The Technology Market Lifecycle of Digital Signage
A History of Digital Signage
In one of my recent blogs, I pointed out that Enterprise Video Communications will be the fastest growing segment of Internet traffic over the next 5 years. Video communications is made up of a number of communications tools, both real-time and on demand. Digital Signage is one of these communications tools and according to the IDC is expected to grow at a 35.7% compound average growth rate.
Digital Signage has been more of a “nice to have” technology than a “mission critical” technology, but that is quickly changing. Digital Signage is evolving from its current Phase 1 technology evolution curve, to its Phase 2 technology evolution curve, by becoming a Digital Display Platform that is capable of much more than content communication.
It will take a few blogs to give you the entire picture of the current state of the digital signage market, so with this first blog, I will describe the first phase of the evolution in Digital Signage – a historical perspective that brings us to the current state of Phase 1. This perspective is critical to not only understanding how we got here, but in subsequent blogs, what the new Phase 2 technologies look like and how to distinguish them from Phase 1 technologies.
First, a high level definition of what Digital Signage is and the list of the components that make up a Digital Signage solution. Wikipedia says that digital signs are a sub segment of signage, and that they “use technologies such as LCD, LED and Projection to display content such as digital images, video, streaming media, and information and can be found in public spaces, transportation systems, museums, stadiums, retail stores, hotels, restaurants, and corporate buildings etc.”
What is a Digital Signage solution made up of?
A Digital Signage solution is made up of many different components coming together. If one or more of the components falls short, it can jeopardize the success of the entire initiative. The different components include:
- Hardware – server(s), displays, players and other sundry connection or signal distribution components
- Software – server and client (player) side
- Network and/or signal distribution
- Project management
- Physical installation
- Content creation
- Ongoing support
With this brief definition of Digital Signage and what a Digital Signage solution is made of, let’s dig into how this technology has evolved.
Historical view of the Digital Signage Market Development
Every technology goes through different stages of development as it comes out into the marketplace. Frank Lynn & Associates have created the following graph to show the stages of a technology’s lifecycle and the key customer question that each stage seeks to answer.
Technology Market Lifecycle: Frank Lynn & Associates
Stage 1: Does this work? – Content Show Creation
Digital Signage technology first came to market in the mid-1990s and the Scala solution was one of the first, if not the first, Digital Signage solution in the market. The problem that the solution providers were trying to solve was to make a software solution, that would allow a user to build a customized “Show” that could then be played smoothly on a digital display. The Show would be built using image and video files that would then be played on a screen just like a TV show or commercial.
Stage 1 of the Technology Lifecycle, is where a technology either solves the first problem or the technology dies. With Digital Signage the software suppliers were able to create the software to allow users to create and play a show locally on a screen.
The show could be created, but now it had to be able to operate in a commercial environment.
Stage 2: Can you solve my business problem? – Content Playability
The challenge was to make the show play at many different locations, on an affordable player (PC) that had enough power (this is the time when Windows XP ruled) to play the content files without having the playback of the show be “jerky”. It had to play smoothly and without a glitch. Just like watching a TV Show. Oh – and the content had to be delivered to the players on networks of 15-20 years ago.
The Digital Signage suppliers solved the business problem by doing a number of things:
- They created custom hardware players that had powerful and fast processors with enough muscle to play “fat” or “heavy” content files and Show effects like tickers running across a screen which are very compute intensive, as they require the image to be re-drawn on the screen every time the image moves over 1 pixel
- They built customized player software which enabled local caching and playing of content
- They built compression algorithms for the content enabling it to be sent over the networks more efficiently and de-compressed at the players
The solution providers built an architecture, which was based on working around the scarcity of IT resources – player power and limited network capacity. It was brilliant! And that architecture continues to dominate the first Phase of the Digital Signage market.
Stage 3: Can you make this easy to buy, deploy and support? – Digital Signage Deployment Manageability
The DS suppliers had solved the first two problems and they now had to address the next market problem, i.e. making their solution easy to buy, deploy and support.
They worked with resellers and integrators, especially in the AV market, who understood the inherent AV nature of the hardware requirements. These resellers worked with their local customers to sell, deploy and support the solutions. But the DS suppliers also had to build IT manageability into their solution so that a network of 10, 100, or 1,000+ digital screens could be managed remotely.
These remote management capabilities included:
- The ability to see what was playing on any screen
- To determine if the show was playing
- To monitor the network status and;
- The ability to re-boot players remotely
Finally, after the major problems had been resolved and the technology continued to mature, customers demanded better price performance and new competitors sought to differentiate their solutions by doing things better and cheaper.
Stage 4: Can you reduce my purchase cost? – Agnostic, Low cost players
I think most readers have heard of Moore’s law, which says that the power of processor technology will double roughly every 2 years. Networks are also much faster and more robust today than they were 5-10 years ago. The ironic thing is that the “scarcity” problems that had to be worked around in Stage 2 are becoming obsolete in Stage 4 of the market. Today you can buy agnostic hardware players for the Windows, Linux or other operating environments that are just as powerful as the proprietary players that were created in Stage 2 of the market.
The image to the left is an Intel Compute Stick. It is very much like a USB stick, and it connects directly into a USB port, but it is a bit longer and wider than a standard USB stick. It sells for between $100-$200 depending on features and whether you want a Windows 8 OS loaded on it or Ubuntu. This player and many others like it, are eliminating the requirement for the proprietary players in Stage 2 of the market and bringing the player price point down by a factor of up to 10 times.
When you combine these players with a Digital Signage software solution that does not charge player software licenses you save even more money.
Here is the same Technology Lifecycle Market graph with the different Digital Signage stages overlaid on top.
What happens to the Technology at the end of Stage 4?
The market will either commoditize, or the market will evolve to a second phase, where the same curve starts all over again, based on new market requirements and the technology that meets those market requirements.
This is what I see happening in the Digital Signage market. Stay tuned and learn more about Phase 2 of the market.