El Segundo, Calif. —The digital signage industry faces tough competition from cheaper, conventional TV panels that replace specialized custom products, according to a new report from IHS Technology. The signage and professional displays market is forecast to reach $13.76 billion in 2014, up from $13.58 billion in 2013, but still down from $14 billion in 2012.
The report, “Signage & Professional Displays Market Tracker – Q1 2014,” also finds the market will remain flat from 2015 to 2018 despite a steady increase in shipments over the same time period. IHS defines the signage and professional displays market as digital signage monitors and digital signage televisions used in venues such as hotels and public spaces.
“The future for display vendors in digital signage is going to be challenging,” said Sanju Khatri, director of digital signage and professional video at IHS, in a statement. “The industry faces tough competition from ordinary consumer television products that are being used by commercial establishments instead of specially outfitted digital signage displays, and the result is a loss for the signage industry as sales go instead to consumer-type replacements.”
The large-format displays used in digital signage are LCD panels designed specifically for commercial use. These displays are built with commercial-grade panels for longer wear; enclosed in metal chassis for better heat dissipation, and use special backlight modules for specific levels of brightness that enable them to show images clearly even in vivid indoor lighting, said IHS. In addition, some models include media players, image sensors, touch modules and customized software or programming to show ads, information, promotions or entertainment as well as touch, gesture or embedded vision interfaces that interact with customers for added engagement.
These integrated features distinguish digital signage products from the conventional TVs available in normal retail outlets, Khatri stated. Because the panels and electronic components for conventional TVs are not designed for commercial use, they cannot meet the requirements needed in commercial settings and will wear out much more quickly, according to the report. They also cannot meet custom requirements.
“One problem for the industry is that commercial establishments forgo professional signage monitors, believing consumer-type TV sets to be useful alternatives,” stated Khatri. “To establishment owners, however, the downside of using conventional TVs becomes apparent after about six months when the units are non-functional. End-users then lose money and become disillusioned, not realizing that professional signage displays could have averted the problem. Meanwhile, the signage industry gets maligned or becomes saddled with a bad reputation, further hindering signage prospects for both current and future customers.”
In addition to spending time to educate buyers about the differences between digital signage and consumer TV displays, other challenges include competition for marketing dollars, particularly in companies that make both digital signage and consumer TVs, and manufacturing efficiencies. “As the cost to make panels continues to decrease and the panels become cheaper to sell, the industry needs to find other ways to compensate for the losses brought on by new competencies,” according to Khatri.
Khatri believes digital signage panel manufacturers and set makers can leverage existing advantages including high-brightness displays of 1,000 to 1,500 nits without compromising display lifetimes, ultra-narrow bezel displays for data visualization, ultra-high-definition displays for high-end applications such as architecture firms and medical operating theaters as well as touch, gesture or embedded vision for segments like education, for use in interactive whiteboards.
Digital signage makers also can partner with players in the larger ecosystem for signage, to develop useful synergies such as teaming up with other hardware and software vendors to provide smarter all-in-one units that are capable of handling multiple sources of information, integration with mobile platforms, data analytics or real-time data integration for better targeted advertising or promotions, said Khatri.