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2018 State of the Industry Report

The world’s largest OLED video wall, comprising 820 open-frame panels, debuted earlier this year at an aquarium in Dubai, U.A.E.
Photo courtesy LG Electronics

While digital signage displays are specifically manufactured for use in out-of-home (OOH) advertising environments, IHS finds lower-cost consumer TVs that were not originally intended for this purpose are also being sold through business-to-business (B2B) channels and used in professional applications.

“Consumer TVs will continue to limit the growth of commercial-grade public displays,” says Sanju Khatri, director of digital signage for IHS. “As technology improves and prices fall, more users will risk buying them for use in commercial environments. Businesses that do not need to display sophisticated content may find they perform well enough for their purposes. We’ve already seen major consumer TV brands positioned in the public display space and we expect this trend to increase in the future.”

Looking further ahead, Grand View Research projects the global digital signage market will be valued at nearly US$30 billion by 2024, as more corporate enterprises recognize how creating and distributing content is an effective marketing strategy with the potential to reach a large audience.

In addition to the increasing popularity of screens larger than 1.3 m (50 in.), the demand for sharper images has been addressed with 4K displays. LCDs, which accounted for more than 50 per cent of industry revenue in 2015, are expected to continue to dominate, particularly as prices have declined, but LED screens are projected to see significant growth, accounting for more than 22 per cent of revenue.

Grand View’s report also notes the supply side of the digital signage sector has shown signs of consolidation, following a spate of mergers and acquisitions (M&A), including display manufacturer Barco’s purchase of Montreal-based software provider X2O Media in 2014, and joint ventures, such as the strategic partnership launched by LG Electronics and Manufacturing Resources International (MRI) that same year.

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“The most significant deal in the digital signage market was Stratacache’s acquisition of Scala in 2016, which resulted in a broad global footprint and total revenues that are expected to surpass the billion-dollar mark in the near term,” says Rickard Andersson, senior analyst for Berg Insight, another research firm.

Notwithstanding, Berg reports the digital signage industry remains highly fragmented, with a large number of different vendors active throughout the marketplace, and
the firm predicts new startup companies will continue to emerge is in ‘Internet of Things’ (IoT) software development.

“There are promising opportunities for software that will make it easier to integrate various data sources and marketing channels with digital signage systems,” says Andersson.

A new research report from consulting firm Global Market Insights also suggests future growth will be driven by the IoT. Digital signage has proven a suitable platform for creating and distributing content faster and less expensively than with printed media, the report suggests, but cloud-based computing via IoT has the potential to transform screens from mere displays to spokes in an overall hub that is capable of collecting complicated data.

Competition between specialized vendors and new entrants should continue the trend of rapid product innovation, although compatibility and interoperability issues remain between screens and media players, which may restrain potential market growth.

On another note, Technavio undertook a study specifically of the educational market for digital signage around the world, which it projects will enjoy a CAGR of more than 10 per cent, to top US$1.7 billion by 2021. To calculate the size of this market, the company’s analysts factored in all revenue generated by third-party providers that have collaborated with educational institutions to design and implement digital signage systems. These providers include integrators like AdFlow Networks in Burlington,
Ont., information technology (IT) networking hardware developers like Cisco Systems and screen manufacturers like NEC Display Solutions and Samsung Electronics.

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The study suggests digital signage is primarily being used to provide effective management of unstructured data when facilitating communications between teachers, staff, students and visitors. Content includes class schedules and wayfinding, sports team updates and announcements of such events as homecomings, job fairs, charity drives and extracurricular activities. As a result, Technavio says many schools’ paper posters, bulletin boards, flyers and other traditionally printed communications materials have been largely replaced by digital content.

Finally, Samsung commissioned a total economic impact (TEI) study by Forrester Consulting of the potential return on investment (ROI) for deployments of outdoor digital menu boards at quick-service restaurants’ (QSRs’) drive-thru locations. The study evaluated the benefits, costs and risks associated with real-world installations.

Forrester surveyed more than 150 restaurant professionals and interviewed existing Samsung customers with multiple years of experience using outdoor digital menu boards across major QSR chains. The study found a composite organization enjoyed a revenue increase of nearly US$2.5 million over a five-year forecast period. The costs of hardware, software, content, installation, testing, maintenance and support were more than outweighed by savings in labour and administration, increased order values and volumes, reduced wait times, improved conversion rates for promotional products and reduced food waste.

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