Professional Documents
Culture Documents
Copyright 2012 by the Case Research Journal and the authors. The authors developed this industry
note for class discussion rather than to illustrate either effective or ineffective handling of the situation.
The industry note was presented at the North American Case Research Association Annual Meeting on
October 29, 2010, in Gatlinburg, Tennessee. This project was made possible with financial support via a
NACRA case research grant and South Dakota State University.
41
42
Producer
Company
Distributor
End User
Entertainment
Venues
Resellers: Advertising
and Marketing
Companies
Integrators: Consultants,
Architects, Engineers,
and Project Managers
Company Direct,
Partners or National
Accounts
Commercial Indoor/
Outdoor Advertising
Transportation
Other
43
Commercial Indoor/
Outdoor Advertising
Transportation
Application
Other
Campus
Communications
Freeways, Tollways
& Roadways
Manufacturing
Billboards
Award Shows
Landmarks &
Spectaculars
Parking
Trade Shows
Performing Arts
Auto Dealers
Casinos
Worship
International Market
Because of the bulky size and weight of large digital signs, relatively few were either
exported or imported. Fabrication generally occurred within the region where the
product would be installed. In 2010 imports represented only 1.8 percent of domestic
demand, while exports accounted for only 0.8 percent of industry revenue. However,
U.S. sign manufacturers sometimes outsourced production to firms in foreign countries by sending design requirements and orders electronically, which reduced turnaround time and limited production problems.7
The two largest markets were the U.S. and China, half a world away from one
another, suggesting that any significant market penetration would necessitate incountry fabrication and installation. Design, engineering, and content could still be
handled in the home country of the manufacturer.
From 2005 to 2008 digital display was the fastest growing segment of the Chinese
advertising market with a compound growth rate of 80 percent, from 1.1 billion Yuan
in 2005 to 6.53 billion Yuan in 2008. VisionChina, the leading operator of outdoor
digital TV advertising networks in China, grew 2008 revenues by over 250 percent
and profits grew almost 400 percent.8 China overtook the U.S. in 2008 as the top
digital signage consumer as it prepared for the 2008 Olympics.9 China had the most
site deployments, while the U.S. still led in advertising dollars committed to digital
signage.10 Besides China, other major international markets for digital-out-of-home
44
(DOOH) advertising included the UK, Japan, France, Germany, and Russia.11 In early
July 2009 Samsung Electronics Co. announced that it was entering Japans market for
digital signs with 46-inch ultra-high definition (UD) LCD panels.12
A major industry analyst observed in September 2009 that digital signage networks tend to be country or region-specific. . . . Each major region also tends to have
its own set of solution leaders . . . (T)echnology winners will emerge and be defined
by major geographic marketplaces: North America, Europe, Asia, Australia, South
America and Africa.13 To emerge as a global leader would require consolidation of a
home market first. According to the same analyst, True globalization will likely be
fueled by entry of truly global entities.14
45
America. Retail accounted for 29 percent of the sites and 71 percent of the revenue.
Hospitality, healthcare, and transportation were also important verticals.
2008. By 2008 digital signage had become a major segment of the billboard and
sign manufacturing industry19 As Table 2 shows, digital signage was estimated to be
$2.86 billion (23.8 percent of industry revenue of $12.1 billion dollars).20 This revenue was not highly concentrated. The four largest firms accounted for approximately
11.2 percent of sign manufacturing revenue whereas the eight largest firms summed
only to 15 percent of revenue.21
Table 2: Billboard & Sign Manufacturing in the U.S. in 2008
Industry Segments and Percentages of Revenues
Non-electric
printed signs
Digital signs
33.2%
23.8%
Non-electric
screen
printed signs
14.0%
Luminous
tube signs
Fluorescent
lamp signs
13.3%
10.8%
Incandescent Total
lamp signs
revenues
(billions)
4.9%
$12.1
Source: IBISWorld Billboard & Sign Manufacturing in the U.S. 33995, July, 2008.
According to a 2008 study conducted by Multimedia Intelligence, retail, transportation, and restaurants/bars were the three largest digital signage verticals, while
education and corporate communications were making impressive gains.22 Other segments of significance were corporate, healthcare, transportation, entertainment, and
hospitality.23
Advancements in technology resulting in declining costs was a major factor in
development of the DOOH segment and helped account for the segments resistance
to the 2008 down turn in overall advertising expenditures. Other factors that were
driving the global digital signage market included urbanization and the growth of
retail spaces, flourishing tourism, people spending more time out of their homes,
and huge investments in the transportation infrastructure for outdoor advertising in
emerging markets.24
Expertise in measuring advertising impact was advancing; for example, one study
established that a relatively high percentage of all adults (62 percent) were aware of
advertising on digital signs, but the results were even more effective when targeted
to specific life patterns. More college students noticed this media (75 percent), while
59 percent of Hispanics versus 48 percent of the general adult population found the
advertising entertaining. Such studies established the basis for highly-targeted marketing and were critical for preparing ROI estimates based on advertising effectiveness.25
2009. In early 2009, the largest digital sign installed in the U.S. was at Walgreens
Times Square location. It was 17,000 square feet in surface, comprised thirteen interconnected plasma screens, and rose to 340 feet. Additionally, thirteen digital signs at
street level offered a wide range of advertising options for Walgreens suppliers. Each
hour of programmed content contained thirty minutes of paid advertising and thirty
minutes of Walgreens promotions and Times Square nostalgia.26
National sports also provided great visibility for the industry as broadcasters highlighted the wow factors of the Dallas Cowboys new stadium in Arlington, Texas,
that opened fall 2009. In addition to the largest HD screen to date, the StadiumVision installation by Cisco included nearly 3,000 digital signage screens throughout
the complex that delivered entertainment, pre-event, in-event, and post-event, using
46
video and content, such as out-of-town games and scores, trivia, weather, traffic and
news, in addition to the action on the field,27 all controlled by internal IT infrastructure. Stadiums in New York, Miami, Kansas City, and many in Europe received similar
StadiumVision installations in 2009. The trend was projected to continue as fan expectations escalated for a total entertainment experience.28 It was no longer just about the
game on the field; the total multi-media environment within the stadium elevated the
fan experience to a higher level. Industry observers saw that the future would belong
to equipment manufacturers and content providers who could continuously enhance
the product and meet or exceed ever-increasing fan expectations.
Another notable development was greater continuity between the digital screen
and the other four screens (cinema, TV, PC, and mobile) with interactivity possible.29
As an example, the nations first free, over-the-air broadcast of mobile digital television
to the public was launched in April 2009, a collaboration between Harris Corporation and WRAL, Raleigh, NC. Raleigh bus riders with a lot of dwell time30 could
watch monitors with hyper-local content that changed depending on their location in
the city; and they could interact via their mobile phones.31 More such interactions of
digital signage and mobile were on the way.32
Industry standards were further solidified in 2009 when the industrys first comprehensive training and certification program exclusively for the installation and support
of digital signage was launched.33
The overall outdoor and display advertising industry was affected significantly by
the recession in 2008 and 2009. Estimates were that 2009 revenues declined 11.6 percent to $6.29 billion.34 However, the DOOH sector outperformed the signage industry as a whole, growing 25 percent in 2009, as it approached its one millionth networked screen. The 4Q2009 North American digital signage industry index, a major
industry performance measure, rose by 10.8 percent, reflecting increased firm revenue,
screens deployed, the number of DOOH networks, and increased capital expenditures
and employment.35
The emergence of digital signage, both indoor and outdoor, was changing the economics of the advertising industry. DOOH required much higher front-end investment but yielded lower long-term operating costs than traditional signage media. And
this medium had only begun to penetrate the advertising market. For instance, of
Lamar Advertisings 159,000 billboards, only an estimated 1,100 were digital in 2009.
Although there would be reduced direct labor costs in changing displays at these sites,
other maintenance costs associated with the displays would likely increase. Some of
these costs were recouped through higher demand and, therefore, higher prices commanded by these sites. Additional savings would be realized from reduced printing and
installation costs.36
2010. Among the 2010 trends foreseen by industry observers were the continuing
emergence of content, progress in the development of industry content standards, and
the continuing shift of investors and advertising dollars as new ad-based networks proliferated. Software for managing content continued in its development as advertisers
sought to better target micro-markets.37
In February 2010, the tenth convention of the industrys largest trade show, the
Digital Signage Expo, had over 3,400 participants. Reflective of an emerging industry,
56 of the estimated 200 trade booths that showcased their products and services were
first-time exhibitors.38 Only a few were recognizable multinational firms (Mitsubishi,
47
Hyundai, Intel, Philips, Samsung, Sharp, and Sony) but these had already established
a position in this young industry.
Manufacturers of digital signs and the peripherals required to run them were only
a portion of the industry. The driver of the industry was the content providers who
designed the messages that filled these signs for various locationspoint-of-purchase,
point-of-dwell, in-store promotional screens, digital networks, and outdoor advertising. The key to this marketing medium was the development of networks of signs
linked by cable or wirelessly to servers that delivered content across the network
within a store or across an entire franchise system. Examples operational by 2010 were
Walgreens exterior signage, Wal-Mart TV, and numerous fast-food franchisers that
offered content through their own in-store network of digital screens.39
While some content providers sought to compete as cutting edge video and graphic
designers (e.g., Scala, MiniComm), others like RedPost, a Goshen, Indiana company,
saw a whole new opportunity at the low end of the market. Using digital signs as
bulletin boards, its products enabled local independent retailers and business owners
who could not afford sophisticated installations to manage content through web-based
software. For menu boards, employee announcements, in-store promotions, and other
simple content, the systems included basic text and graphic packages and were easily
managed.40
Another industry trend was the emergence of companies that could provide complete end-to-end solutions rather than customers having to rely on aggregators to
assemble the technology platform; content providers for video, graphics, and text;
installers to put the system in place; and others for after-installation service and support. Wireless Ronin Technologies, which specialized in menu signage for food installations at places such as stadiums, was one example of a firm that provided a complete
turnkey digital signage system that could be managed from one central location. Its
services included consulting, creative development, project management, installation,
and training.41
Many industry insiders suggested that 2010 would be the tipping point for the
industry. High growth, increased advertising revenues, standardization of communications protocols, the continued growth in the number of industry participants and associations, and merger and acquisition activity constrained by the recession suggested
that the industry was approaching its next stage of development.42 Market evidence
suggested so as well, as major players who had been sitting on the edge of the industry appeared to be ready to enter the market in much bigger ways. Dell, IBM, Cisco,
Oracle, and others were preparing new digital platforms or software, not to mention
Google (which had patents pending) and Microsoft who had been absent from the
market thus far.43 Some analysts believed the table was set in the industry for an
infusion of serious investment capital and the entry of major technology leaders with
global reach.44
48
Suppliers
In 2010, with the exception of the LED light source, the resources needed to create
digital signs were available abundantly either locally or regionally. These included aluminum or steel sheet metal, plastics, semi-conductors, circuits, wiring, and hardware.
Screen types including liquid crystal, plasma, and other fluorescent light were also
abundant. Content providers were also plentiful.
It was a time of transition for the industry as manufacturers began to produce
digital signs with plastic cases rather than steel. Design advantages of plastic included
its abundance, durability, lower cost and lower weight than metal, making plastic cases
easier and less expensive to transport. It was also easy for manufacturers to work with
suppliers on standard and custom design specifications like abstract shapes.
By 2010 LED was becoming the preferred light source for digital signs and other
peripherals. It was also being used to backlight LCD screens as well as for indoor and
outdoor lighting solutions. LEDs offered manufacturers and end users dynamic lighting that was durable, long-lasting, bright, and energy efficient.
While LED demand was projected to be 2030 percent greater than supply in
2010, LED supply was expected to grow rapidly.45 Taiwan and China were the largest
producers and expected to expand along with manufacturers in Japan, India, and Russia. Table 3 shows the number of fabricators in 2010. The production output of many
of these fabricators was not scheduled to come on line until 2012. Some industry analysts expected even more global firms to enter the LED supply chain and help alleviate
the bottleneck, improve productivity, and bring down costs.
Table 3: Global Dedicated LED Fabricators in 2010
Global Region
# of Fabricators
North America
Europe
China
22
Korea
Japan
11
Taiwan
36
Southeast Asia
Technologies
Digital signage powered with LED or LCD lights stood in contrast to the broad billboard and signage industry, where the level of technology development was low and
the preference of the industrys customers was for traditional billboard advertising at
much lower cost.46 Digital displays cost more and depreciated faster than traditional
billboards. IBISWorld reported that digital billboards need to be replaced about every
five years at an estimated cost of $250,000 per unit.47
49
50
North Carolina; Knoxville, Tennessee, and Denver, Colorado. Surely, since then, other
municipalities have followed.54 However, other studies, conducted in Cleveland,
OH and Rochester, NY, by the Outdoor Advertising Association of America, found
that not only was there no correlation between signs and accidents, traffic accidents
decreased by four percent within a half-mile radius of the signs.55
More positively, the industry made major contributions to enhancing the infrastructure of the nations transportation system. Local, state, and federal agencies were
the primary operators of the countrys transportation network. Highways, airports,
and local transit systems (bus, train, subway) all required signage and increasingly were
using digital messaging systems to alert passengers and drivers to changing conditions
(e.g., changes in schedule, lane closings, traffic conditions, and Amber alerts).56
Economic Outlook
The U.S. economy was predicted to show signs of recovery in 2010 as reflected in
Table 4. Economists anticipated that as disposable income rose, consumers would
spend more money on the goods and services which the industrys clients advertised.
As corporate profits rose, companies would allot more money to advertising and the
industry would return to growth. Although modest recovery was expected in 2010,
strong signs of improvement would not be seen until 2011, when the economic and
operating environment was forecasted to be more robust.
Overall, the billboard and sign manufacturing industry was projected to grow to
$13.3 billion by 2015, an average annualized rate of 2.9 percent. During the outlook
period (20102014), out-of-home advertising was forecasted to increase as a proportion of total media expenditure while traditional media (e.g., newspapers and television) continued to decline. The Internet and social media networks made it harder to
reach a mass audience, leaving outdoor advertising as one of the few ways to do so. An
increase in digital display advertising accounted for much of the revenue growth projected for the outlook period. Advancements in digital technology would make digital
displays more affordable and efficient, increasing their profitability.57 Following the
recession, expenditures from 20102015 for outdoor advertising were expected to grow
from $6.3 billion to $8.1 billion based on increased corporate profits, increased total
media expenditures, and overall performance as the economy recovered and consumer
sentiment improved. It was the fastest growing segment of the advertising industry.58
Table 4: Economic Factors Outlook for the U.S.: 2010 to 2014
Year
Percent
Growth
Index of
Consumer
Sentiment
Percent
Growth
2010
29,296
1.4
71.9
13.6
2011
30,087
2.7
80.5
12.0
2012
30,840
2.5
86.4
7.3
2013
31,611
2.5
86.9
0.6
2014
32,369
2.4
89.0
2.4
51
Trends that would drive domestic demand included the continuing replacement of
luminous and fluorescent signage with digital signage; the upgrading of stadium signage and scoreboards to better LED, LCD, or plasma technologies; and the increased
use of digital signage for messaging by business and many other types of organizations.
Profitability would continue to improve due to restraint of prices in supply markets,
increased margins associated with more technologically advanced products, and an
increased level of customization achievable with digital technologies that could deliver
higher-valued solutions to customers signage needs.59 (See Appendix A for a sample
rate sheet for the marketing of digital signage advertising.)
However, industry growth would continue to be hampered by government controls
on the number, location and content of outdoor displays. Increased demands from
environmental groups to reduce billboards on highways would continue to inhibit
growth. Furthermore, an increased proportion of clients marketing budgets targeted
toward such below-the-line advertising as promotions, trade shows, and sponsorships, would continue to drag on industry revenue growth.60, 61
There were challenges ahead. A survey of industry advertisers identified proof of
effectiveness as a primary concern, followed by the heavy capital investment to deploy
a network, and the industrys need for standardization to ensure hardware, software,
and network compatibility. Managing content across multiple networks, the need for
industry consolidation, and the integration of mobile devices and the Internet with
digital signs were also mentioned.62
Return on Investment. Over the next few years, the industry was expected to
experience increased demand by clients for more targeted and direct forms of advertising, and proof of impact. Demands for improved measurability would be met by
continuing technological advancements that generated above-average returns to advertisers. Digital displays offered the distinct advantage of being able to change constantly
throughout the day, allowing different demographics to be targeted for specific times.
Improvements in audience measurement would assist companies in market research
and allow companies to place advertisements at the right place and at the right time.
Better market research would help operators improve return on clients investments
by allowing advertisers to target more specific audiences. While earlier efforts had
developed models for measuring ROI for both sign owners and their advertisers,63 the
new era of digital signs would need to deliver customization of content at any level,
near-real-time diagnostics, and accurate proof-of-play reporting64 in order to prove
ROI for investors and advertisers.
Competitive Environment
By 2010, there were hundreds of firms that competed in the U.S. market but most
were minor, segment-specific competitors with sales less than $20 million. For 2010,
Table 5 lists major manufacturers across the industry indicating their locations and
size (revenue and profits) where available.
Appendices B and C provide a more detailed profile of each competitors market position based on the types of technology, market segments targeted, distribution
channels employed, and their customization capabilities.
52
HQ
Location
Website
2009 Net
Income
2009? Company
Revenues (USD)
USA
www.adaptivedisplays.com
52,000,000 *
ANC Sports
USA
www.ancsports.com
57,000,000 *
(86,000,000)
919,200,000 ***
BARCO
Belgium
www.barco.com
Capturion
USA
www.capturion.com
Daktronics, Inc.
USA
www.daktronics.com
26,428,000
581,900,000 *
Hibino Corp
Japan
www.hibino.co.jp/english
(3,253,853)
173,574,544 ***
USA
www.hitechled.com
30,000,000 **
Spain
www.imagoscreens.com
46,630,000 *
www.ledstar.com
4,600,000 *
Ledstar, Inc.
LG Corporation1
Lighthouse Technologies
Canada
Korea
www.LGsolutions.com
979,914,738
n/a
26,068,124,151 ***
59,260,000 *
(13,414,000)
233,800,000 ***
USA
www.lsi-idustries.com
Mitsubishi Electric1
Japan
www.mitusbishielectric.com
Nevco, Inc.
USA
www.nevco.com
10,800,000 *
USA
www.optec.com
12,400,000 *
6,732,540
172,970,994 ***
www.opto.com.tw
1,593,538,170
36,970,616,123 ***
Optotech Corporation
Taiwan
Panasonic Corporation1
Japan
www.panasonic.com
(3,822,637,589)
SignCoEDS (EDS)
USA
www.signcoeds.com
7,000,000 *
USA
www.skylineproducts.com
(15,434,000)
26,400,000 *
Sony Corporation1
Japan
www.sony.com
(998,002,744)
Telegra
Croatia
www.telegra-europe.com
Toshiba1
Japan
www.toshiba.com/led
Trans-Lux Corporation
USA
www.trans-lux.com
Watchfire Signs
USA
www.watchfiresigns.com
USA
www.yesco.com
P
(3,488,793,000)
(8,795,999)
78,331,857,247 ***
77,973,622,095 ***
60,220,000 *
67,125,141,220 ***
36,700,000 ***
10,800,000 *
13,148,000
1,032,000,000 ***
P = Privately held. Hoovers does not report net income for privately held companies.
Source: Table produced by authors from sources cited in the footnotes to the table.
53
Products
There were hundreds of products available in the DOOH market place, some of which
had many applications and others only a few. In some instances, a product design
varied little from company to company, and in others one company may have had a
product that was completely unique. One example of a design that varied very little
from company to company was a LED sign capable of displaying basic text or graphics,
which might have been seen outside of a McDonalds or Burger King. The sign itself
probably varied no more than the cheeseburger you would buy from either store; its
the same product with slightly different design variations. On the other hand, the giant
Mitsubishi video display at Dallas Cowboy Stadium and the Daktronics Coca-Cola
spectacular in Times Square, New York were completely unique, one-of-a-kind designs.
In fact, nearly every sign application received some design modification, and customers were able to demand this given the large number of products and companies
that were competing in the industry. End-users were looking to maximize ROI as they
sought increased revenues and sales, or tried to enhance the physical environment
of their venue. Increasingly, sign features like viewing angle, display brightness and
contrast, software and controllers, networking capabilities, number of LED diodes
used, or high definition capabilities, among others, were becoming more important as
technology advanced and became more affordable. Also, outdoor products had to be
designed to withstand harsh conditions including rain, snow, hail, ice, blowing winds,
sand, salt, sea air and debris, as well as extreme temperatures.
In addition to sign design and features, the quality and durability of the sign were
important. The quality of materials used should be in line with the prices, and the
warranty should reflect some indication of the products durability. Customers in the
DOOH market wanted a product that was durable, functional, and attractive, and
may have been willing to pay a higher price for one that lasted longer than a less expensive one that would need to be replaced in a short time.
Finally, economies of scope were important for companies in the industry. A diverse
product line enabled companies to serve several different market segments, and sell
multiple products to existing customers and attract new customers.
54
locations across multiple regions/countries may have had some advantages over a company that was attempting to operate out of a centralized location, and hence greater
growth potential.
However, company owned and operated sales and service offices were not the only
way to accomplish a vast sales and marketing network. Many of the companies in the
digital sign industry used dealer networks (resellers) to sell, service, and provide aftersale support. Some companies used both. In most cases, a dealer network was used
to sell and service standard commercial or retail signs, where there was not a lot, if
any, customized product designi.e., signs that could be produced in large numbers
through a standardized manufacturing process. This made it easier for manufacturers
to train the dealers on how to operate, sell, and service the signs.
National accounts were another important sales channel for companies in the
DOOH industry. National accounts included franchises and large companies with
multiple locations like Walgreens, McDonalds, Sonic, and WalMart. When a potential
customer chose to make a DOOH advertising network part of its business model, it
created an opportunity for an industry competitor to pick up a contract that included
supplying all of the DOOH signs for the organization. This type of large volume sale
could be very stabilizing to a company for years to come.
Distribution channels were vitally important in this industry. The ability to be in
direct contact with the end-user or decision maker allowed one company to set itself
apart from the next. In some instances, like with large venue video score board displays, the sales cycle could be extremely long and oftentimes a customer was dealing
with an integrator (e.g., architect or consultant). The ability to convince the integrator that your companys product was the best could lead to not only a sale today, but
future sales through them as well.
Reviewing the distribution channels puts into perspective why it was important
for a company to develop a sales and service network, whether it involved company
owned and operated branches or a dealer network. The capacity of a company to use
all distribution channels and disperse representatives across the prospective sales area
would ultimately increase the amount of face-to-face time with decision makers. This
was vital to these companies because only a handful of the companies competing in
the industry were recognizable multinational firms. Even industry leader Daktronics
was not a household name.
Reliable after-sale support and service was another benefit of a strong company
network of sales and service locations. This allowed a company to quickly respond to
maintenance and service inquiries. Given the fact that many of the customers would
not be able to service their own products due to the technology and engineering
involved, customers wanted some reassurance that their investment would be maintained and in good operation for the expected life of the product. For companies with
global offices, this would also give them an advantage as they were able to have their
own technicians provide after-sale service in the foreign country, eliminating the concern of who would maintain the customers investment.
Providing reliable after-sale support was one way to build a strong reputation in
the industry. With increasing levels of competition, companies had to find a way to
set themselves apart. Building a reputation for one or more aspects of the business was
vital. The number of products and companies available made it easy for customers to
find alternatives or create bidding wars. It was often the intangibles that set companies
apart. Companies in the DOOH marketplace often got their reputation from one or
55
Manufacturing
The strength of a company began with its engineering and manufacturing capabilities.
Companies in the DOOH industry had to not only be able to develop and engineer quality products, but also manufacture them extremely efficiently. The downward
price pressures in the industry left very little room for firms to operate without careful
management of the supply chain, manufacturing process, quality controls, and waste
reduction.
Many of the firms in the DOOH industry tried to be vertically integrated, relying
on as few input suppliers as possible. This helped control costs and eliminate the need
for large materials inventories. It ensured that when the company needed inputs, they
were able to get them, and were not waiting on suppliers or competing with other
companies looking for the same materials. Many firms were moving to lean manufacturing as a way to increase production efficiencies, decrease waste, and cut costs.
Ultimately this would make the entire industry more competitive, and put even more
downward pressure on prices.
Quality controls were another important aspect of the manufacturing process.
Large investments were needed to meet demanding customer requirements. Companies wanted to make sure they took every step necessary to produce a reliable, durable,
and quality product, which was what the customer expected to receive.
56
57
58
Company
Private
Si gnCoEDS
Skyl i ne
Products ,
I nc.
1
Sony
Corpora ti on
X
X
Median
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Source: Table produced by authors from company websites and company reports.
Rear Projection
X
Front Projection
X
X
X
X
X
Entertainment
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Mobile/Modular
Transportation
In/Outdoor Adv.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Application
Commercial
M itsubishi, Sony , Panasonic, LG and Toshiba had revenues that were much larger than other firms in the
X
X
Low
X
X
X
X
X
X
X
Other
Display Technology
LED Text
industry , much of which was earned p roducing p roducts other than digital signs.
Tos hi ba 1
Te l e gra
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
High
Custom Displays
Ne vco,
I nc.
Opte c
Di s pl a ys ,
I nc.
Optote ch
Corpora ti on
Pa na s oni c
Corpora ti on 1
X
X
Public
X
X
X
X
X
X
Standardized
X
X
Hi -Te ch
LED
Di s pl a ys
I ma go
Le ds ta r,
I nc.
Li ghthous e
Te chnol ogi e s
LG
El e ctroni cs 1
BARCO
Ca pturi on
Da ktroni cs ,
I nc.
2
Hi bi no
Corp
LED Video
LCD
59
Other
X
X
X
X
X
X
X
X
Resellers
Direct
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Distribution
Integrators
Key to Appendix B
Display Customization
Standardized (none): Products are manufactured to the same specifications in every production run.
Low Customization: Products are primarily manufactured to the same specifications across production runs with slight variations in product color, user content, or some other small variation that does
not change the basic function or operation of the display, nor the manufacturing process.
Moderate Customization: Company can manufacture products to customer specifications as far
as size, shape, color, and installation requirements are concerned. A company in this category may be
limited to the number of custom displays they can manufacture in any given year, limited in a manufacturing aspect like the display size or shape, or limited in the size of job they can complete.
High Customization: Company can manufacture or custom fabricate products to customer specifications of any kind, and are not limited in the number or size of custom jobs they can complete in a
year. The companies also do not have any type of manufacturing limitation when it comes to designing,
manufacturing, and assembling displays.
Display Technology
LED: Short for light-emitting diode, an LED is an electronic semiconductor that emits light when
electricity passes through it. LED lights are more efficient than other types of light sources and can be
used to make a variety of text, graphic, animations, and video displays, as well as other types of light
sources. LEDs can also be used to make ropes, floors, and wound to make any type of shapes.
LCD: Short for liquid crystal display, an LCD is a low power, flat screen device used to display text,
graphics, animations, and images.
Rear and Front Projection: A type of display that uses lenses and/or mirrors to project images on
a screen.
Other: DLP (Digital Light Processing) Technology, CRT technology, and Neon Lighting.
Application
Entertainment Venues: Large sports venues, small sports venues, amusement and theme parks, cinemas and theatres, fairs and expos, performing arts theatres, and casinos.
Commercial Indoor/Outdoor Advertising: Billboards, convenience and retail stores, financial,
medical, pharmacy, restaurants, gaming, hospitality, shopping, civic centers, convention centers, auto
dealers and worship.
Transportation: Airports and aviation, mass transit (bus and railways), roadways, fixed highway
signs, parking, and intelligent transportation systems.
Mobile and Modular: Concerts and staging, festivals and sporting events, auto shows, trade shows,
and award shows.
Other: Campus communications, control rooms, simulators, manufacturing, landmarks and
spectaculars.
Distribution Channels
Direct: Company direct, partners, and national accounts.
Resellers: Dealer networks, installation companies, and advertising and marketing companies.
Integrators: Consultants, architects, engineers, and project managers.
60
61
Ledstar, Inc., specialized in manufacturing LED text variable message signs (VMS)
for transportation applications since 1988. The VMS used on highways across North
America provided information to motorists. Ledstars products could be purchased
directly from the company.
LG Electronics, located in Korea, was established in 1958. Globally, it had 9.4
percent of the LCD TV market and 13.5 percent of the flat panel TV market in 2010.
It had leveraged its TV capabilitiesincluding high definition (HD) TVinto commercial products for the public venue market as well as many other market segments,
including healthcare, transportation, education, financial, retail, hospitality, quick service restaurants (QSR), food services, government, and small business.
Lighthouse Technologies offered a line of LED text and video displays for almost
any application. The company had sales offices around the world and was recognized
for its custom mobile and modular units, as well as some of its displays in large sports
venues. Lighthouse was known as one of the industrys leading companies for new
products and technologies. The company sold direct and through systems integrators
to customers.
LSI Industries entered the DOOH industry with its 2006 purchase of SACO
Technologies, Inc., of Montreal, which gave it the ability to produce large-format LED
displays. The company manufactured LED text and video displays and LCD displays
for nearly every application. LSI also had the ability to design and manufacture custom
displays and sold them direct and through integrators and resellers.
Mitsubishi Electric rated in 2009 as the worlds 215th largest company by Fortune
Global 500, manufactured standard and custom LED text and video displays, and a
variety of other products. It had sales locations around the globe and was capable of
manufacturing some of the largest custom LED video displays through its subsidiary
Mitsubishi Diamond Vision. The company sold its products through several distribution channels including direct and through partners, resellers, and system integrators.
Nevco, Inc., manufactured its first scoreboard in 1934, and had been considered
the largest private scoreboard manufacturer for some time until Daktronics displaced
it. Most recognized for its LED scoreboards. The first also manufactured LED text and
video displays. Nevco was capable of small custom scoreboard designs and sold directly
to end users and integrators mainly in North America, but also around the world.
Optec Display, Inc., in business since the late 1980s, primarily manufactured
standard outdoor LED text and video commercial advertising displays. It used manufacturing sites in the U.S., China, and Taiwan and had a 300+ dealer network that sold
its displays primarily in the U.S., with some global sales.
Optotech Corporation, established in 1983, manufactured both standard and
custom LED text and video displays for a variety of applications, its best known being
digital billboards. It also made LCD screens and other products. It had locations in
Taiwan and China, as well as sales locations throughout the world. To sell its products
Optotech used resellers and integrators, but also sold directly to the customer.
Panasonic Corporation, headquartered in Japan, was one of the largest electronic
product manufacturers in the world, comprised of over 634 companies. The company offered a wide range of digital signage solutions, from all-inclusive bundled solutions, to custom-designed enterprise networks. Panasonic provided hardware, software
installation and support for its customers.
62
63
Notes
1. Hendon, Donald W. and William F. Muhs, Origin and early development of
outdoor advertising in the United States. Journal of Advertising History, 9(1),
1986, 717.
2. Burma Shave signs dotted the landscape along the nations two-lane highways
from 1926 to 63, while the Bloch Brothers Tobacco Company of Wheeling,
W. Va., manufacturers of Mail Pouch Tobacco, began painting barns with their
roadside messages in 1890.
3. Lady Bird Johnson, wife of President Lyndon Baines Johnson, is largely recognized as the force behind passage of the 1966 Highway Beautification Act that
strongly regulated signage on Federal highways.
4. By 2000, Liquid crystal displays (LCD) replaced cathode ray tubes (CRT) in
television and other display screens and in small consumer electronicsvideo
players, clocks, watches, instrument panels, and small signsas they were more
energy efficient. However, as they had no power source, they had to be arrayed
in front of a light source (backlit). Light-emitting diodes (LED) supplanted
LCDs as they were an even more energy efficient light source, smaller, provided extraordinary color range, radiated little heat, and had extremely long
life, among many positive characteristics that made them highly flexible for use
in a very broad range of lighting applications, including outdoor and indoor
signage.
5. www.nsr.com, Global market and digital signage. May, 2008.
6. Credit Union Times, Before you buy, know how to kick the tires of a digital
signage system. November 4, 2009, v20, 144, p. 201(1).
7. IBISWorld, Industry Report, Billboard & Sign Manufacturing in the U.S.: 33995,
July 07 2008, p. 23.
8. Xinhua Economic News, Chinas outdoor digital display market to boost:
Analysys International. March 6, 2009, p. NA.
9. Wireless News, November 1, 2008, MultiMedia Intelligence: Digital signage
market growth continues as IP drives next generation advertising, p. NA.
10. Investment Weekly News. The research, Think Narrow, Win Large: Advertising,
Analytics, and Applications in Digital Signage discusses new trends in digital
signage as witnessed in 1Q2009. August 22, 2009, p. 454.
11. www.seesawnetworks.com, Global digital out-of-home media forecast 2008
2012, published by Northern Sky Research, Cambridge, MA 02138.
12. AsiaPulse News, Samsung enters Japans digital signage market, July 3, 2009,
p. NA.
13. www.digitalsignagetoday.com. Digital signage industry prognostications for
fall 2009. Ken Goldberg, September 29, 2009.
14. Ibid.
15. IBISWorld, Industry Report, Billboard & Outdoor Display Advertising in the U.S.:
54185, November, 2010.
16. www.seesawnetworks.com.
64
17. www.nsr.com, Global Digital Out of Home Media Forecast 20082012, published by Northern Sky Research, Cambridge, MA 02138.
18. www.nsr.com, Ibid.
19. NAICS Code 33995 (Billboard & Sign Manufacturing in the U.S.), SIC Code
3993 (Signs & Advertising Displays), and NAICS Code 54185 (Billboard &
Outdoor Display Advertising in the U.S.)
20. IBISWorld, Industry Report, 2008, p. 8.
21. Ibid., p. 10.
22. Wireless News, 2008, p. NA.
23. Ibid., p. NA.
24. Wireless News, November 2, 2009, Research and Markets Adds Report: Global
Digital Signage Market: 2008 Edition, p. NA.
25. Internet Wire, June 12, 2008. The study was commissioned from OTX by SeeSaw Networks, a company that offers extensive DOOH media.
26. Digital Signage Magazine, Landmark digital signage: Walgreens goes big to
stand out in the digital signage capitol of the worldTimes Square. February
2009 v5, i1, p. 14.
27. www.digitalsignagetoday.com, Digital signage: The top 10 trends for 2010,
Part 1 & 2, Keith Kelson, December 2930, 2009.
28. www.digitalsignagetoday.com, 5 great digital signage moments in 2009. Bill
Yackey, December 23, 2009.
29. www.digitalsignagetoday.com, Kelson.
30. Dwell time is a term for audiences that are captive and thus available for
exposure to advertising messaging for a longer duration. Examples are bus and
train riders, and passengers waiting in terminals and boarding lounges who
experience significant sit time.
31. www.digitalsignagetoday.com, Yackey.
32. www.digitalsignagetoday.com, Kelson.
33. Digital signage magazine, Flat is the new up? Think again . . ., February 2009,
v5, i1, p. 5.
34. IBISWorld, Industry Report, Billboard & Outdoor Display Advertising in the U.S.:
54185, December 29, 2009, p. 30.
35. www.digitalsignageexpo.net, Platt Retail Institute announces quarterly digital
signage industry index, November 17, 2009.
36. IBISWorld, Industry Report, 54185, 2009, 20.
37. www.digitalsignagetoday.com, Kelson.
38. www.digitalsignageexpo.net/DigitalSignageExpo/ExhibitorsList.aspx.
Lists
2010 Exhibitors as of January 5, 2010.
39. www.digitalsignagetoday.com, Kelson.
40. Sound and Video Contractor (Online Exclusive), April 22, 2008, p. NA.
41. GlobeNewswire, Wireless Ronin completes digital signage installation at home
of NHLs Minnesota Wild, November 4, 2009.
42. www.digitalsignagetoday.com, Kelson.
65
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
www.digitalsignagetoday.com, Goldberg.
Ibid.
www.semi.org/en/IndustrySegments/LED/ctr035763.
IBISWorld, Industry Report, 33995, 2008.
IBISWorld, Industry Report, 54185, , 2010, p. 20.
Ibid.
Ibid.
Investment Weekly News 2009, p 454.
IBISWorld, Industry Report, 33995, 2008, p.1920.
Nichols, Christopher L., Billboard Sign Regulation: Recent Cases and Trends.
Paper presented to the Texas City Attorneys Association, June, 2011, South
Padre Island, Tx.
For updated information, visit the website of Scenic America. www.scenic.org/
billboards/digital.
Planning, Sign World: What other nations can teach us about sign control,
Jeff Soule, FAICP. July, 2010.
www.americancityandcounty.com, Dim your sign, please: Cities adjust ordinances to regulate digital billboards, Peter Barnes, August, 2009, p. 19.
http://www.amberalert.gov/about.htm. The AMBER Alert System began in
1996 when Dallas-Fort Worth broadcasters teamed with local police to develop
an early warning system to help find abducted children. AMBER stands for
Americas Missing: Broadcast Emergency Response.
IBISWorld, 54185, 2009, p. 35.
Ibid.
IBISWorld, Industry Report, Billboard & Sign Manufacturing in the U.S.: 33995,
August 2010, p. 5.
IBISWorld, 54185, 2009, p. 3637.
Below-the-line advertising referred to advertising by means other than the five
major media (newspapers, magazines, television, radio, and outdoor).
North American Digital Signage Index (2009), Vol. 1, Issue 1, pps. 1820.
Platt Retail Institute.
www.nsr.com.
Sound & Video Contractor (Online Exclusive). Expert viewpoint: Digital signage trends, June 2, 2009, p. NA.
Based on presentation by Chairman of the Board, Daktronics Corporation,
Annual Shareholders Meeting, August, 2009, Brookings, South Dakota.
66