Critic: Comdex gone for good

Thursday, June 24, 2004 | 11:04 a.m.

Convention industry observers are split over whether Comdex, the giant computer trade show that has brought hundreds of thousands of conventioneers to Las Vegas in the 23 years it has been conducted, will ever return after canceling its November show.

The trade show's organizers, in a surprise announcement Wednesday, called the move a postponement, but they said the show wouldn't return to the city until November 2005.

At least one critic of the show says he doesn't think the show will be back.

San Francisco-based MediaLive International Inc., a company formed a year ago in the wake of former owner Key3Media Group's emergence from Chapter 11 bankruptcy protection, announced the cancellation of the event in a news release issued Wednesday morning.

MediaLive managers said the company has established an advisory board of technology industry leaders to determine how the show can better meet the needs of the industry.

"While we could still run a profitable Comdex this year, it does not benefit the industry to do so without broader support of the leading technology companies," said Robert Priest-Heck, president and chief executive of MediaLive, in the statement issued Wednesday.

Technology industry insiders say a combination of factors resulted in Comdex's failure to sustain itself, including poor management by the show's operators.

Several experts say while factors like the downturn in the tech industry and economic damage of the Sept. 11 terrorist attacks contributed to the show's downfall, operators of the event failed to react to the rapidly changing needs of industry vendors.

Fewer people came to shows after 2000 because companies were downsizing or closing and others were reducing their expenses and travel budgets because of the recession and then the terrorism.

Meanwhile, smaller shows, like Networld + Interop, which also is operated by MediaLive, have a narrower focus and continue to thrive. Other tech shows have found specific niches to exploit. But Comdex, critics said, tried to be all things to all groups and the show ended up drawing a crowd of lookers that was drawn to Comdex's supermarket approach of gadgetry -- but didn't attract many buyers.

Experts say the highly successful Consumer Electronics Show, which draws more than 125,000 people to Las Vegas every January, is a different type of show because attendees are retailers looking for items to sell and not technology industry professionals.

Comdex, a fixture in Las Vegas since it first opened in 1979, last year generated an estimated $69.5 million in nongaming revenue for the city.

The show's expansion and contraction has mirrored that of the technology industry. In the 1990s, the event grew to become Las Vegas' largest convention. In 1997, the event drew more than 225,000 people to the city and the trade show floor covered a record 1.475 million square feet at the Las Vegas Convention Center, the Sands Expo Center and in tents erected in their respective parking lots.

Attendance projections plummeted and the Comdex shows of 2001 and 2002 drew fewer people than expected. Attendance estimates ranged from 100,000 to 125,000 in 2001 and 75,000 to 100,000 in 2002. The poor showing contributed to Key3Media's filing for bankruptcy protection in February 2002.

Although the company emerged from bankruptcy four months later, the 2003 show attendance was even worse than the year before. Attendance was estimated at between 40,000 and 50,000 people. But organizers said there were more quality buyers than "tire-kickers" attending the show.

MediaLive's contract gives the president of the LVCVA the ability to negotiate new terms to the lease agreement if the company intends to return to the convention center.

The LVCVA is eight days away from the transition of its presidency from Manny Cortez, who is retiring after 13 years as the organization's top executive, to Rossi Ralenkotter, a longtime vice president. Cortez said Wednesday that he was surprised by MediaLives announcement.

"It puts a big hole in our building and a big hole in our town," Cortez said.

He said while the LVCVA wouldn't lose much lease revenue because of the penalty clauses in place on the Comdex contract, other revenue streams would be affected. Those include hundreds of thousands of dollars in catering, food and beverage and communications equipment contracts and parking fees.

Cortez said the LVCVA staff would go to work trying to fill the space that would open up from Nov. 14-19. But that won't be easy.

Nancy Murphy, director of sales for the LVCVA, said putting another show in Comdex's place "would be impossible." The reason: Most major shows book space at least two or three years before the convention date.

Michael Hughes, associate publisher and director of research services for Tradeshow Week magazine, a trade publication that covers the meetings and conventions industry, said Jupitermedia Inc., which has developed a variety of technology trade shows, and Sheldon Adelson, credited with developing Comdex in 1979, contemplated or opened competing trade shows when Key3Media went bankrupt.

Adelson, who owns the company that operates the Sands Expo Center, waited to see what happened to Key3Media, while Jupitermedia debuted cdXpo at the Mandalay Bay Convention Center on the same dates as Comdex 2003. The cdXpo show was an attendance flop, but Chief Executive Alan Meckler insists the show's content was successful.

Meckler said part of his problem resulted from a contractual dispute with Mandalay Resort Group, which he accused of offering cut-rate rooms to the public after Jupitermedia locked in higher rates for conventioneers. After months of seeking a settlement with Mandalay, Meckler said Wednesday he's going to sue Mandalay in a few days.

Hughes said other companies are capable of developing major tech shows, including the Hanover, Germany-based Center for Business and Information Technology, which produces CeBIT, the largest trade show in the world.

Bill Sell, vice president of brand and customer development for CeBIT-America and the author of CeBIT's strategy in the United States, said the company has looked at staging a technology show in Las Vegas, but it decided against it because most of the information technology professionals are based in business centers such as New York.

"It made more sense to us to bring the show to where the buyers are so that they could spend six hours looking at things rather than fly across the country to a destination and spend several days there," Sell said. "Most of these IT departments have shaved their budgets and aren't doing as much traveling."

Sell said the trend in technology shows is to have smaller, more focused events. Even the monstrous CeBIT show in Germany is broken into segments set up in 27 different convention halls, he said.

He said his company's focus is on "vertical markets" in which a specific customer group -- technology professionals in the banking industry, for example -- are identified and solicited as prospective clients.

Customers are brought together for a strategy session, he said, during which technology issues are discussed. Then, they're taken to a smaller but more focused trade-show floor where hardware, software, networking and other peripherals are presented by various vendors.

A similar change in philosophy may be in store for MediaLive.

The company said it plans to have its Comdex Advisory Board meet next month to begin modifying the show product. MediaLive said it has received commitments from several tech companies, including Microsoft Corp., Dell Computer Corp. and Intel Inc. to work with the new board. Those companies are significant because Dell and Intel were Comdex exhibitors that abandoned the show in the late 1990s.

Software giant Microsoft is considered key to the success of the show. Its top executive, Bill Gates, has been a Comdex keynote speaker 20 times. But recently, Microsoft's support of the show has not been as evident.

As Comdex critic Meckler said Wednesday, "you can't have a show if you don't have Microsoft."

Meckler said he thinks Las Vegas has seen the last of Comdex, noting that no tech show that has postponed an event has ever come back. Meckler makes his views public in a weblog published on the Jupitermedia Internet site.

"Comdex died today, Meckler said in his Wednesday entry. "But it really has been dead for years."

"I have no regrets about cdXpo. We did a great job. Success was not in the cards . But we were correct in our message that Comdex was deader than a doornail."

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