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2018 State of the Industry Report

Photo courtesy Outfront Media Canada

Digital signage
Assessing the exact size of the digital signage industry appears to be difficult. By way of example, one market research firm, Technavio, forecasts a CAGR of more than five per cent through 2020, at which point the industry’s value will top US$14 billion; while another, Hexa Research, suggests a CAGR of 6.1 per cent will achieve revenues of more than US20 billion by the same year.

The difference may be one of definition and scope. Technavio estimates the size of the worldwide market based on sales of equipment, software and services across a number of sectors, including retail, health care, banking and education. To explain its growth forecast, it cites digital signage’s advantages over other media, including dynamic control, audience engagement, targeted content and, especially, interactivity. When consumers can use touch, sensors and/or their own smartphones to interact with a screen, the company’s analysts explain, they tend not only to be more deeply engaged by the content, but also to provide more direct feedback.

“Interactive digital signage will see high adoption over the coming years,” says Sunil Kumar Singh, Technavio’s lead analyst for displays. “It helps collect and analyze customer data, which then may be used to offer special discounts, coupons and other incentives.”

Hexa, meanwhile, estimates the digital signage market was already worth more than US$13 billion in 2013 and suggests current growth is driven by such factors as improved user experience (UX), price reductions for digital display panels and continued advances in product development. Its own report divides the market by technology, application and geography. While LCD technology accounted for more than 50 per cent of global revenues in 2013, for example, the adoption of LED displays is expected to gain ground in the near future.

Geography-wise, North America captured more than 35 per cent of the market in 2013, but the Asia-Pacific (APAC) region has the highest potential, thanks to favourable economic conditions and decreasing prices of locally manufactured LCDs.

A third firm, MarketsandMarkets, valued the global digital signage market at nearly US$17 billion in 2015 and predicts it will enjoy a CAGR of 6.7 per cent, topping US$27 billion by 2022. It cites demand for emerging ultra-high-definition (UHD) ‘4K’ screens, LED-backlit LCDs and OLED panels.

By this company’s standards, kiosks represented the largest share of the market in 2015 and are expected to continue dominating it through 2022, as they can be installed in virtually any location and provide access to information, entertainment, education and many other applications.

In geographic terms, MarketsandMarkets predicts North America’s dominant position will continue, due to the region’s large number of digital signage technology and service suppliers. That said, increasing commercial and infrastructure opportunities offer a promising future in APAC and Europe.

Digital signage is also benefiting from the integration of real-time information management, ‘big data’ analytics, dynamic interfaces and ‘smart’ content. Indeed, MarketsandMarkets’ growth expectations for software are higher than those for hardware, including displays, media players, mounts and other accessories, which do not need to be purchased as frequently. The company valued the digital signage software market at nearly US$4.5 billion in 2016 and expects it to more than double within a seven-year period, topping US$9 billion by 2023, for a CAGR of 10.2 per cent.

The software market is dominated by content management system (CMS) offerings, which MarketsandMarkets refers to as the ‘nerve centres’ of digital signage networks and credits for ensuring the most relevant content is viewed by consumers.

North America continues to represent the largest market share for such software, as the region is home not only to many early adopters of display management technology, but also to companies that develop it, including such key players as BroadSign International in Montreal, Omnivex in Concord, Ont., and Scala in Malvern, Pa.

A high level of customer interaction in the retail, hospitality and health-care sectors is driving demand for content to be managed and frequently changed. As a result, commercial applications held the largest share of the software market in 2016.

Much as there are many software options, on the hardware side, consumer-grade TVs are posing significant competition for commercial-grade products, according to IHS. The company predicts the worldwide market for both types of displays used in digital signage networks and other professional applications will grow from 4.4 million units in 2015 to 7.7 million in 2020, representing a CAGR of 8.3 per cent. In 2016, growth was fuelled by higher numbers of 0.8- and 1.2-m (32- and 49-in.) displays being shipped, along with a rapid shift toward larger screen sizes in specific sectors. Displays between 1.5 and 1.75 m (60 and 69 in.) were the most popular category, for example, while those between 1.8 and 2 m (70 and 79 in.) were the fastest-growing in the educational and corporate verticals.

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