Digital signage
Global shipments of digital signs for public display applications were estimated to grow by 9.3 per cent in 2016, with associated revenue increasing by 15.3 per cent, according to IHS. The firm predicted approximately three million units would ship throughout the year and revenue would climb to $9.7 billion U.S., thanks to an increase in the average selling price (ASP) of a public digital display from $1,826 U.S. in 2015 to $1,926 U.S. in 2016.
Shipments of premium ‘4K’ ultra-high-definition (UHD) liquid crystal displays (LCDs), for example, are expected to increase market share from 1.4 per cent in 2015 to 12.1 per cent in 2020.
As for screen size, IHS reports 1.4-m (55-in.) LCDs comprised 18.4 per cent of the market in 2015 and should reach 28 per cent in 2017, but then decline to 21 per cent in 2020. Meanwhile, 1.8-m (70-in.) LCDs will grow from 3.9 per cent in 2015 to 8.9 per cent in 2020, while the 1.8 to 2-m (70 to 79-in.) category will increase from 2.6 per cent in 2013 to 11.8 per cent in 2020.
With LED-based displays, strong increases in unit shipment numbers have been accompanied by declines in prices, hampering revenue growth. In 2016, IHS reports, prices shrank by 26 per cent compared to 2015, while shipments rose by 27.5 per cent, resulting in only a slight bump of 4.9 per cent for revenue.
Interactive video walls continue to be integrated into retail environments.
Photo courtesy Sport Chek
Outdoor and retail installations, where the benefits of LEDs’ high brightness and durability compared to LCDs are particularly clear, represent nearly 40 per cent of total market share. IHS expects this share to drop to 35 per cent by 2020, however, as the current 63 per cent year-over-year growth for outdoor displays is outweighed by 98 per cent growth for indoor installations in public spaces, control rooms and other venues.
The shift indoors is another reason pixel pitches are becoming finer. While outdoor displays commonly feature a 5 to 10-mm (0.2 to 0.4-in.) pitch, increasing numbers of indoor (and outdoor) displays are in the 2 to 5-mm (0.08 to 0.2-in.) range.
Pixel pitch measures the distance between the centres of each cluster of red, green and blue (RGB) LEDs within a display. The shorter the distance, the higher the resolution of the screen and, hence, the closer the viable viewing distances. It is these shorter viewing distances that have allowed LED-based video walls to move from outdoors to indoors, where their lack of bezels (i.e. edges of panels within a video wall) makes for a more seamless appearance than can be accomplished with LCDs.
In 2017, even though prices will continue to decline, revenue momentum is expected to pick up as shipments shift to finer pixel-pitch categories and, for that matter, these LED displays begin to replace LCDs and other large-format digital display technologies.
The two fastest-growing categories of LED displays, according to IHS, have been those with a pixel pitch of less than 2 mm (0.08 in.), which saw a 366 per cent increase in 2015 over 2014, and those between 2 and 5 mm, which grew by 129 per cent. They were forecast to grow by a further 84.8 and 77.1 per cent, respectively, in 2016 over 2015.
Given the size limitations of current LED packaging, IHS expects the rate of technological advancement with finer pixel pitches will slow significantly in the short term. And the price difference represented by a pixel pitch under 1 mm (0.04 in.) and those between 1.2 and 1.9 mm (0.05 and 0.07 in.) is almost a factor of two, so it is generally cost-prohibitive to build a large-scale video wall using the very narrowest pixel pitch LEDs.
The achievable pixel pitch for LED-based video walls has become ever finer.
Photo courtesy Leyard
For these reasons, some markets—including education, hospitality and health care—remain elusive for LED displays, as lower budgets have restricted them from moving on from LCDs or front-projection systems. Indeed, technological diversification has been a key factor behind the widespread adoption of digital signage, as an increasing number of organizations find it affordable in one fashion or another.
Video walls, for example, are experiencing double-digit growth in global sales, according to Futuresource Consulting, as well-established products like super-narrow-bezel (SNB) LCDs and rear-projection ‘cubes’ (RPCs) for tiled displays are joined by emerging, disruptive technologies like narrow-pixel-pitch (NPP) LED arrays. Both RPCs and SNB LCDs are expected to gain further market share in control room applications, where near-zero bezels are highly desirable, while NPP LED video walls are enjoying success in the corporate, exhibition and broadcasting sectors.
And while fine-pixel-pitch LED displays tend to cost at least three times more than LCDs or Digital Light Processing (DLP) projection, Transparency Market Research predicts continued research and development (R&D) and growing competition will bring prices down in the coming years. The company expects the worldwide fine-pixel-pitch LED display market will grow from $677 U.S. in 2015 to $3.1 billion U.S. by 2024, representing a CAGR of 15.8 per cent.
At the other end of the market, meanwhile, commercial-grade LCDs are seeing competition from consumer-grade TVs.
“As technology improves and prices fall, more users will risk buying consumer TVs for use in commercial environments,” says Sanju Khatri, director of digital signage for IHS. “Businesses that do not need to display sophisticated content may find they perform well enough for their purposes. We expect this trend to increase in the future.”
So, either way, digital signage in general is on the rise, which may pose a threat to the market for printed graphics and other ‘static’ signage.
“Digital signage will displace a portion of static signage in certain environments, such as stadiums, restaurants, airports and hospitals,” says FastSigns’ Monson. “This is why staying on top of digital signage trends is more critically important than ever to those of us in the sign and graphics industry.”
The monthly revenue opportunity for digital signage in all types of venues across North America, according to a recent report compiled by Charlottetown-based software developer ScreenScape Networks, is just over $300 million U.S. To quantify the size of the market, ScreenScape started with the number of locations within a particular geographic zone. Every business with a physical venue, after all, is part of an overall addressable market for digital signage.
Audience recall for DOOH ads is particularly high in major cities.
Photo courtesy Astral Out-of-Home
Based on government data, including information from Statistics Canada, the Retail Council of Canada (RCC) and the U.S. Census Bureau, ScreenScape estimated there are 190,100 retail establishments within Canada and just over a million in the U.S., for a total of around 1.2 million. Next, for the average revenue represented by each venue, ScreenScape estimated a monthly subscription fee of $40 U.S. This suggests a North American retail revenue opportunity of just over $50 million U.S. per month.
There are many additional venues well- suited for digital signage, as mentioned, including hospitals, clinics, universities, fitness centres, hotels and golf courses. As a rule of thumb and based on government data, ScreenScape points out, there are five such public establishments for every one retail store. Hence, the overall revenue opportunity is six times that of retail stores alone, for a total just greater than $300 million per month.
The company notes not all public-facing venues will necessarily feature digital signage, but these are compensated for by other venues that represent a greater revenue opportunity because they host many digital signs, rather than just one each.
“The broader, longer-term market opportunity is actually much bigger,” says ScreenScape founder and CEO Mark Hemphill. “The first phase is building out the infrastructure of digital signage through the sale of software and hardware, which is what our report focuses on, but a secondary opportunity exists in the metered flow of content and in the growth of digital out-of-home (DOOH) advertising.”
