Million-Dollar Question For Event Industry: Is Virtual A Permanent Disruption?

In August 2020, at the start of the pandemic, Rafat Ali, the founder of the travel-industry B2B brand Skift, wrote an essay that I thought was unusually insightful and forward-looking.

It was called “The Event Industry Is Being Confronted By Its Napster Moment,” and it suggested that the business of in-person events was at the same crossroads that three other industries had faced in the last 20 years. All of those industries -- music, video, news -- responded poorly to disruption, at great cost to entrenched players.

When Napster came along -- combined with the new mp3 format -- it effectively demonetized the music industry. The record-company stranglehold, in which consumers were forced to buy CDs at close to $20 for one or two good songs, collapsed. It took years to build back the industry, and the revenue focus shifted to live concerts.



The radio industry suffered as well. After a while, 99-cent songs on iTunes emerged, and 99 cents was worth the price for quality assurance. Later, services like Spotify emerged. But even then, there was far less revenue for record companies and artists.

“Zoom is the Napster of the event industry,” Ali wrote. “The ease with which you can put on good-enough virtual events with a global audience, almost for free, undercuts the underlying economics of the physical-events world.”

Consequently, Ali wrote, all kinds of business events are in danger as the world gets used to digital formats. Those formats might be clunky now, but they’ll only improve dramatically in the years ahead.

What’s more, for the last two years, the events industry has habituated attendees to free or low-cost events, when previously they’d been paying thousands of dollars to attend and exhibit at live events and tradeshows. Surely, eliminating the cost and hassle of business travel stands as a relief.

With this essay still on my mind, I was struck last week by a compelling counter perspective from Joel Davis, founder of JD Events, and one of the most respected people in the events industry.

So I asked Davis, a long-time colleague and friend, to elaborate. What follows is a transcript of our conversation, edited for brevity and clarity.

Publishing Insider:Joel, you say that “virtual shows have had a two-year opportunity to demonstrate that they can replace or replicate live events, but they are not.” Why do you draw that conclusion? Is there data behind what you're saying?

Joel Davis: I’ve been hearing about virtual events supplanting live events ever since the internet was invented. I didn’t agree then, and I don’t agree now. Certain types of events can be effective in a virtual/online format. But not B2B or B2C exhibitions, where the dynamics of product demonstrations, product introductions, in-person networking and buyer/seller relationship-building are the key drivers.

In the markets that JD Events serves, exhibitor satisfaction rates for virtual shows were dismal. Our customers begged us not to hold virtual replacement events for our postponed shows. Many had tried other virtual shows and had done poorly. I like to say that you can find a date online -- but you can’t actually go on the date.

Isn’t there a difference between watching a concert online at home and going to an in-person concert? Sure, you saved time and money and got to bed early, but is the entire experience more enjoyable?

Some organizers are experimenting with a hybrid approach. This may be an ongoing trend for certain events, but keep in mind that virtual events take just as much time and labor to produce, plus they require different skillsets than most show organizers possess, and they depend on the technology to work flawlessly.

Hybrid formats may work for some event, but producing an in-person tradeshow simultaneous with a virtual tradeshow, just to reach those who chose not to physically attend, is not a viable strategy.

Publishing Insider: You also say, “It has been proven that exhibitors don’t do well at virtual shows.” That’s powerful. Is there empirical data supporting that?

Davis: I have all the proof I need in our particular markets, directly from our customers, based on extensive conversations and many market surveys.

There is zero demand for us to transition to a virtual tradeshow. Most show organizers I know hear similar feedback.

The vast majority of attendees and exhibitors are tired of staring at screens all day. They crave the human experience. Freeman, a global leader in events, found last year that “85% of respondents say in-person events are irreplaceable.”

I believe that the pandemic, having shut down small and large gatherings for nearly two years, has actually reinforced the value and the irreplaceability of in-person events. Further, I believe that, as more people work remotely and spend increasingly more time isolated from other people, in-person events will take on an even more vitally important role than ever before.

Publishing Insider: Isn’t there a case to be made for extending audience through the virtual format? There’s no longer a limit to who can attend.

Davis: Sure, you can make that case. Virtual shows can arguably be seen by more people, and from much further away, without the need for travel. Which, depending on the type of event, can be a good thing. But that doesn’t translate to more business or ROI for exhibitors when, for example, someone sitting on their laptop in Cincinnati doesn’t stop by their booth in Las Vegas to chat and experience their product.

Trade show organizers have plenty of ways to extend their event brands and reach a broader audience 365 days a year now, in a myriad of formats. We can remain engaged with our communities 24/7 and provide value well beyond the once-a-year in-person event. We don’t need virtual shows to do this.

That’s the future direction of event organizers, in my opinion: annual, or episodic, events where education, networking and business is conducted in person, complemented by year-round digital engagement.

However, the notion of producing our annual industry gatherings virtually, instead of in person, or even in hybrid format, is not what our business communities are asking for.

Publishing Insider: Similarly, with the exception of registration fees, virtual takes the cost out of events. No hotels, no airports, no time out of office. What’s your thinking there?

Davis: Sitting at home saves lots of time and money. Which is great if you’re taking an online class or in an interesting conference session remotely. But how does that help a restauranteur who is looking to taste, smell and source hundreds of new products under one roof in one day? How does that help the audiophile who wants to see, hear and touch all the latest high-fidelity sound systems assembled under one roof?

How does that satisfy our need to grow within our chosen professions by meeting with key industry players, establishing lasting relationships and catching up with old industry friends at our annual industry events?

A virtual trade show simply can’t come close to replicating all that is possible at an in-person event.

And what happens to a virtual show when there’s a tech glitch, or you’re in the audience and your home WiFi goes out, or you lose power? We have all experienced getting frozen out of a Zoom meeting. I would not want to bet our entire business model on audience members having flawless WiFi and glitch-free technology.

Publishing Insider: Is the incentive not to travel underscored by the natural hesitancy that many people feel about business travel now, and health concerns at gatherings with many people?

Davis: I believe, if they haven’t already, most people will return to traveling and attending events that are important to their lives. People may be more selective than they were pre-COVID. So the best, most relevant, industry leading events will be the winners.

But COVID is not suddenly going away any time soon. We will be living with it and mitigating against COVID variants for years, just like today’s flu virus is a variant of what was known as the 1918 Spanish flu virus. Life and business will still always go on.

Well-organized exhibitions that implement proper safety precautions are extremely controllable and safe environments in which to network and do business. They are safer than grocery stores and safer than sporting events.

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