Nearly 600 Members Leave the Association in 2020
CEDIA held their annual State of the Association report for members today and, as usual, it was a well produced, glitzy affair more bent on selling the organization to all who choose to watch and listen. The Master of Ceremonies was Giles Sutton – no surprise for anyone aware of some of the inside actions taking place at the highly political organization. Sutton is the interim co-CEO of the trade group. But is it a trade group? Or is it something else altogether?
Learn more about what CEDIA said in their Annual Report to members…
I’m always curious about why CEDIA chooses this time of the year during a holiday week – just three days before Christmas – to hold this event. It is a time when many members are taking some time off from their businesses – perhaps travelling to be with family over the holidays. Surely, there is an optional date that would be better for members…no?
What’s that you say? You think it is because they have to wait until close to the end of the year to report on that year’s results? Well, that might be true but in past years it has been held as early as mid-November which to me seems more suitable. But perhaps members prefer this time frame.
A Confusing Mash Up of 2020 and 2019 Data
Another thing to keep in mind is that, confusingly, the organization reports on actions and activities from 2020, but their financial report is for the previous year, 2019. Remember, COVID-19 did not exist or impact our world in 2019. So these financial results are from “normal” operating times and a normally acting economy. (Actually, the economy in 2019 was quite strong.)
Giles Sutton kicked off the presentation talking about what a year 2020 has been, as COVID “wreaked havoc.” He hailed the “resiliency” of CEDIA members who, he said, had engaged in “leveraging CEDIA resources and each other to build skills, resources, and opportunity.”
‘Extremely Proud’ of Organization’s Accomplishments
The interim co-CEO said that he and Kory Dickerson, the other interim co-CEO, were “extremely proud of what that organization has been able to accomplish on behalf of our membership, and for the industry, in these unprecedented times.” But before he shared all of the progress that CEDIA has made in this year, he turned the program over to CEDIA Board Chairman Rob Sutherland.
Sutherland started by saying that he felt that “the amount of effort that the staff, the board, and the members exerted through 2020 is astonishing. And despite the difficulties we’ve all faced, I believe that we will emerge stronger than ever, as an industry and an association.” He went on to add his thanks to Sutton and Dickerson for taking on the co-CEO role while they search for a replacement. Finally, he welcomed the newly elected board members and thanked the departing members of the board.
Throughout the whole presentation, the slickly produced presentation included sometimes long segments that were actually mini-commercials for CEDIA, including various global members in short videos saying why they belong to the organization, or why they volunteer for the organization, and so on. If you watched closely, you saw many of these same faces or their same organizations repeated in multiple advertisements throughout the presentation.
It’s All About The Education
From here the presentation turned to their educational achievements. The first milestone he mentioned was CEDIA classes presented at ISE in Europe. More than 400 students from 63 countries participated in the 41 CEDIA classes presented. No information was given about how this compared with results from previous years.
Another accomplishment, Sutton said, was the all new CEDIA website and the launch of the CEDIA Academy. He noted that while they were working on building these online properties, they had no idea what was to come and how critical these resources would turn out to be in the following 2020 year – the year of COVID. He offered some participation numbers for the Academy in 2020. He also said that there had been substantial participation in online webinars and roundtables in 2020. But as Sutton jumped back and forth between 2019 and 2020, it was easy to lose track of which accomplishment was for which year.
CEDIA Expo Virtual Registrations, Not Attendance
Sutton went on to discuss the success of CEDIA Expo Virtual – a 2020 accomplishment. But I noticed he highlighted as an accomplishment that the 2020 CEDIA Expo Virtual had 900 registrations…but did not reveal how many unique visitors actually attended the event. This matches the way the Emerald referred to it as well, only quoting registration figures.
Another topic important to many members that Sutton brought up is the CEDIA certification program. Sutton mentioned that the association conducted a significant overhaul of the certification program “with over 400 items reviewed, [it was] the largest exam development project CEDIA has ever done.” Sutton then turned to Samantha Ventura, CEDIA’s head of education, to delve a little deeper into the organization’s education programs.
Ventura did a deeper dive into their 2020 educational initiatives, including discussing the creation of a new cabling and infrastructure technician (CIT) certification program, as well as the integration systems technician (IST) certification. The organization put out a new book in 2020 and will have another new book in the first quarter of 2021. The new certifications – CIT & IST – need further curriculum development, so we have that to look forward to in 2021, as well.
Sutton Extols CEDIA Strong and Other Programs
Back to Giles, he moves on to a discussion of what he deems to be the success of the CEDIA Strong program the organization announced in 2020. “Thousands of members, and the industry as a whole, have participated in CEDIA Strong events and services,” Sutton suggested.
The interim co-CEO went on to highlight the new CEDIA Career Center which he says helps to showcase available jobs and talent in the industry. He touched also upon the new CEDIA Propel affinity program just recently announced, which seeks to introduce new products and technologies for (or rather, to) members.
CEDIA also remains active in government matters, Sutton says. This year – I assume he means 2020 – they have tracked over 640 legislative bills in all 50 states and Canada. They have also followed over 80 regulations in 28 states that could directly impact integrators. There was no mention of what actions, if any, the association has taken in regard to these items.
Anyone Want to Volunteer?
The CEDIA awards in 2020 were conducted virtually, due to COVID. However, Sutton hailed the fact that over 5,000 attendees were drawn to the online event, “an astounding audience to celebrate the best-in-class work in our industry.”
The program then moved to the topic of volunteers. Sutton says that CEDIA has 170 volunteers in 30 volunteer groups. The organization honored three of these volunteers for their exceptional work, including:
- Overall Volunteer of the Year is Stuart Robertson of Sound Living
- Education Volunteer of the Year is Janeen Gaskins of Gaskins Charity
- New Volunteer of the Year is Pete Trauth of Nirvana Home Entertainment
2019 Financial Discussion: The Plot Thickens
At this point, Sutton turned the program over to Kory Dickerson to discuss what he calls the audited 2019 financial performance. However, as in past years, CEDIA only reveals a few top level bits of data, often only provided in terms of percentages. The organization does not reveal its full financials to members.
However, as a finance friend of mine likes to say, “The devil is in the details.”
In 2019, Dickerson said that revenues jumped from $9 million in 2018, to $16.5 million in 2019, an increase of $7.5 million. That is an impressive 83% jump in revenues. However, it is important to note that most of that revenue increase – $7.2 million of it to be exact – came from gains on the investment of the $36 million the organization received from selling the CEDIA show to Emerald Expositions.
Is CEDIA a Trade Association? Or an Investment Company?
It would appear that the other part of that increase came from a significant gain in its share of the revenues from ISE (Integrated Systems Europe) – a show it shares ownership of with AVIXA, the commercial integration trade association. CEDIA’s share of the ISE revenues jumped from $6.75 million (2018) to $7.1 million. That’s a 5.2% gain equating to about $350,000.
So it would appear that CEDIA’s growth did not come as a result of any of their operational activities at all. It would appear that their revenue gains are totally the result of gains on their investments – the Emerald endowment fund (I’m teasing here, if it’s not obvious) and their ISE investment.
But…Expenses Increased as Well
Dickerson went on to say that expenses increased as well. Except, he preferred to call them investments – “significant investments in both the association and the industry,” as Dickerson put it. It was a significant increase too, from 2018’s $13.1 million to $15.7 million in 2019. That is an increase of $2.6 million or 20%. These “investments” were in “educational development, member programs & accessibility, and its workforce.”
But just exactly what were these millions of dollars in added expenses? According to Dickerson, some of these were the result of assets acquired in 2018, including their shiny, spanking new CEDIA headquarters building in Fishers, IN – but also the acquisition of the Tech Summit sales representative show, and the Cinema Designer software. The interim co-CEO says that these expenses were only partially included in 2018 numbers (based on the time following the point at which they were acquired then), while they were included in the full year for 2019.
Total net assets for CEDIA is $40.2 million and increased about $800,000 in 2019. Dickerson said, “Please note, the association is positioned securely to support the industry and our members into the future with a strong balance sheet.”
Then Sutton Dropped a Bomb
It was here that the presentation quickly moved through a brief presentation on the number of members in the association. Like a bomb, it dropped quick and they moved on, but its impact was shocking …to me at least.
In what has to be his most remarkable understatement of the whole event, Sutton said, “No question, new member recruitment would fall into the category of challenge for us.” As soon as he said this, my ears perked up. I have had, at times, difficulty in getting the organization to reveal actual member numbers. But to their credit, this time, they put the numbers on the screen for all to see…and it was ugly.
Nearly 600 Members Dropped Out of CEDIA in 2020 – The Largest Ever One Year Drop
CEDIA is reporting that in 2020, they have a total of 3,364 members. That number is a global number, representing all members from all countries around the world. Sutton says that, of this number, 453 are new members. What he doesn’t say is that the number also includes the exodus of 589 members out of the organization, a drop of 15% as compared to the total of 3,953 members in the previous year. To my knowledge, this is the largest one year drop in membership ever experienced by the association.
Sutton’s explanation for this dramatic decline seemed a little dubious as well. Sutton attributed the decline to the fact that the association had transitioned from their normal recruitment activities to attract new members to, in the wake of COVID, focus greater involvement in supporting current members and “supporting industry.” However, it seems likely that this decline in membership is as much an issue of member retention as it is a recruitment issue.
Record Recruitment of Overseas Members; But Still a Red Flag
Sutton extolled their success in “record growth” in the number of new members joining the organization from the UK, India, and the rest of EMEA (Europe, Middle East, Asia). CEDIA’s global footprint, he told members, is now in 77 countries, “all of which took the opportunity to engage in our education offerings.”
Although Sutton tried to end on a positive note, the numbers on the chart told the sad story. Even with the record overseas recruitment, there is no getting around the fact that the association lost nearly 600 member companies in 2020. Clearly, CEDIA needs stop the outflow of members and recruit new ones to replenish those who have exited the organization. That membership decline should be a huge red flag for the board and management.
I just wonder why we aren’t hearing the board accurately ascertain and describe the issues surrounding the problem of that exodus…and then reveal their proactive plans to turn it around. All I hear on that is…crickets.
But We Have LOTS OF Standards, White Papers & Podcasts
Quickly moving on, Sutton shared more organizational “wins” talking about their output of standards, white papers and podcasts.
“Finally, we’ve made great strides when it comes to standards, best practices, and the continued output of white papers and podcasts. The podcast downloads have reached an incredible [his emphasis] 75,800 downloads and is still growing by the day,” Sutton said.
Director of Technology & Standards Says Good Things are Coming, Including ‘A Whole Bunch of Podcasts’
The CEDIA executive also noted that there have been fully 1,750 downloads of white papers. Sutton then turned the program over to Walt Zerbe, CEDIA Senior Director of Technology and Standards.
Zerbe noted that in 2020 CEDIA received accreditation from the ANSI – American National Standards Institute – as a standards development organization. He also noted that they have several programs and updates planned for 2021 including:
- Releasing a new recommended practice for HDMI design & verification in Q1
- Opening up for revision a recommended practice for video for a media room, home theater, or cinema
- Releasing an all new recommended practice for audio
Zerbe also said that there will be four new white papers in 2021 and “…we’re going to have a whole bunch of podcasts.” Finally Zerbe revealed that CEDIA will be taking over full control of the R10 standards group that was originally launched twelve years ago as a joint venture with the Consumer Technology Association (CTA). Not exactly sure why he’s so excited about that, but he says it will be good for CEDIA members.
What CEDIA Did NOT Say
The whole presentation lasted nearly 40 minutes with nary a break. There was a lot said, but at the same time, a lot was left unsaid. For example, I heard nothing about their progress against the goals the board itself set eighteen months or so ago. The board took a year to come up with a new business plan. They hired a high-paid business consultant out of the U.K. to facilitate the planning process and now…no mention of those goals or a report aligning results against those goals at all. What’s up with that?
I keep hearing from really successful integrators, big name folks whose names you would likely recognize, tell me that they are not renewing their memberships. What’s up with that?
‘Off the Charts’ Engagement with Integrator Members
In his summation, Sutton said in 2020 CEDIA has “been more connected to our members then ever before,” adding “…integrator engagement in particular has been off the charts.”
Yet when I speak with members, I’m not picking up on this enthusiasm for the organization he refers to. And when I see a dramatic 15% one-year decline in membership, that fact seems to suggest a very different story than¹ the one he expresses.
Feels More Like a Sales Event, Than a Business Report
For the last few years, I’ve come away from this event feeling like I just exited a high-pressure sales event. You know, like one of those free 3-day resort vacations where you have to agree to attend a sales presentation where high-intensity salespeople brow-beat you into signing up for a time-share contract.
I feel like CEDIA executives are always selling me that everything’s great, that there’s not a care in the world, that they are winning at everything that they do. And yet, reality just feels different – like driving away in a new car that the salesperson convinced you was perfect…and noticing a subtle rattle as you drive off into the sunset.
Learn more about CEDIA by visiting: www.cedia.net.
CORRECTIONS
- ¹ – 1/5/2023 – Corrected a typo from “that” to “than”
Thanks Ted for this thoughtful, balanced and insightful assessment of the CEDIA Annual Report, spot on as usual.
My firm has been a member of CEDIA almost since the very beginning of the organization. At that time it was much smaller and clearly focused on doing everything possible to help integrators improve their businesses through education, networking, representation to vendors, and so on.
Unfortunately, what I see now is a bloated “global” organization, rich with cash from a sale that was never even discussed with it’s members. An organization completely divorced from and often apparently uninterested in, the actual, day-to-day operational needs of it’s members.
As you have pointed out in previous articles, there has often been a complete lack of transparency around what the BOD is doing against any stated goals, including exactly how much of their members money they are spending in pursuit of those goals. I think members would find it very illuminating to see a detailed accounting of precisely what CEDIA spends on business class flights, luxury hotel rooms, fine dining, expensive wine, salaries and so on. This is supposed to be an organization that exists to benefit its members, not the BOD and senior staff. .
The truth is that the larger vendors in the industry have all been seeing the declining ROI for several years. That is why they have all started doing their own annual events, where they can connect directly with their dealer partners one-on-one for a fraction of the cost of attending the CEDIA trade show. A trade show that CEDIA itself quietly sold off and does not even run anymore.
The growing irrelevance of CEDIA is further underlined by the fact that groups like HTSA, Azione and ProSource have all stepped up and now offer the compelling and relevant education, networking opportunities and vendor benefits that CEDIA has failed to deliver.
CEDIA was originally founded by Tom Doherty and Chris Stevens as a grass roots organization run by and for it’s members. In my estimation it has sadly become a faded caricature of what it was intended to be and most importantly, an organization with little to no transparency or accountability to the members..
We will not be renewing our membership this year.
WELL SAID Richard and nicely laid out Ted- the truth is what it is and if they were on the mark 600 members would not be exiting. I also agree with the query about the vanishing ultra-expensive business plan which seems MIA.
And your alternative is…….to quit rather than fix it?
Have you been to CES lately?
Thanks for your comment Richard. I assume you may not be aware that I actually decided to try and do just that: work constructively from the inside to try and make positive changes to CEDIA.
I served on the Board of Directors for almost 4 years, first as a Director and then on the Executive Committee as Secretary. During that time I had a front row seat with regard to exactly how CEDIA (the organization) operated.
What I can tell you is that during my time in that position I was fortunate to work with many long time CEDIA staff members who worked earnestly, honestly and diligently on behalf of the members. I was humbled by the professionalism, creativity and perseverance of folks like Ron Fleming, Dave Pedigo, Leslie Lowes and others.
However, in terms of the leadership in the organization, I was at times saddened and disappointed to see far less interest in delivering value for the membership and a far greater focus on using the BOD position to further personal career goals and enjoy the many “perks” associated with those positions.
To be clear, I also witnessed BOD members working hard on behalf of the membership. People like Bob Brown, Terrance Murray, Federico Bausone, Bill Skaer and others, quite obviously had decided to serve on the BOD for the same reasons I had and were clearly attempting to introduce and promote new levels of transparency and accountability. However, it became obvious that there were also others within CEDIA who did not share our approach and were quite content with the status quo.
After several somewhat tumultuous events, it became clear that actions were being taken to effectively “sideline” myself and others into positions where we had little ability to create any real change. Saddened, disgusted and disappointed, I resigned my position just short of 4 years on the BOD.
So yes, I did actually attempt to get involved and create real, impactful and positive change on behalf of all CEDIA members, including myself. What I did not realize was the degree to which the organization had been hobbled by a small group of self interested politicians. I use that word intentionally, if for no other reason than to point out that I would clearly make a very poor one. I believe in direct, honest and transparent communication. I believe that great responsibility should come with an equal measure of accountability. I assumed that an organization like CEDIA which purports to represent, first and foremost, the best interests of its members, would be interested in the same things. Unfortunately that is not what I experienced.
Finally, in my initial post I mentioned and credited Tom Doherty and Chris Stevens for creating and launching both CEDIA and by extension, our entire industry. I stand by that, but I also need to credit others who were working hard and breaking new ground in this space. Specifically, Tom Walker who we all know as the founder of Audio Control, sent me a quick note to point out that Tom Danner was also one of those early industry pioneers and in fact, served as the first president of the organization.
Danner got his start, along with a few others, doing one of the first West Coast large automated houses for a software pioneer named Bill, located in Seattle on Lake Washington. At the time (circa 1988) the automation was supplied by IBM PCs running the then new 386 Intel processors. Another excellent data point and reminder of how far we have come, so thanks for that Mr. Walker..