Aug/100
MY VIEW: Where the big bucks are for digital signage by a SCREENS.tv guest contributor
What’s the state of the digital signage business today? And where’s it heading? Steve Gurley, senior VP of marketing and new market development at Symon Communications, tries to make sense of an often confusing sector…
Before inspecting the state of the digital signage industry, it is vital to understand the architecture, operating models and business models that power the marketplace. In such a multi-faceted industry, the interplay between each can have a huge impact on every corner of the business.
The primary function of a digital signage system is to play multimedia content on one or more electronic screens installed in venues (e.g. retail stores and hotels) for the purpose of informing, educating, entertaining or persuading viewers. At its most elementary level, a digital signage system is four technologies working in concert to support the primary function. These four technologies are a content management system, a content scheduling system, one or more media players and one or more displays.
The content management system manages the collection and distribution of digital assets (including videos, graphics, pictures and text) to one or more displays on a visual communications network. The content management system is the heart of a digital signage system. Sophisticated content management systems manage the real-time collection, delivery and display of data, manage access to digital assets, provide user access administration, manage approvals, provide proof-of-play reporting, provide network utilisation/management controls and support data visualisation.
The scheduling system typically directs how the content management system handles the collection and distribution of digital content. In other words, the scheduling system tells the content management system which asset to play, where, at what time and on what date. The more sophisticated scheduling systems allow administrators to define content transition effects, content layering effects, content triggering rules, schedule repeats, interactivity and more.
The media player can be broadly defined as the interface between the content management system and the screen. It is the media player’s responsibility to collect the digital assets from the content management system and then pass them on to the screen in an appropriate format for the screen.
A typical digital signage installation is concerned with deploying screens that have high mean times between failures, are equipped with anti-burn-in technologies, possess high energy efficiency ratings, support standard display protocols, and feature commercial-grade cases and warranties.
Operating models
A digital signage system may be operated on either a “hosted” or “premises” basis. The terms hosted and premises refer to where the two major components of a digital signage system (i.e. the content management and scheduling software) reside, how they are operated and how they are billed to the venue owner, if billed at all.
A hosted system (also known as “software as a service” or SaaS) is a digital signage system that is administered and operated by a third party on a server that is remotely located from the venue in which the media players and screens are installed. In a hosted model, the venue owner is given access to the scheduling system, usually via a Web browser, in exchange for a monthly subscription fee. The remotely-hosted content management software then communicates content to the venue’s players/ screens via the Internet.
The key benefit of a hosted system is that it requires little upfront capital commitment by the venue owner, because major hardware and software components are not purchased. The downside is that almost every aspect of the system, including features, functions, operations and management, are out of the venue’s control.
A premises-based system is a digital signage system that is purchased upfront and then installed at the venue’s premises, on its hardware and behind its firewall. The system also is operated on the venue’s network.
The key benefit of the premises-based system is that the venue has complete control of the system, from both operational and security perspectives. The downside is that it requires a larger initial capital investment and a larger operational support commitment. This model is typically embraced by companies that demand maximum control of systems that run on its IT infrastructure.
Business models
There are three business models from which venue owners may choose: ad-funded digital signage, traditional digital signage and ad-supported digital signage.
In an ad-funded digital signage deployment, a third party provides a digital signage system to a venue at little or no cost to the venue owner. The third party then seeks to recoup their initial capital outlay and ongoing operational expenses by selling ads that will be subsequently shown on a dedicated portion of the venue’s screen. The venue is free to use the other non-dedicated areas of the screen to deliver their message, which is typically focused on informing, educating, persuading or entertaining viewers.
This is a model that is typically used today by grocers, pharmacies, fast-food restaurants, convenience stores, small businesses and small retailers. The key benefit of this model is that the venue owner incurs little to no cost to deploy the system. The downsides, however, are many. They have no control over the total message being delivered, no control over the features and functions of the system and little to no control over system stability. Ad-funded digital signage systems are almost always provided to venue owner on a hosted basis.
In a traditional premises-based digital signage deployment, the venue owner purchases the digital signage system to address a specific need, which, again, is characteristically focused on informing, educating, persuading and/or entertaining customers or employees. The venue owner then takes fiscal and operational responsibility for maintaining the system and the content it shows. Typically, corporations, hotels, casinos, universities, hospitals and banks use this model.
In a traditional hosted digital signage deployment, the venue owner contracts to use the digital signage system on a subscription basis to address a specific internal need. The venue owner usually pays a monthly subscription fee for access to the system and then supplies the content. Typically, smaller venues such as small-to-medium-sized businesses use this model.
An ad-supported system is a hybrid of the ad-funded and traditional models. In an ad-supported model, the venue owner uses the system to meet a specific internal need but then works to sell advertising to either offset the cost of the system or make money from the system. Ads are typically sold to companies that do business with the venue, and both the venue owner and advertiser typically benefit from the success of the ads.
The ad-supported model can be either premises-based or hosted. The premises-based version of this model is typically used by large retailers, mall operators, arenas and stadiums. The hosted version is typically used by small businesses.
Where’s it going?
The industry as a whole is doing well. However, five years ago it was forecast that by 2010 the digital signage market would reach nearly $2bn in revenue. In reality, the industry is generating less than half of that.
The current pool of digital signage manufacturers is finding that the smaller revenue pool is making the competition extremely intense. Hardware manufacturers and software developers are engaged in a fierce struggle to capture a piece of the smaller pie. As the competition has intensified, prices have come down.
As prices have dropped, more digital signage suppliers have gravitated toward a hosted model as a way to compete in a low-cost environment. Suppliers of low-end premises-based systems are seeing tough competition from an ever-growing pool of hosted suppliers.
Even the screen manufacturers are getting into the hosted solutions game. In the last quarter alone, LG has released a low-cost hosted solution, and NEC has announced a free hosted offering. Most likely, hosted solutions will do well with small and medium-sized businesses but will not make significant inroads in large corporations.
It is clear that these new hosted entrants will steal business from premises-based suppliers that have no compelling value-add. Premises-based suppliers that can offer advanced features, such as interactive signage, real-time data, sophisticated content transactions and the delivery of content to a broader range of displays – including mobile, desktops, kiosks and marquees – will continue to do well. However, they will still feel the pinch of price competition.
Those companies that are delivering ad-funded solutions will continue to grow but at a slower pace. Ad-funded digital signage has had a tough time attracting advertisers and agencies. The ad-funded model has just not been able to provide the quantitative measures or the broad reach (in other words, the number of screens) that agencies demand. Ad-funded signage also will come under increasing threat of attach from newer, more compelling technologies such as mobile advertising.
Traditional digital signage will continue to grow as more corporations use electronic displays to replace old, large-print signage. The premises side of traditional signage will continue to be the primary growth engine for digital signage. Digital signage has the glitz that large corporations want and can afford.
Ad-supported digital signage will do well. Companies like Wal-Mart will increasingly deploy digital signage and will look to their suppliers to help fund the systems. There has been tremendous growth of this model in Europe as major retail brands have adopted the ad-supported model.
In summary, the digital signage industry will indeed grow – but not at the breakneck pace predicted five years ago. Prices will come down as technology improves and as competition plays a governing role in the market.
The low end of the market will be relegated to low-cost hosted solutions, and the high end of the market will be ceded to those providers that can offer feature-rich premises-based systems. Traditional premises-based signage deployments will be where the big money will flow, followed by ad-supported.
This article first appeared in a slightly different form in Signage Solutions magazine.
www.symon.com
Jun/100
Digital Signage
This summer has been very busy in the new office of NV3 Technologies. We have been working on a completely new version of our Digital Signage software. It was redeveloped from the ground up and is online and ready for you to try it out for FREE. You can check out the Digital Signage by going here. The new software as a service has a slick new player that runs on our mediaBox and monitors the status of the player. We will be placing our complete line of new mediaBox players online shortly.
May/100
Clear wireless Internet comes to Baltimore
NV3 Technologies has been using WIMAX for over a year now so we are very excited about Clear.
CLEAR is the first network built for your on-the-move life and NV3 is an Authorized Agent.
With speeds 4x as fast as 3G in virtually every corner of Baltimore, CLEAR is designed with the internet in mind. The blazing 4G network gives your laptops and desktops the speed and access they need to really deliver. That’s why it’s the ultimate connection.
How is it different from what I have?
How isn’t it different? Today’s 3G networks were built for making phone calls. But Clear was created for the internet. That means you’ll have loads of 4G bandwidth wherever you are. So whether you’re downloading movies, uploading videos or streaming games, you can do it all ridiculously fast.
What can I do with it
Everything you’ve always dreamed about doing on the internet that the slow drip of 3G makes so painful. Watch live soccer from Europe, from your kids soccer game in Seattle. Email ginormous presentations from the road in seconds without having to pay for a mega-grande just to get a connection. Download a video of that conference you couldn’t attend in the middle of a trainload of commuters. With this kind of speed you can do it all.
What does it cost?
The name is CLEAR and so is the pricing. As an authorized agent we offer combined mobile and home plans, home only plans, and voice plans starting at $30 a month. There are no tricks and no surprises. All you get is a connection 4x the speed of 3G* for the same price as a ball and chain connection from your phone or cable company.
Where can I use CLEAR?
When you have CLEAR, you have a connection wherever you are in your city. Use it at home. Fire it up on the road. No more searching for wi-fi hotspots where you’re fighting with 20 other people for bandwidth. CLEAR goes places wi-fi can’t get close to.
Apr/100
Next-gen charging kiosks juicing up with digital signage
Baltimore, Md.-based NV3 Technologies displayed at this month’s KioskCom samples of its newest mobile device-charging kiosks. The units, like those of the company’s competitors, offer quick-charging for a range of phones and other portable devices.
But the company’s NTC line of kiosks signals a shift in the charging kiosk business model. By incorporating touchscreens, digital signage and Internet connectivity, the kiosks are expanding the range of applications — and potential revenue sources — for this type of self-service kiosk.
NV3 managing partner Scott Calhoun explains that the company started out with a simple, service-driven model. Customers would plug in their phones and receive a 15-minute quick charge for a fee. When the company began manufacturing its own kiosks to improve ROI, he says it discovered a different, more flexible business model.
“The charger is really drawing the customer in and holding them there for 15 minutes,” he said.
Therein lies what NV3 sees as the future for device-charging kiosks. Customers with phones connected to a kiosk for several minutes offer a semi-captive audience for deployer messages.
And the additions to NV3’s product line, such as touchscreens and digital signage, create a number of possibilities for clients to connect with customers and employees.
Calhoun and managing partner Ryan Doak say the possible uses for this deployment model are extremely diverse. A hospital could equip a charger with a patient-information touchscreen, helping patients’ families stay in contact and informed during emergencies. An airline could deploy digital-signage-equipped kiosks in its employee lounges, saving the headache of disseminating paper- or e-mail-based HR information on a global scale.
“Once we were putting everything together, we found out it wasn’t to hard to customize [the kiosk] depending on what the customer needs it to do,” Calhoun said.
In a recent deployment, NV3 installed a series of mall-based kiosks to present interactive information from Toyota. Customers at the kiosks encounter digital signage about the brand, and a touchscreen interface that allows them to contact Toyota and purchase products online. With customers held at the kiosks while their phones charge, Toyota is able to present deeper, more complex messages, and can conduct more sophisticated transactions than might be possible at a kiosk with nothing there to hold the client in place.
Calhoun says a series of upgrades will soon add more capability to the charging kiosks. The company is retrofitting charging hardware so that it can track the types of phones charged, the number of times a user returns to the kiosk and other demographic information that could paint a very precise market picture for phone manufacturers, advertisers and kiosk deployers.
How this new tracking information will affect future device-charging kiosk deployments remains to be seen — the technology is only just beginning to come online. But the expansion in possibilities offered by digital signage, interactive features and enhanced connectivity show that the once-simple device-charging kiosk is becoming a powerful, versatile tool in deployers’ arsenals.
Matt Cunningham is the editor of KioskMarketplace.com. To comment on this story, send comments to editor@digitalsignagetoday.com.
Mar/100
NV3 Technologies Featured on BMORE Media
A startup technology company that counts Toyota and United Airlines as clients is moving next month to Canton’s Emerging Technology Center. Business partners Ryan Doak and Scott Calhoun say they hope the move from their current office in Fells Point to the business incubator will give them the resources they need to grow NV3 Technologies LLC.
Mar/100
Kioskcom and Digital Signage Show
NV3 Technologies is proud to announce that we will be exhibiting at the show. We will be located at booth 238 so please come see us. We will have our new products on display and will be offering financial incentives at the show.
For 14 years, KioskCom & The Digital Signage Show have delivered strategic, marketing and technical business solutions for organizations focused on enhancing their customer engagement programs through digital media such as kiosks, digital signage, self-service, digital out-of-home/place based media and other customer-facing technologies.