Economic uncertainty has exhibitors drafting new game plans

From ACI to Zoom Telephonics, the number of vendors, programmers, operators, software and hardware companies attending this year's Western Cable Show in Anaheim Nov. 27-30 is down, but not necessarily out.

The recent economic malaise, coupled with the terrorist attacks on the World Trade Center and the Pentagon, have prompted many cable-related companies to re-evaluate trade show exhibit strategies, most notably their participation in the Western Show, with many opting to either cut back their activities or bail out altogether.

Many are trimming the number of attendees they'll send to save travel costs, while citing security reasons for not attending, preferring to use the Show for quality face time with clients, scheduled meetings, suite visits and customer entertainment.

"We've discussed the Show with many MSOs, and they told us they were lightening up their participation at the Western Show," says Bob McKenzie, senior vice president of strategic marketing for DST Innovis, a long-time exhibitor at the Western Show. "We want to be available for our clients, but many won't be there. We're just not convinced they're going to the Show with purchases in mind, so we won't have a booth." The company will use the Western Show for scheduled meetings with customers, but "away from the planned activities, so we don't interfere with CCTA's events," he adds.

DST Innovis joins a mushrooming group of vendors, operators and programmers who will enter the non-exhibiting ranks for this year's Western Show, which currently has a growing list of 336 exhibitors, including CableNet exhibitors. The number of exhibitors is down from 473 at last year's Show, including CableNet participants.

Conspicuously absent from this year's exhibit floor are programmers such as A&E, Discovery, Home Shopping, HBO, Showtime, Turner, Fox and USA. More than 30 other networks and programming services are not planning to exhibit. AT&T Broadband recently announced its executives wouldn't be attending the Show either, while other key MSOs are planning only limited participation.

On the vendor side, the exhibitor shrinkage isn't as dramatic, however. DST Innovis, Intel, Lucent, Sony, Zenith and 3Com are some of the major players who, for a variety of reasons–from economics to scaling back their cable industry involvement–are choosing not to exhibit. Yet overall, with the addition of nearly 100 new exhibiting companies, the decline in vendor exhibits has been tempered somewhat.

"This is a very dynamic marketplace, with 25 percent of the booths coming and going. We're seeing lots of new companies coming in that have worked with CableLabs and want to be players in the broadband market. But, we recognize times are tough, and we've had to really scramble to keep many of the folks," says C.J. Hirschfield, vice president of industry affairs for the California Cable Television Association (CCTA).

An increasingly common trend has some folks simply restructuring their focus away from the cable business in light of the economic downturn, which eliminates the need to exhibit this year.

"We sold our set-top box business to Motorola, so we aren't involved in cable's day-to-day business. But we still have a strong interest in HDTV and cable," says John Taylor, a spokesman for Zenith.

Lucent Technologies, whose stock has plummeted over the past year, won't be exhibiting at the show either. "We took a hard look at exhibits and trade shows and drew back from a number of cable shows. We're still committed to cable, but people (stockholders) want recovery from us," says Dick Muldoon, a company spokesman.

Recovering from a slumping economy and the recent terrorist attacks are two of the more obvious reasons companies give for not exhibiting at this year's Western Show. Yet another compelling reason is the ongoing consolidation of cable systems and the high penetration of networks, which means companies really only have to deal with a handful of multiple system operators (MSOs) in order to reach 90 percent of the cable universe. So, when times are tough, there's a reduced need for expensive exhibits, some of which can cost as much as $750,000–replete with glitzy parties and swollen travel budgets.

"Last year, we saw the handwriting on the wall, when some programmers who traditionally exhibited at the show didn't exhibit, and several have dropped out. But with the consolidation of so many cable systems, the industry is really changing," Hirschfield says.

Consequently, CCTA was forced to alter certain policies and invoke a $14,000 non-exhibitor fee for those companies interested in hosting a suite and participating in the show's scheduled events. "We wanted to provide a non-exhibitor participation badge which allows access to nearby suites, parties and blocks of rooms. We just can't allow a show-related party at the Hilton if a company isn't part of the show," Hirschfield maintains.

Some companies are getting around that fee by purchasing the smallest booths available–for $1,800–and dressing them up at minimal cost, which gives them access to close-in hotel rooms and suites while remaining part of the show's official event schedule. Says one frugal exhibitor who declined to be identified: "We were a little concerned about being held hostage by the $14,000 fee. So, we'll spend about $4,000 on graphics and save about $8,000."

Those concerns were quickly identified by CCTA. Answers Hirschfield: "Our strategy was to discuss alternatives with exhibitors. We understand their pain with layoffs, etc. We listened and felt a non-exhibitor fee was a good compromise, and with a smaller booth, companies can save money and participate in all the activities, except select functions such as the Chairman's Reception."

Despite those modifications, many companies are passing on the Western Show altogether. "We had planned to attend, but won't now. The economy just put us over the edge, and the Western Show usually has lots of programmers, but we're in the power supply business and not just in cable anymore," explains Paul Simcock, marketing communications specialist for Invensys Energy Systems, a producer of backup power systems.

Invensys' rationale for not exhibiting at the Western Show mirrors the changes occurring at many cable-related companies in their attitudes toward trade shows. "We took a hard look at the qualified leads from the show and decided they just weren't there. We're taking the $50,000 we spend for a trade show and putting it into lead generation programs to identify target markets. With all the mergers, consolidations and acquisitions, we're now involved in the telecommunications business, too," Simcock says.

Ditto Electroline. "Many of our major customers told us they'd be going to the show for only one day and with few people, while other key customers won't be there at all, so we had to re-evaluate our participation. We chose a more direct, grass roots approach to reach our customers, so we won't exhibit at the show. We will host a suite, however," says Joanne Fortin, director of corporate communications and business development for Electroline Equipment Inc., a manufacturer of addressable control systems, amplifiers and other cable-related products.

Consolidation through acquisitions, mergers and the continued blurring of the lines between cable and telecommunications are forcing a growing number of companies to redefine their trade show exhibit purpose, leading some to a more direct, face-to-face strategy with their customers.

"We meet with MSOs regularly and want to get right into their businesses. We want to bring the show to our clients and right to their operations and get with their people on-site, one-on-one. Consolidation has allowed us to do that because there are fewer, more important clients, so we can focus on their specific needs," McKenzie maintains.

Yet even with a growing number of defections, many companies plan to exhibit at the Western Show, especially vendors who feel their presence at the show is mandatory.

"The majority of defections are on the programming and software side, and many companies are battling a lot of year-end distractions. But this is a popular event for suppliers like us to launch the new year with new products and services," says David Eng, corporate vice president of Americas business for C-COR.net.

With the company's acquisition of Worldbridge and MobileForce, exhibiting at the Western Show was a no-brainer, Eng insists. "We've made eight acquisitions since 1999, so there's a legitimate reason to exhibit and show our recent acquisitions. We're not expecting huge crowds, but the quality is very good. We've not heard of any key customers who aren't going."

CSG, a supplier of customer care, management and billing solutions, echoes that strategy and will exhibit at the show, albeit with a close eye on the budget. "It's a very important venue for us to show updates of our customer care service support system to our core customers, and our demonstrations are good value adds. We'll have fewer people, however, so we'll look at making the best use of time and people to maximize our investment," says Karen Eckmann, executive director of corporate communications for CSG Inc.

Partnering among exhibitors is becoming more popular as well. More companies are now sharing booths for demonstrations, which have led some to move up to their own exhibit space.

"Last year was our first year at the show, and we were a partner in some booths. This year we'll have a full booth," says Suzanne Tieszen, public relations manager for BroadJump, a network integration provider. BroadJump will use its booth to demonstrate its automated offerings and fulfillment services, an opportunity Tieszen insists is important for the company.

Demonstrating products is a key upside to exhibiting, companies say, especially for many newer companies, whose mandate is to walk a customer through an intricate series of commands and screens. "It's the most effective way of getting clients excited about the product. We're a software provisioning solution, and that's pretty esoteric, so customers have to see it," says Michael Foley, president and CEO of Alopa Networks Inc., a software provisioning company.

The seeing-is-believing concept is not lost on other similar companies whose products necessitate some serious walk-throughs. "It's a premier show for the industry and for us. We'll demonstrate new products like our TJ615 modems with a home-grown chip and design. We've been committed to the show from the get-go," says a spokesperson from Terayon Communication Systems.

Concurrent Computer Corp. will do the same with its SVOD and VOD products. "We'll demo our SVOD products with other vendors in the booth and make some announcements. We're a technology vendor, and we need to be there," says Andrea Ariza, director of corporate communications for Concurrent.

The CCTA certainly hopes more companies share the "have to be there" attitude, particularly during the current economic downturn and in the wake of recent tragic events. "For us, it's an opportunity to bring together opinion leaders in the broadband industry, and we've urged MSOs to schedule meetings at the show and have worked hard to bring security up to snuff. But it's been a challenging year with difficult decisions," concludes Hirschfield.