Based on feedback from 500 organisations across W. Europe and the US, Futuresource Consulting says, the corporate vertical continues to show a strong propensity for growth in the adoption of digital signage at a time where the wider market is beginning to show signs of maturity (in some segments) and emerging territories are posting declines in the face of worsening economic conditions.
In short, look to the corporate market for growth.
The corporate market offers a large addressable audience, existing communications infrastructure (which signage solutions can leverage) and the growing desire of companies to communicate with employees and partners in increasingly diverse ways.
Ben Davis, Senior Market Analyst, reports annual volume growth for commercial Large Format Display (LFD) product (excluding videowall and interactive whiteboard product) reached just 6% globally in 2015, down from 10% the year before and 20% in 2013.
“Large chained installs in sectors like automotive, QSR and retail banking continue to prop-up rising volumes in larger Western markets but a growth ceiling is becoming an increasing concern for suppliers as penetration in these early adopter verticals rises.
“Over 30% of organisations surveyed in our latest round of research are using screens outside of meeting spaces for the purpose of digital signage. Large organisations with headcounts of 500+ show the highest rates of adoption but it’s the SME market, below the top tier of enterprise, which provides the largest addressable opportunity in terms of scale. Requirements in this sector are typically heavily cost driven, often based on small networks running template driven signage, with the potential to overlay signage content on existing screens used to deliver broadcast content.
“From a supply side perspective, the last few years have seen increasing diversification of solutions as vendors seek to align products to individual verticals, opening up new customer bases. A key facet of this strategy has been the rising availability and declining cost of lower end solutions designed to service small network environments like those seen in SME office spaces.
“The rising penetration of SoC solutions in screen hardware, the decreasing cost of low end media players and the increasing availability of template based content management solutions have all made digital signage more accessible to corporate customers. Penetration in the segment is rising and this positive trend is highlighted by our survey with 14% of companies that do not currently operate digital signage in office spaces expecting to do so during the next two years.
“A primary driver for the adoption and expansion of digital signage networks in the corporate space is the increasing influence of IT managers and IT integrators on AV purchase decisions. This trend is happening at a time when the AV signal distribution market is making its first significant inroads into replacing conventional matrix switching products with IP based solutions. Residing on a company’s central network, these video distribution platforms sit alongside other network based communications tools, providing IT and communications managers with opportunities to create increasingly centralised and integrated solutions.
“IP solutions account for a small proportion of the AV matrix switching market at present (<5%) but the cost of these solutions is falling as the cost of Ethernet switches comes down and video compression standards improve. These solutions can offer numerous benefits and significant cost saving potential for larger networks spread across corporate campuses. Perhaps most importantly for the signage market is the flexibility these solutions offer. Any screen in any location can receive any video stream on the network and adding additional screens is as simple as adding an additional Ethernet switch to existing infrastructure. Over 50% of companies we surveyed which currently use digital signage in their offices expect to expand that network within the next two years.“
Davis adds, “The future adoption of IP based video switching solutions will aid network expansion and help maximise the utility of signage installs in office spaces.”