Specialized screen manufacturers in the digital signage industry are facing a formidable challenge from less expensive, consumer-grade TV panels, according to a new report from market research firm IHS Technology.
IHS suggests the global signage and professional displays market—including monitors and TVs installed in hotels, transportation hubs and other public venues—will continue to see relatively flat revenues this year, unless the industry can change some of its current dynamics. Overall revenue in 2014 is forecast to reach $13.76 billion, down from the 2012 total of $14 billion and up slightly from $13.58 billion in 2013. More significantly, no revenue projections from 2015 to 2018 exceed this year’s figure (see Table 1), despite a steady rise in screen shipments.
“The future for display vendors is going to be challenging,” says Sanju Khatri, IHS’s director of digital signage and professional video. “The industry faces tough competition as commercial establishments use ordinary consumer TVs as replacements for specially outfitted digital signage displays.”
Educating buyers is paramount, Khatri says, since conventional TVs are not equivalent to the large-format liquid crystal display (LCD) panels designed for commercial signage use. Commercial-grade panels are built for longer wear, enclosed in metal chassis for improved heat dissipation and outfitted with special backlighting modules to ensure image clarity even under vivid ambient lighting. Some are also loaded with media players, sensors, touch interface modules and digital signage software.
Consumer TVs, on the other hand, are not designed for 24-7 use and will wear out much more quickly. They also cannot be joined together relatively seamlessly to form video walls.
So, despite the sobering market forecast, digital signage panel manufacturers can capitalize on premium features like high brightness, ultra-narrow bezels, interactivity and ultra-high-definition (UHD) resolution. The retail industry, by way of example, understands the value of digital signage and continues to represent a sizable market opportunity.
To further distance their products from conventional TVs, IHS says display manufacturers could team up with other hardware and software vendors to provide ‘all-in-one’ units capable of handling multiple sources of content, integrating with mobile communications and analyzing data.
“Digital signage may still be able to turn things around,” says Khatri.
