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.
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
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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