The Metaverse At CES


(By Buzz Knight) In our continuing CES 2022 series I am pleased to present a conversation with my old pal Ben Arnold. He is the Executive Director, Industry Analyst for the NPD Group.

One of my favorite past experiences was moderating a fireside chat discussion with Ben back at Radio Ink’s Forecast 2017 about technology trends and the media. Ben always makes it look so easy!

Buzz: Well, CES 2022 is upon us. Every time CES occurs, I like going to one of the smartest people around technology and one of the best people to talk to, our friend, Ben Arnold, from the NPD Group. Ben, it’s so nice to see you. Happy New Year.

Ben: Buzz, Happy New Year to you, as well. It’s always a pleasure to get over with you around CES time to talk about what’s new, what’s happening, what’s the implication for any number of industries, so it’s a pleasure to be with you.

Buzz: First of all, do you expect this to be a CES year with big new innovation stories coming out of, really, the last two years of people being hunkered down with this pandemic?

Ben: I think what we should expect from CES this year is, maybe the term I’m looking for is pent-up demand. We weren’t able to be at the show in person to hear all of the panels and see all of the new products. However, I think we’ve been living through an interesting time with respect to technology and our needs. I think with that in mind, CES 2022 is going to be about some of those technologies, right, anything having to do with virtual. You and I are communicating virtually right now, the habits around that, whether it’s video, audio, whether it’s things like robotic remote surgery, I think we’ll hear a lot about, but I think that this idea of virtual and remote connectivity, I think, will be really
important heading into the show.

I’m going to throw a term out there. I know you’ve heard it. The Metaverse, I think, is going to be one of the biggest stories from CES. Again, that is very well a byproduct of everyone being at home and streaming video and streaming audio and playing video games. To me, it’s a natural progression. Okay, well, is there an environment where we can connect and do these things? As I think through some of those ideas, they are absolutely accelerated by the pandemic and lockdowns and doing things from home, working from home, and I think that that helped to accelerate this storyline, or this talk about the metaverse.

Buzz: How much of the metaverse is marketing terminology and how much is the reality of innovation?

Ben: I love that question. I think it’s probably equal parts at this point. As you know, my vantage point on the technology industry is through sales of devices. That’s how I understand and what consumers are doing.

One great example, VR headsets, one of the biggest sellers in technology over this holiday season and heading into 2022. That is a device that you use to connect with the metaverse. We’re seeing people buy the hardware that you use to get in touch with this digital environment. Is it matching the hype-cycle on the marketing side? Maybe not, but we are seeing adoption of these products grow really quickly. Again, to me, that’s a sign that consumers are beginning to engage with this idea a little bit.

Buzz: Staying on the storyline of marketing term versus reality of innovation and growth cycle, where does 5G fit into that?

Ben: 5G is one of the, I would say, ingredient technologies that helps you engage with something like the metaverse. It’s not likely that you’re going to be sitting at the bus stop waiting for a bus to come with your VR headset on, but you may very well likely be using your smartphone for certain things, and there are applications. Now, when we’re talking about the smartphone, it’s augmented reality, but again, this is another way that you can interface with this digital world that everyone’s talking about via the metaverse. 5G absolutely is an accelerator because it helps our devices connect in with that even faster. It enables more dynamic applications to run in that environment.

Buzz: There’s another big element of the show that I think has been in our face over the last, certainly, year or more, and that is the topic of cybersecurity. Will that be a prevalent theme as well at the show?

Ben: Again, you’re spot on. The more and more that we interface with these, I mean, digital environments, the greater the challenge of protecting, whether it’s our information or our systems, that becomes a much bigger deal and a much bigger challenge, right? If we’re spending more time in these digital environments, likely there’s more risk around these things. We’ve heard a lot about cybersecurity, I think, in the context of ransomware attacks and companies’ information being stolen, but there’s also this idea of protecting your own information, your own devices that connect on your network at home.

That, I think, takes an interesting twist as we change our behaviors, right? As we spend more time doing these virtual things, the stakes are higher for cybersecurity and our needs are changing, so I think that every year that we go to CES going forward, cybersecurity is going to be some kind of a trend. How that trend changes, to me, it changes with how we are interfacing with the digital world, and if we’re now talking about the metaverse, well, those challenges are a little bit different than me just popping open my laptop and surfing the net, so it’s really a reflection of the changing ways that we interface with the digital world, I think.

Buzz: Another one that appears like it’s been on a fast track of growth over the last two, three years has been technology around the medical business. Do you expect to see that growth at the show as well?

Ben: I think there’s two reasons to expect digital health to be another big trend to see at CES 2022. I mean, first, again, we’ve talked about connecting with each other virtually, things like telehealth, being able to see your doctor remotely, the different ways that your doctor can conduct an examination. I think that we’ll see a lot of companies showcasing products around that, and not just products as in hard goods, but also software that enables that.

But also, as a user, as an owner of technology, what kind of products can I buy that help me stay healthy and stay well? We’ve seen a lot of innovations in things like smartwatches, where they’re now able to calculate your blood pressure and your blood oxygen levels, so there certainly is this evolution in terms of the personal wearables and personal health devices that people are buying for themselves, that we go to the store and get, but also in terms of the applications and the devices that, say, your healthcare provider might use.

All of this has only become even more important in the age of COVID and in the age of, what I’ll say, uncertainty with direction of this virus as we look at the variants and how that poses challenges to consumers going out and doing their regular life activities. Things like telehealth and these remote ways that your doctors can examine you, I think, take on a whole new level of importance as we navigate this.

Buzz: Automotive, over the years, has really been a big part of CES, so I’m sure it will be this year as well. Any trend lines you see specifically around where automotive is going, whether it be from driver safety or whether it be from other bells and whistles that the car companies build in to help their business?

Ben: I think, in my opinion, the two biggest trends that we continue to see in automotive is autonomous in vehicles, and whether those are passenger vehicles or trucks in cargo vehicles, that continues to be a trend that companies are trying to figure out. How do autonomous vehicles operate amongst driver-operated vehicles? To me, that’s the next question.

It’s one thing to design a vehicle to drive autonomously in a controlled course, but when you introduce other drivers and other obstacles into that, that becomes an even bigger challenge. We’ve heard a lot about the next levels of autonomy being in these real-life situations. I think that that is something that the auto companies and the autonomous vehicle companies are going to be talking about a lot at CES.

Also, the trend towards electric vehicles, and how that can benefit the environment and be a little more of a convenience to people. What is this idea of the electric-connected car? What does that really mean for consumers, irrespective of autonomous or not, but things like 5G and connected services coming into the car?

Of course, my friends in the radio industry are very interested in understanding what are the consumer behaviors in a connected car, in an autonomous car? Because presumably, my time and attention changes when I don’t have to drive the car, and if my eyeballs can look at a screen or look at something I’m reading, that, of course, changes the dynamics for how people are consuming content.

I mean, these are broad evergreen trends that we see at CES each year. I think the detail and what we expect to see this year is how do we get to that next level in autonomy. What does 5G, now that it’s rolled out to more and more users, what does that mean for somebody in a connected car? What does that mean for the applications and services that we’re accessing? I expect to see a lot of products and announcements aimed at that end of the connected car/autonomous car spectrum, but I think that we are just at another point in the trend towards connected car and automobiles.

Next year, what we hope is that the story around autonomy is a little bit further along, that maybe that’s a bit closer to consumers in terms of innovation. Maybe what I’m looking for is what are some new applications that come out of that connected car. If I’m not having to keep my eyes on the road and keep my full attention on the road, what are some other things that I can spend time doing in that environment?

Buzz: You touched on radio with the connected car, so let’s talk about radio and media in general, on what you see implications at CES affecting radio, affecting TV, moving forward.

Ben: I think what I’ve seen over the last two years in terms of what people are buying, what consumer electronics people are buying. Again, this is my lens into the world, is that we’re spending more time consuming content. Whether it’s what I’m streaming through Netflix or what I’m streaming through my headphones, podcasts, streaming radio, all of these forms of content, I think, have taken on a much higher level of importance because our routines have changed, our time that we’re spending doing things has been disrupted and changed. But through this process, I think we sold eight million more TVs in 2020, and in 2021, we sold more TVs than that, so we’re really at this high watermark in terms of selling devices to consumers, they have more time to consume content using those devices, and when I put all of that together, that means that, right, the things that people on the radio do and the things that people on TV and video do take on a higher level of importance, right? People are more engaged with those sources of content.

I guess my next question is where do we go from there, right? How does that time change going forward? If I’m someone who creates content, how can I make that content stickier? Is it a matter of adding a blog to my podcast or to my radio show? Because we know people are, of course, consuming content in different modes of media. But I can’t impress upon you enough that people have spent this time buying more and more consumer electronics and what our research shows is that they’re spending more time consuming content that they access on those devices, so I think we’re very much in an age of content really being driven by more and more electronics purchases.

Now, I’ll answer a second part of your question is where does the industry go from here? I got that question from a group a couple of weeks ago. Let’s say I’m trying to put some new content out there, maybe I’m a creator, maybe I’ve got a podcast or something. Go where the eyeballs are. Again, people are streaming video, they’re streaming audio content. People have never been more engaged with video games than they are right now, so I think maybe what the marketing and advertising and the content space is moving towards is more of a multimedia type of a view where something like video games and however you term that becomes a part of that media mix.

I’ve got kids at home. They are not really engaged with traditional media. If somebody wants to get a product or a song in front of them, I think the smartest thing to do is to insert it into one of these big video game platforms because that is the avenue towards getting in front of young consumers and getting in front of this very tech-savvy audience.

Buzz: Every year at CES, we see the importance of cross-pollinization or partnerships, so maybe there’s a new form of that cross-pollinization and partnership that really can come out of this.

Ben: I would agree with that. Sometimes we take a position of old media or traditional media versus new media. I’m not sure that that’s the way to think about it. I think that instead, think about how more established media can work with some of these newer forms of media, right? How does a media plan with more traditional forms of broadcasts work in conjunction with something like a gaming strategy, if something like that exists? To me, those are the most interesting collaborations, when we see the radio broadcast community take something from what’s happening in gaming.

I think it’s really all about getting in front of consumers, getting in front of them when they’re engaged, and if you’re selling a product, or you’re putting content out there, hitting people when they’re most receptive to what’s going on. I think that gaming is just right now one of those really important mediums that marketers and advertisers and creators should be in front of.

Buzz: Well, Ben, I always look to you when I’m bewildered or confused about where the future is headed. Then every time I talk to you, I feel much better about it and much clearer, so I thank you for your time. Happy New Year.

Ben: Happy New Year, too. It’s always a pleasure to see you, Buzz. I hope to see you in person sometime soon.

Buzz Knight is the CEO of Buzz Knight Media and can be reached by e-mail at [email protected]


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