WireSpring Blog

PRN: A Digital Signage IPO Story

Author: Bill Gerba on 2004-05-23 17:18:00

It seems that the tech IPO market is begging to open up a bit, if the public's response to the Google IPO is any indication. Of course, any quickly growing and highly profitable company should draw some attention from people looking for a solid investment.

The reason that I bring up tech IPOs at all is because in my web travels I also noticed that one of the bigger digital signage in existance has also decided to file for IPO. The company, PRN (formerly Pics Retail Networks), claims that it is the world's largest in-store television network, with over 5,000 screens under its management in chains like Wal-Mart, BestBuy and Costco.

PRN has been around for a while, and with bluechip clients like those mentioned above, it makes sense for them to IPO to gain some extra cash for expansion, and to shore up their present financial position (employing 185 employees takes a lot of money). The most interesting thing about their filing, in fact, are the filing documents themselves. Since nearly all of the companies involved in the digital signage and interactive kiosk markets are private, there is precious little information about their financial strengths, employment numbers, etc. Most of the time, we're forced to rely on expensive and less-than-precise information from market consultants. But with the S-1 filing documents for PRN, we can see that despite earning $112M in 2003, the comany only turned a profit of about $10M, representing about 8% margins. More interestingly, 2003 appeared to be a banner year for the company, as they reported sizable losses in 2001 and 2002, and their first quarter disclosure for 2004 suggests that they're doing about 40% less business than for the same period last year.

Of course, PRN's business model is not only to develop technology (which is what we do over at WireSpring), but also to own and manage the network, including creating and scheduling content and advertisements. So while the disclosure does give us some insight into the overall strength of the market and the abilities of our competitors, it is somewhat clouded by all of the expensive and time-consuming content creation, as well as the somewhat unusual business model of the company.

The bottom line, though, is that if there was any doubt before that in-store television could be big business, there shouldn't be any more. And aside from what PRN is doing, there are tens of millions of digital signage dollars up for grabs. With the cost of a deployment steadily decreasing thanks to more affordable computers, plasmas and LCDs, that number is likely to increase for some time -- and in a big way.

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