you get better audio quality thanks to the 256kbs encodes, but it will play on as many computers as you want, instead of the 5 that you're now limited to. The price is an extra 30 cents a song or 30% of the album cost. Worth it? To many consumers, probably not. To Apple? Let's see: 6 billion downloads x .30 = $1.8 billion!

So despite what it may look like on the surface, this announcement is anything but groundbreaking. Interesting, yes, but don't look for the future of digital music downloads to change a lot as a result. For more details, check out the Apple press release here.

9 All-Time Bad Tech Predictions

The prediction business is always like walking a tightrope over a waterfall. You're a lot more likely to fall off than make it to the other side. Here are a few of the most egregious forward-looking flubs of the past 109 years, courtesy of Info World:

• "Everything that can be invented, has been invented." - Charles Duell, Commissioner of the US Patent Office, 1899

• "I think there is a world market for maybe five computers." - Thomas Watson, president of IBM, 1943

• "Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night." - Darryl Zanuck, executive at 20th Century Fox, 1946

• "Nuclear-powered vacuum cleaners will probably be a reality within ten years." - Alex Lewyt, president of Lewyt vacuum company, 1955

• "There is no reason anyone would want a computer in their home." - Ken Olsen, founder of Digital Equipment Corporation, 1977

• "Almost all of the many predictions now being made about 1996 hinge on the Internet's continuing exponential growth. But I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse." - Robert Metcalfe, founder of 3Com, 1995

• "Apple is already dead." - Nathan Myhrvold, former Microsoft CTO, 1997

• "Two years from now, spam will be solved." - Bill Gates, founder of Microsoft, 2004

• "The Macintosh uses an experimental pointing device called a mouse. There is no evidence that people want to use these things." - John Dvorak, noted tech writer and columnist, February 1984.

After the upcoming CES, NAMM and NAPTE conferences this month, I'll provide some trends and music and technology predictions for 2009.  Stay tuned!

Games As A Music Revenue Source

Games like Guitar Hero and Rock Band have been a big help to the bottom line of record labels and games alike. Through November, about 22 million units of Guitar Hero have been sold since its introduction in 2005, with another 5 million units of Rock Band since it came on the market in 2007.

While the major labels complain that the licensing fee is only a fraction of what it should be, artists are making out just fine since they also control (and therefore license to the game maker) their image and likeness. In fact, it's been reported that Aerosmith made more money from the June release of Guitar Hero: Aerosmith than either of its last 2 albums.

At first glance this seems like the future of the music business. After all, everyone wants another revenue stream to replace what's being lost from the decline of the CD. The problem is that the only ones who benefit are the ones who need it the least - the legacy artists like Aerosmith.

If the music industry is to survive, it needs ways to promote new artists and new music. It needs a musical "farm team" where the artists learn their craft then make it their art (remember - "art is something you do for yourself: a craft is what you do for everyone else"). And it really needs new revenue streams to sustain these artists on at least a subsistence level until they graduate from to the big time. Unfortunately games aren't the answer.