Famously, Harold Macmillan, a British Prime Minister of the 1950s, said once that governments were often re-directed by “Events, dear boy, events” (although Wikipedia says that the attribution is a mistake).
Last week, I was at the Gitex & Infcomm MEA shows in Dubai. One of the topics that we spoke about was that there are some major events coming up in the region and it got me thinking about the impact of events on display markets. The events we were talking about in the region were the World Expo in Dubai and the football (soccer) World Cup in 2022 in Qatar.
It has often been said by analysts that the World Cup and the Olympics drive increased sales of TVs. Meko, the company that publishes Display Daily, used to track and forecast the European TV market. We published data from 2004 to 2012, but we never saw a clear pattern between the “even years” (when there is either a world cup or an olympics) or the odd years (when there is neither). We always cautioned brands to be careful about over-optimism about the effects of these sports events. Paul Gray, then of DisplaySearch, now of IHS, and a long term watcher of the TV market also used to warn brands not be too bullish.
Our data for TV sales in Europe showed no boost from events
That is not to say that there was no effect. There was certainly an effect on the market, but it was about moving demand within the year, rather than boosting the overall volume of the market. The TV market is very seasonal, with peak sales in Q4, followed by a slow down in Q1 and a further drop in Q2. By Q3, there is a start to the build up in Q4. The World Cup and Olympics take place in June and July, while the Olympics takes place at the end of July and August. To exploit the idea that consumers might like a new TV to enjoy the spectacle, retailers tend to run promotions in the two or three months before the events, which pulls demand and production forward from Q3 into Q2.
However, not infrequently, there is not such a huge demand for new TVs for these events as the store owners hope (especially if a particular country is knocked out of the World Cup early on, or fails to qualify) so retailers then find that they have excess inventory which then tends to be discounted to clear them. That price cutting probably has as least as much effect on the market size as any extra demand from consumers!
It occurred to me that in the days of the CRT TV, pretty well the best way to watch these sports events was to have a TV, making it a social event by inviting friends and family (One time Display Daily contributor, Pete Putman was famed for his Super Bowl TV parties – check out the report on his 2003 party). However, the development of bigger displays, whether big sets or projectors in sports bars, or shared outdoor LED displays in certain city locations, has meant that the best experience may no longer be in the home, especially if you live in the city.
If we turn to professional displays, where Meko continues to research and forecast, there is often a big boost to sales of digital signage and large screens in the countries that are hosting these events. We have often seen a spike in infrastructure investment, not only in the stadiums and venues for the events, but in transport, retailing and hospitality. We saw a big pick up in the digital signage market in the UK before the London Olympics which reflected the wide investment beyond the stadiums and Olympic Village.
The Russian digital signage market was also strong before the Sochi Winter Olympics in 2014. However, the economic and political problems in Russia (not to mention the fallout over the lack of the subsequent use of the facilities in Sochi may reduce the investment that goes into the World Cup in Russia in 2018 (although the Sochi stadium will get some more use then).
The Russian World Cup venues are widely distributed
Returning to the opening topic, despite the weak oil prices, Dubai remains committed to a major event in 2020 which is close to the fiftieth anniversary of the founding of the UAE, which Dubai is a member of. The country plans to boost hotel rooms from 85,000 in 2014 to 160,000 by 2020, which makes Dubai around the same scale as Las Vegas for hotel rooms. It will build a 438 hectare site with new transport and other facilities. Qatar is going to have to build a lot of stadiums for the 2022 World Cup, which will also mean a lot of investment. (BR)
