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Digital Signage: Opportunity Ahead

By 2011, the digital signage market will be worth $2.59 billion, according to InfoTrends, an analyst firm based in Weymouth, Mass. That's a lot of opportunity. But in order to feast on the opportunity and not just nibble at crumbs, AV integrators will have to think outside the box?which means selling more than just boxes.

BY 2011, THE DIGITAL SIGNAGE market will be worth $2.59 billion, according to InfoTrends, an analyst firm based in Weymouth, Mass. That's a lot of opportunity. But in order to feast on the opportunity and not just nibble at crumbs, AV integrators will have to think outside the box—which means selling more than just boxes.

“If AV dealers aren't bringing value to customers, they won't be around long-term,” says Jeff Collard, president of Omnivex, a Concord, Ontario–based maker of software for signage applications. “They can't go around selling projectors any more.”

What can they do? Understanding the other technologies that go into a modern digital signage application will help shed new light.

One important opportunity is in the area of content creation, which can be a source of both revenue and market differentiation. For example, instead of offering just the displays and installation, integrators can also provide content by adding creative expertise in-house, by partnering with a company like an ad agency, or by reselling prepackaged digital content, such as news, sports, and weather feeds.

“That's all stuff that can be purchased wholesale and then resold,” says Brad Gleeson, vice president of business development and general manager of CoolSign at Beaverton, Ore.–based Planar Systems. “If you're getting that content and bringing it into the network for your customer, then you have the opportunity to earn a little margin on that.”

Providing and managing content also means recurring revenue, so the invoices don't stop once the displays are installed. That after-sale revenue gives the integrator more flexibility when bidding on a job because it lets him compete aggressively on the hardware component knowing any margin losses could be offset later. Offering a one-stop shop of devices and services also allows integrators to go where the opportunities are.

“Integrators and resellers should consider adding services, [such as] installation, consulting, ongoing hosting/management, and content creation,” says Dan Woodward, a senior product manager at Walnut, Calif.–based ViewSonic. “The nondisplay components make up 74 percent of a sale, and all show double-digit growth in projected sales. This includes media players (30 percent), management software (10 percent), and installation (34 percent).”

CONTENT IS KING

Some clients want the ability to create and manage their own content instead of farming out the task. Such end-users may still require products and services that integrators can provide. One example is higher education, where campus shootings over the past two years have some schools turning to digital signage as a way to disseminate alerts quickly and widely.

“We are seeing great interest from education: K-12 and community college,” Woodward says. “Education is keen on student communication, [such as in] offices, classrooms, and student unions, and also for emergency notification systems.”

When the signage isn't displaying emergency alerts, it's often used for everyday information such as what's for dinner at each cafeteria. That application highlights another opportunity in digital signage: networking. Using software like Scala's InfoChannel, a manager at the campus dining department can sit down at a PC, pull up a predesigned template, type in a menu for the day or week, and then schedule it for automatic distribution to every display in every dorm.

“Remote templates are revolutionary in our world,” says Tom Johnson, president of Digital AV, a Fort Wayne, Ind.–based integrator. “It shift some of that content design capability out to direct users.”

Display vendors also are catering to that market with their own content software.

“We have pre-made, vertical-market–oriented template content,” says Planar's Gleeson. “That allows any of our integrators to [provide] a series of images and dynamic content slides that are easily customized—[such as with] the customer's corporate logos and colors—and create very professional-looking content.”

Regardless of whose software is used, many vendors and integrators say that clients see centralized control as a way to reduce the cost of updating and distributing content.

“Centrally managing the content is key because they don't want to have to spend a lot of time updating each screen,” says Bruce Goldstein, senior manager for design and business strategy at Sharp.



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