A return this week of the in-person Consumer Electronics Show (CES) will serve as litmus test for trade shows this year as they continue to navigate what may become a model for combining virtual and live events.

Plans for the annual event were moving smoothly, albeit with attendance expected to be half the 171,000 who attended in 2020, until the Covid-19 Omicron variant struck. Dozens of exhibitors dropped booth plans in late December, causing some keynotes to be cancelled. Still, the show will continue, but has been shortened one day to Jan. 5-7 in Las Vegas due to health protocols. While more than 40 exhibitors have cancelled, another 60 had signed up since Dec. 17, according to show operator Consumer Technology Association (CTA).

Fewer Exhibitors

Yet there’s no doubt CES will be a scaled-back event, with 2,200 exhibitors expected to attend, down from 4,400 in pre-pandemic years. CTA President Gary Shapiro conceded in a Christmas Day op-ed in the Las Vegas Review-Journal newspaper that there will likely be “big gaps” on the show floor. But he insisted “the show must go on” and would not lack for opportunity in the form of innovative technologies.

Those technologies coupled with brands that typically use CES to raise their profile provide an opportunity for licensing. CES has evolved from its audio/video roots to include the latest companies and trends in health and wellness, food, smart home and automotive technology, streaming services and even the current darling of the moment, NFTs. What many of these companies may have technology, they may lack in brand recognition, something licensing can supply.

NFTs On Display

For example, take NFTs. While the technology has been well established, the market soared in 2021 as brand licensing was added to the mix. It is scheduled to be featured in a digital assets exhibit and conference at the Aria Hotel & Casino as part of CES’ C-Space, which will be home to entertainment, advertising and content companies.

And NFT developer SDK Co. is expected to demonstrate NFTs developed for Authentic Brands Group, including those representing 30 brands across entertainment, sports and lifestyle. Among these will be fashion and outdoor brands as well celebrities such as Elvis Presley, Marilyn Monroe and Shaquille O’Neal. ABG last year launched Monroe and Muhammad Ali NFTs, the latter selling for $250,000. NFT hardware and software developer Atomic Form will show a 27-inch LCD monitor that connects directly to the blockchain and contains software customized NFTs for display.

For example, NFT developer SDK Co. is developing NFTs for Authentic Brands Group, including those representing 30 brands across entertainment, sports and lifestyle. Among these will be fashion and outdoor brands as well celebrities such as Elvis Presley, Marilyn Monroe and Shaquille O’Neal. ABG last year launched Monroe and Muhammad Ali NFTs, the latter selling for $250,000. NFT hardware and software developer Atomic Form will show a 27-inch LCD monitor that connects directly to the blockchain and contains software customizes NFTs for display.

And in showing the breadth of the NFT business, socialite Paris Hilton, who has invested in the technology, is scheduled to be paired with Dapper Labs CEO Roham Gharegozlou, whose company developed the NBA Top Shot digital video collectibles, for a panel discussion on Wednesday (Jan. 5).

Among other things to watch for at CES:

• While technology will be front and center, for the licensing community, the specter of reduced minimum guarantees (MGs) for 2022 looms, especially in the price-sensitive TV category, says Ciaran Coyle, President and Chief Operating Officer at LMCA, which represents the RCA, Thomson, Westinghouse, Emerson and other TV brands. With many licensees having cut sales forecasts for 2022 due to logistics issues and rising costs of shipping, components and materials, LMCA has tried to maintain royalty rates while also meeting licensees “half way” in lowering MGs, says Coyle. “Licensees are less likely to sign a new agreement when there is so much backlog of current supply and if they do sign, the guarantees are lower either because they are financially challenged or they don’t want to take that amount of risk,” says Coyle. “This is temporary, but we won’t know when we are going to come out of it. We might still get the royalty rate but the MGs are lower because the projections are lower. And within consumer electronics, you have the challenge you have  always had — the technology improves, but the [retail] prices go down.”
• The challenges haven’t lessened the appetite for licensing in TVs. Many of the one-time top  S. TV brands have shifted to licensing, including Toshiba (Hisense is the licensee), RCA (Curtis International), Hitachi (Vestel for Europe, Hisense for North America) and others. And while Samsung, LG Electronics and Sony brands currently dominate the U.S. market, Blaupunkt, a high-profile brand for car electronics in the U.S. in 1970s and 1980s, will have a booth (15916) at CES and is seeking a licensing agreement for TVs to target specialty retailers, says Andrzej Cebrat, Managing Director of GIP Development, which handles licensing for the German private equity firm Aurelius. Blaupunkt announced a licensing deal with Bella iTech for 32-85-inch LCD TVs during the virtual CES last year, but the agreement wasn’t finalized, says Cebrat. While Blaupunkt planned to have five licensees at its booth this year, the number has dropped to two: South America licensee Someco Electronics and Shagal Electronics.  The brand, which has focused exclusively on licensing since being acquired by Aurelius and emerging from bankruptcy in 2016, has garnered 46 licensees across 56 contracts including one in the U.S. for car radios with Shagal, which will add car loudspeakers to the mix in the first quarter, says Frank Goergen, International Licensing and Sales Manager at Blaupunkt. The brand also re-entered the India market last year in signing an agreement with Super Plastronics – also a licensee for Thomson and Kodak — for smart TVs. “Many companies are looking to further grow their business with licensed brands after restructuring during the pandemic” and they are starting to plan for a post-pandemic world so they can come out of it even stronger,” says Goergen.

• While Covid-19 has put a crimp in many businesses, health and wellness, already a top priority pre-pandemic, has been brought into sharper focused and is ripe for licensing for in-home test kits, air purifiers and other related products. Indeed exhibitor Abbott Laboratories is supplying attendees with free BinaxNow Covid-19 self-test kits and its CEO, Robert Ford, is scheduled deliver a keynote speech, marking the first time a healthcare company has been given the honor. As evidence of the business opportunity, Opteev will demonstrate ViraWarn, the first airborne Covid-19 detector designed both for breath analysis and room detection, while Breathings has developed a device to determine the health of a person’s lungs. Yet for licensing, venturing into health and wellness should be tempered with caution, says Coyle. “There is clearly a [licensing] market for self-care products that’s been driven by the pandemic such as in-home test kits,” says Coyle. “But the return doesn’t always justify the risk. When people complain that a device doesn’t work sometimes it’s because they don’t know how to use it. But with social media, those complaints get out there. It has to be the right fit for your brand and you need to understand the risk profile.”

• Prior to the recent spate of booth cancellations, the automotive section was tracking with more than 200 exhibitors, up 30% from 2020. But with GM, Google’s Waymo and others pulling out of in-person appearances in favor of virtual, automotive will likely see a smaller representation. Several automotive exhibitors are making a first-time appearance at CES, including TuSimple, which is showcasing a self-driving truck and VinFast, a first-time Vietnamese electric car maker.
• With some keynotes cancelled, newly-promoted Samsung Electronics CEO Jong-Hee Han’s keynote tonight (Jan. 4) is expected to get added attention with its focus on the connected home. The technology only gained in popularity with homebound consumers during the pandemic and is likely to continue spread as automobiles, appliances consumer electronics merge in the home. Han, who previously headed Samsung’s Visual Display Division and last month was named co-CEO of the newly named DX (Device eXperience) Division, said in a blog post that he will discuss collaborations with “industry experts and partners to create a truly enhanced connected experience.” Samsung is expected unveil a new line of connected appliances, including refrigerators with an updated Family Hub LCD screen, which now supports Alexa and Samsung’s TV Plus service and built-in SmartThings Hub technology.
• The Digital Hollywood conference remains scheduled for Friday (Jan. 7) in a virtual format with an emphasis media brands and technology, including streaming, the content of which has risen during the past year as a ready-made source for licensing. Among the panels will be “Future of TV and Streaming” featuring Evan Glamanco, SVP Sales Strategy and Ad products at WarnerMedia and Grant Michaelson, VP Business Affairs at Disney Branded Television and others. There also will be a “Future of Brand Partnerships & Influencer Marketing” session including, among others, Tori Wechsler, Digital Media Agent at Creative Artists Agency(CAA).

Amid the rising concern about the continued spread of coronavirus variants, one thing remains clear: the in-person trade show must  go on. But it will likely evolve into a combination virtual and in-person event that continues to connect exhibitors,  attendees, licensees and retailers.