State of the Industry

It’s been a few days since the iHobby Expo ended for me. While the show continued on until Sunday, I left halfway through the day on Friday. In that time, I was able to accomplish everything there I wanted to accomplish. I was able to chat with Traxxas representatives (for nearly two combined hours), see the new items Horizon Hobby had to offer, and see every booth that had an impact on my segment of the store’s business (meaning that I, being the R/C department head, wasn’t really concerned with trains or plastic models).

Contrasting it with my experience nine years ago (the last time we attended the show before this year), it was a small show with minimal attendance. It isn’t a usual thing at a trade show to command anyone’s attention for two hours, but I was able to do that at Traxxas’ booth of all places. While I am pleased that Roger and I were able to attend the show this year, I am dismayed at the abysmal decrease in attendance that the economy as wrought on the show.

Some I talked to mentioned that they felt attendance was up for this year, when compared to last year. Without disbelieving them, I find it hard to imagine a sparser show floor.

I am left with a feeling that, more than most industries, the hobby sector has a long way to go before we all feel confident that we will stay relevant in this new, leaner economy.  There were no big announcements – no earth-moving revelations from any of the major players. Even the new Stampede 4x4, which is probably the most exciting release from the show, is at best a safe choice for Traxxas (at worst completely ordinary).

Don’t get me wrong; I’m as excited as everyone else for the new stuff. But I was expecting to leave Chicago with my mind blown; I left with it very much intact.

And that left me wondering: what is the industry afraid of? These new releases are all very safe – no one was making any gutsy calls or ballsy bets on any of these guys. It’s as if everyone was dealt an eight/nine off suit hand and checked around the table. It’s hard to win if you don’t play the game.

Surely they’re afraid of another downturn in the economy – who isn’t? But it has to be more than that. It’s nothing new that the economy sucks, and it has for a very long time in the hobby world. And we’re still searching for ways to stay relevant in the digital age of video games and smartphones – that’s why Horizon released the Force helicopter line: to grab the attention of a group that isn’t just interested in learning to fly, but want some of the shoot ‘em up action as well.

No, I think everyone is afraid of China. Not the country per se (though I think we have good reason to be). But every US industry is at risk from Chinese copies of our stuff overtaking the real deal. It used to be limited to simply pirated CDs and copied computer technology sold only in China – it didn’t affect US sales much, just Chinese ones. But now, thanks to the Internet, the “global economy” is just that – and Chinese manufacturers have discovered they can steal the intellectual property of US companies, WITHOUT REPERCUSSIONS, and sell the result of that IP back to US consumers.

And this is what the industry is scared to death of. Every time you have a new product or invention, the current expectation is that you have six months to cash in on it; after that, Chinese factories will start selling your product, without your permission, to your customers. And the Chinese government ignores the blatant theft, and lawsuits filed by US companies are almost never resolved.

The most recent instance of this is the influx of fake Spektrum receivers on the market. Horizon Hobby has a patent for that technology, but it doesn’t do them any good. They are losing sales to the Chinese companies to dumb to make their own stuff.

And now we have hobby shops importing merchandise from these fakes, which only serves to legitimize the thieves. Hobby shops that do this fail to understand the severity of the situation, trading a quick buck for the continued stability of the industry as a whole. They are the Benedict Arnolds of our economy, turning their backs on the US companies that made the hobby industry what it is. They have become part of the problem.

I have considered ordering batteries and chargers from a certain Chinese distributor. But I decided against it after realizing that I can’t live up to the standards we hold at Roger’s Hobby Center. The standards of customer service that we pride ourselves on would disappear if I were to deal with a product with no warranty. I can’t, in good faith, put an inferior product on the shelf in the interest of making money. Ill-gotten gains don’t become us.

But the ultimate casualty will be the hobby consumer, and I have little pity for the lot of them. Because it is the thirst for inexpensive replacements for quality products that will kill this industry – just another casualty of a competitive market some will say. But I don’t believe that the hobby industry can continue if the brick-and-mortar hobby shops die off. And that is what may happen if the Chinese manufacturers have their way – they want nothing less than the death of the US hobby industry so they have control. And when any one entity has control of a market, prices skyrocket. To use a crude phrase, they would have the US consumers by the short hairs.

As I left iHobby, I was left with a sense that the industry is just trying to weather the coming storm. But without your help, your loyalty to good products and brands, and your dedication to your local hobby shop, the levies may not hold, and the bastion of the hobby world may be left a rotting wreak on the shore.