This is such an odd little sector.
By the count of Bill Gerba and his company Wirespring, there are some 330 firms out there peddling some form of Digital Signage software platform.
Let’s be conservative and say each of those platforms has at least 20 clients. That’s more than 6,500 networks that are running anywhere from one to 1,000s of players.
Let’s say each of those networks needs three new pieces of creative content a month (it may and should be much higher). That means almost 20,000 piece of creative a month to produce.
So who is doing it?
We have a whole industry endlessly recycling or repackaging the phrase Content is King, and I’d suggest there is not a single dominant content shop in the entire digital signage marketplace that could with a straight face declare itself the Content King.
Yes, there are good companies out there. Some are friends. Some are clients. But they are relatively small players on a broad landscape. There is no company that really stands out as THE guys. The company that’s doing the most business. The one that is usually top of mind when clients ask.
I asked Keith Kelsen, who has written a book about content, when I saw him in Las Vegas at The Trade Show Formerly Known as Kioskcom. He threrw a company name at me. I said, “No way.” Good company. but no way are they dominant.
I’m not entirely sure why no one company has stepped up and grabbed significant market share, but I think there are a few reasons:
1 – Existing production houses that have gone into this line of work are accustomed to charging serious studio rates for broadcast and interactive customers. With studio rates usually well above $125/hour and even simple spots quoted at $1,000-plus, these are numbers that make start-ups and existing businesses weak at the knees. Business overhead and company cultures that foster excellence drives those kinds of figures, as does the knowledge that those numbers are well below the $1K per second rule of thumb of major creative agencies. I know a retailer that has a nice – not great – but nice network in hundreds of stores, but it only changed out a piece of content once a month, because its agency – and only a small regional one at that – costs were too crippling to allow more than that.
2 – The big agencies aren’t interested in this space, at least yet, because the risks outstrip the rewards. The medium and audience are moving targets. There are no real standards. Budgets are a fraction of what they are for easier (as in there are standards to apply) TV work. Depending on who you listen to, it;’s also argued many agencies haven’t really crossed the digital divide to interactive, web-based work, never still emerging stuff like DOOH.
Curiously, there is far more supply than demand in the mainstream and digital agency sector and calls for consolidation.
3 – There are plenty of very good freelancers who don’t have any of that overhead or baggage, and can charge way less, but they are generally lone wolves. They are the “I know a guy who does that stuff” guys who get their work from their contact networks. They don’t market themselves. so they never really develop an industry profile.
4 – Some “solutions providers” are baking entry-level creative work into their offers, using in-house hires or their “guys” they’ve developed in a virtual go-to network. That services the entry-level, not-much-more-than-a-juiced-up-poster market, but that stuff has more to do with manufacturing messages than generating creative work. A lot of the software guys have templates that can be used to crank that stuff out – but the pieces, while polished enough, are templates. They do part of the job, but not all of it.
5 – Nobody, as far as I can tell, has meaningfully claimed the middle ground in price and capability between the cheap entry-level stuff and the high-end work that is often great, but in practical terms, unworkable in operating budgets.
As consultants, we try to get our clients heads around the idea that creative work needs to be engaging, and there needs to be enough of it to sync up with the amount of time viewers are in the presence of the screens. It also has to be refreshed regularly so it doesn’t go stale in the minds of viewers. Makes perfect sense. But then somebody runs the numbers on the anticipated creative invoices and comes up with a monthly production cost total that causes a severe case of Restless Leg Syndrome for the company CFO.
We also have end-users in this industry who either don’t have the experience to know good creative when they see it, or do know what it looks like, but expect Veuve Clicquot quality at Milwaukee’s Best prices.
Maybe it’s out there, and I just don’t know (and I assume there will be comments from companies who say they are the answer), but whoever decides to go hard at it has to pretty much forget about the norms.
An industry friend sent me a note recentlyt with a link to a piece about the collapse of complex business models, and he related that to production challenges in this industry. This is the post: http://www.shirky.com/weblog/2010/04/the-collapse-of-complex-business-models/
This is a very different industry from mainstream media and a lot of the old rules and ways don’t apply. It’s likely true that gaining serious market share in creative production means forgetting how things have always worked with hours and pricing, and then stripping out costs, creating new efficiencies, and delivering polished work and professional processes at rates that network operators can really afford.
I know there have been business model stabs at creating a “content factory” and there are people and companies promoting work being done offshore, as in China. The samples I have seen have so far have suggested that ain’t the answer (though in the right hands, it could be part of it).
There’s a big market waiting for the company that puts the message, infrastructure and processes together to seize the market.
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for more than 13 years. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He’s based near Halifax, Nova Scotia.