Pandemic Forces Rocky Mountain Audio Show to Cancel; Refunds Vowed in 7-10 Days

RMAF will issue full refunds to exhibitors that made initial deposits. “We understand that in times such as these, finances can be a delicate balance, so you may expect to see your refund within the next 7 to 10 business days,” said the organizers. For companies that issued a check, “it remains un-deposited, and we will return it or shred it at your direction,” they said.

Though parts of the U.S. are beginning to reopen, the number of people contracting the coronavirus, and the number of deaths attributed to it, are still rising, said organizers: “We remain uncertain that this is the right course of action, although we wish it were otherwise.” They referenced Centers for Disease Control and Prevention (CDC) projections that an “even more deadly second wave” of COVID-19 could hit in the fall.

Paul McGowan, CEO of PS Audio, credited RMAF’s response to the show cancellation Tuesday as “a sterling example of how to handle a tough situation.” McGowan is among the many vocal critics of the Axpona show, rescheduled from April to August in a Chicago suburb, then canceled altogether with no refunds issued to exhibitors. “I wish JD Events were as honest and forthright,” said McGowan of the Axpona show organizer.

PS Audio paid in advance the full $10,000 for its Axpona demo room, said McGowan. "So far, we’re out that money as JD Events has only offered, in a take it or leave it deal, to cover 50% of that for the next show, and then 25% of the payment over the next two years of shows,” he said. While JD Events founder Joel Davis “has his back against the wall -- I get it” -- said, McGowan, “he could have done a better job of being transparent of what happened to the money invested.”

When Axpona was postponed from April to August, “he had the funds to pull that off,” said McGowan. “If he had the funds to do the show in August, what happened in the few short weeks between postponing and canceling?” he said, encouraging Davis to “open up to us.” It’s in exhibitors’ best interest to help Axpona succeed, he said. JD Events didn’t respond to questions.

Dan Clark Audio President Andy Regan, a disgruntled vendor member of the Axpona advisory board, told us the show’s contract said if the event is canceled for any reason, “you’re supposed to get a refund, less costs,” Regan said. Davis likely has a “legal right at this point to not refund many people’s money,” said Regan, but it’s “completely unacceptable.” The companies that exhibit at Axpona are “in financial crisis right now as bad as you are,” he told organizers. Axpona exhibitors are “mostly these little- to mid-size manufacturers who have been completely out of business for three months” due to the pandemic, he said.

Regan, who paid by credit card, was able to get charges reversed because the show was canceled. Axpona organizers wanted to stretch out refunds over three years, said Regan, "basically locking you in for the next three years.” He was told JD Events had expenses, despite the show’s cancellation due to the pandemic, but that didn’t sit well with Regan who noted even airlines have been issuing refunds for canceled flights, without penalties.

The Home Entertainment Show (T.H.E. Show), scheduled for June, was another pandemic casualty: Organizers announced last week (see 2005140060) they had pulled the plug on the three-day event -- tentatively pushed off to an unspecified time in December -- when they received an updated contract from the California hotel, including a force majeure clause “that moved cancellation power out of our hands.”

The clause made the show’s cancellation contingent on CDC, or another government entity, imposing a travel or attendance ban 60 days before the event. The ban would have to be imposed by October to be applicable; that and other parts of the updated contract raised such concern that moving forward under those conditions was "untenable and irresponsible,” organizers said.

Saying they couldn’t get “solid answers” from the Hilton Long Beach after asking for clarification on health and safety policies, organizers canceled the show May 5 and requested a refund from the hotel; they’re still waiting for a response, Emiko Carlin, T.H.E. Show marketing director, told us Monday.

Hilton Long Beach General Manager Swietlana Cahill emailed Friday the situation is “a private contractual matter” and the hotel is “hopeful of reaching an agreement with the client.” When area restrictions ease, the hotel is “well prepared to welcome event exhibitors and attendees whether in person or as part of hybrid events leveraging virtual conferencing.” Carlin said she first heard of the hybrid event concept from us, and she has heard nothing from the hotel.

Hilton’s Cahill said the hotel is optimizing its 30,000 square feet of event space using “interactive seating diagram technology to plan functions in compliance with federal, state and local gathering restrictions.”

Cancellation of high-end audio events this year -- along with questions surrounding their future and a customer base that skews older -- have high-end audio companies groping for ways to reshape how they go to market going forward.

Sonos CEO Patrick Spence spoke enthusiastically recently about the wireless music company’s spike in April sales when customers could only buy online as retailers shut down during the pandemic. We asked some high-end audio companies if Spence is right when he says customers “don’t need to listen” (see 2005070025) to buy audio gear.

At the high end, product demonstration videos “are not likely to be able to help consumers be able to differentiate between products,” emailed Vacuum Tube Logic President Luke Manley. Even used VTL amplifiers sell well into four and five figures on resale e-commerce sites. Unlike $200-$500 Sonos speakers that can be returned after a home audition, a four- or five-figure VTL amplifier is a serious investment and not one easily transacted by e-commerce.

In addition to putting VTL's homegrown manufacturing operation in Chino, California, on pause, the pandemic affected the company's ability to sell and ship its audio components, since many of its retailers and distributors are also closed, Manley said. The company is using the downtime to do online training with dealers and is “thinking about how the tradeshow landscape will certainly change as a result of these pandemics, and how we might cope with this change by doing virtual marketing via video,” he said.

An additional challenge is “IP rights being enforced on YouTube,” Manley said. Music for a speaker demo is subject to copyright rules, and “will likely just result in the video being blocked,” he said. The future of virtual marketing “will certainly be webinars, podcasts and videos, with the objective of motivating consumers to go to their local retailers to listen and purchase.” To replicate the experience of a hi-fi show, VTL needs “some sort of time-limited bi-directional interaction for consumers to be able to see products up close, and perhaps inside, and to be able to ask questions and have them answered live,” he said.

The need to get a $13,000 amplifier in front of consumers, dealers and the press “remains,” Classe Audio Brand Director Dave Nauber emailed, saying the Sound United brand still believes in consumer shows. Still, Nauber is thinking of the future. “At whatever point it is deemed acceptable for 1) sporting events to have fans in the stands and 2) shows/exhibits to commence, we will need to see how consumers feel about it,” Nauber said. “It is one thing to say, ‘come on in’ and another to have the consumer say ‘that’s great, I’ll be there.’”

On how the high-end audio community should think about reaching consumers today, Nauber mentioned “private showings” and online transactions: “For high-end brands, finding the most effective ways to do that will become a priority.” Though he’s optimistic the world will return to “a kind of normalcy,” people are likely to be “quick to don their masks at the first hint of the next virus,” he said, “whenever that happens.”

Regan has taken an omnichannel approach to selling JH Audio's $700-$3,000 headphones: at shows, in stores and online through Listen Up, with fulfillment by Amazon. A lot of online sales are returned by customers that were “just demo’ing the products because Amazon makes it so easy to return headphones,” he said. Regan knows the store experience doesn’t appeal to everyone, especially younger consumers. To make the retail environment more appealing, stores are going to have to “be a destination,” said Regan, citing headphone stores in Asia that double as coffee bars.

“That’s taking into consideration we won’t have to social distance for the rest of our lives.”