5 Reasons To Think Differently About Digital Signage

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The past 12 months have been noteworthy for the big names. Microsoft launched Windows 7. Intel launched Nehalem for servers. Oracle launched a bid for Sun Microsystems and its lineup of technology. So you can be forgiven for not seeing the quiet revolution that has taken place in the digital signage space. The revolution has hardware, software and networking components. But, more importantly, it's finally starting to show the growth and profit potential that, for so long, have been so elusive.

According to market-research firm DisplaySearch, the third quarter of 2009 saw 19 percent year-over-year growth in the LCD-based digital signage segment. It also measured a whopping 41 percent quarter-over-quarter growth rate from the second quarter to the third quarter last year -- an indication that the segment began taking off like a rocket with the addition of new technology, trends toward more ubiquitous advertising and messaging and an economy that was starting to come around after a year in the tank.

NEC-Vukunet/MultiSync P461

NEC has undergone a number of corporate and channel program changes over the past several years, but it has continued to deliver technically sound, sturdy and at times visionary display technology to the market. And so the company is taking its solid technology offerings and giving VARs an opportunity to enter a new revenue opportunity: digital signage advertising. NEC has created Vukunet, a sort of "super network" of advertising content. The idea behind Vukunet is that it will bring together hundreds or thousands of public display networks. On one end of Vukunet, the company will bring in advertisers that will have access to signage opportunities in a variety of enterprises.

On the other end are enterprises ranging from casinos to convenience stores and post offices. In between, NEC has established a program for its VARs to deliver a signage solution for those enterprises that will earn the enterprise advertising revenue, earn the VAR advertising revenue, and provide advertisers with new reach for their message. Vukunet is hardware- and software-agnostic; it has been designed to work on other vendors' digital signage technology in addition to NEC's.

While this is a relatively new program and channel for NEC, company channel executives told CRNtech that they project a new digital signage network solution, installed on site at an enterprise, could reach a $300,000 investment. For the VAR, that could lead to a margin of between 13 percent and 15 percent -- or $40,000 to $50,000. The same VAR, having sold a Vukunet advertising package, could make an additional $60,000 per year -- for as long as the enterprise continues to run that advertising. By adding that amount of margin into a digital signage solution, in addition to revenue for the VAR's customer, the economics suddenly change. This business model has significant potential to change the entire landscape of digital signage. Suddenly, cloud-based ad content makes a VAR's investment in technical and marketing proficiency less burdensome, and provides a stronger return-on-investment case to enterprises that have been on the fence about deploying such a solution.

But, for VARs, this scenario works better if the technology and products exist to build on an existing IT relationship. And that's where NEC's longer heritage as a display manufacturer fits in nicely. Of NEC's recent signage products, the CRNTest Center has looked at the company's MultiSync P461, which is list-priced at $1,990. Coming in at 46 inches, the product is not a toy. (A warning on the back of the display advises caution with its lamps, due to mercury content. However, NEC adds a carbon footprint meter -- designed to promote energy efficiency -- that provides an argument for eco-friendliness.) Network-ready with Ethernet connectivity and communication support, the P461 is a strong option for single-display signage solutions that can access content from the cloud and provide remote management capability.

The bottom line: NEC has been working to alter the model and capabilities for VARs that deliver digital signage solutions, and with Vukunet and the MultiSync P461, it does just that.

NEXT: Samsung Ultra-Definition Display System and Open Source

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