Digital Signage Market Statistics

Author: Bill Gerba on 2005-01-23 22:17:54


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On January 20th, market research firm InfoTrends/CAP Ventures released a new report on the state of the digital signage industry (which they alternate between calling the Digital Display Systems market and the narrowcasting market). The lowdown (as taken from this summary page):

[N]arrowcasting revenue is currently valued at $452 million. InfoTrends/CAP Ventures expects this market to experience a CAGR (Compound Annual Growth Rate) of over 20%, reaching $1.3 billion by 2009.

At the same time, however, the market sizing and forecast show that the largest single revenue component for this industry is and will continue to be external advertising revenues. An additional $161 million in advertising revenues were generated in 2004, and this amount is expected to increase at a CAGR of 40% to reach $857 million in 2009.

...

Key findings of this study include:

Sales of hardware, software, installation and integration services, and support for all commercial display applications totaled nearly $1.7 billion in 2004.
For networked display systems in retail and public spaces, network operation / management services and advertising revenues generated an additional $413 million.
This industry is expected to demonstrate a CAGR in excess of 25% over the next five years.
The list of industry vendors continues to change as companies leave and enter the industry, but is increasingly becoming segmented into a few leaders and a larger number of companies still working to create traction and critical mass.
Over the next five years, cost-effective LCDs will be the most popular technology for digital signage applications because of their longevity, reliability, low power consumption, and attractive price point.

There are even some pretty pictures to look at on the summary page. Now, I'm sure I've vocalized my concerns about industry research before, however there have been relatively few professional studies of the digital signage market, so it's good to see what other people are thinking.

It�s not surprising to see that advertising is expected to drive the growth of digital media display networks, since retailers have been looking for new ways to reach their customers, and ad agencies have been clambering for a way to deliver. What�s confusing to me (and perhaps would be cleared up if I read the full report) is why advertising revenues and network operations/management fees are bundled together in their growth chart. The other thing that I found interesting was how they predict that amount of money spent on the displays themselves (e.g. the plasmas, LCDs, etc.) is expected to about equal the amount spent on the digital signage software and installation/logistics and miscellaneous hardware (mounting brackets, network switches, and so on) combined. Now factor in the economic reality that the prices of these displays are going to drop dramatically between now and 2009, and we come to the conclusion that either a) the prices of these other things will come down as well, or b) people will continue to spend more money for bigger and better displays for their digital signage networks.

Take all of this with a grain of salt :)

Comments (3)

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2008-01-16Francie Mendelsohn writes:

I am not sure if we've ever met but I have been to Wirespring briefings in the past. We ae getting asked more and more about the DS business and are starting to consider following it along with kiosks. The K industry seems to be split - some going after DS and others absolutely not. I agree that the market potential is bigger than kiosks will likely ever be.

That report is now 2 years old - are they publishing a new one anytime soon? Not that we'll buy it - those InfoTrends guys are (and always have been) VERY EXPENSIVE. Any market insight/potential you can share would be great.
Thanks,
Francie

2008-01-17Bill Gerba writes:

Hi Francie,

I know that InfoTrends and Frost & Sullivan almost appeared to be trading off each year (since both were on a two year cycle), but I haven't seen another report from InfoTrends recently. Personally, having seen the 2007 Frost report, it's hardly worth reading (I found at least three significant errors). iSuppli, on the other hand, has published some excellent research on the industry recently.

With regard to whether it's an easy area to expand to from the kiosk space, that's a tough call: digital signs have so many different forms and functions, and their success rates are so closely tied to the industries that they serve, which is quite different (imo) from self-service kiosks. On the other hand, from a project planning, logistics, and budgeting perspective, digital signage does look similar to kiosks.

2010-02-22Chris Salisbury writes:

We are a new company who has just created a software that combines cell-phone based user interaction with ALL social and viral marketing elements. So, essentially, the kisosk/DDS worlds have collided into a completely interactive experience for multiple simultaneous users. A scalable version will be available on the market soon.

By the way...I'm a huge fan of this site! Thanks for all that you do.

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