Blog Post from May 27, 2016

Read this first before buying digital signage from your traditional vendor

Not so long ago digital signage displays were reserved for deep-pocketed high-end entertainment establishments, or national retail chain outlets. Now you see great-looking digital signage at any local store or fast-casual restaurant, even if it is just to show a static digital menu board.

What once required expensive proprietary media player hardware can now be generated from a low-cost media player device.

Traditional signage companies, mostly with a hardware OEM background, struggle to command price premiums for their expensive media server hardware and support contracts. Why would you pay over a thousand dollars for a rack-mountable media player if you can use a much less expensive device, maybe even a stick that plugs right into the HDMI port of your display, and that pulls its content from the cloud?

The usual line of defense is the link between software services and hardware: “our media servers are guaranteed to have the horse power to display complex signage smoothly, with no freeze-frame”, or the promotion of their proprietary content generation software: “we have a proprietary content generation system that can render beautiful signage and it runs optimally on our displays”. Well, not so fast…

First, from a hardware perspective, mobile hardware has become so powerful in its graphics capabilities that in many cases it just exceeds what can be done with this proprietary ‘high-end’ hardware. We now see the first mobile phones that can render 4K Ultra-HDTV, they have a graphics and video rendering engine that surpasses the capabilities of these ‘professional’ media players. The reason is clear: it’s all about economies of scale.
Having worked for 15+ years in the chip sector, the real cost of transistors on a silicon chip depends of course on the size of the chip, but generally it depends more on the R&D cost and the number of sales units that the R&D cost can be amortized over.
In the semiconductor sector, if you don’t sell 10s of millions of a chip per year, your R&D cost for the chip (tens of millions for a single complex digital chip as a video rendering processor) becomes the dominant factor.
A digital signage OEM will sell 1000s, not 10s of millions, of units. Even if multiple companies use the same chip, it’s still several orders of magnitude less than what the suppliers to the mobile phone companies can sell into the handset market, or what Apple & Samsung sell themselves (as they make their own application-processor chips that include the video rendering engine).

Secondly, content generation is becoming more ‘democratized’ as well and actually decoupled from the hardware.
The advent of HTML5 (the latest version of the web-content standard), coupled with CSS3 (the latest version of the style generation language that is used by the HTML markup language in web browsers to control how elements are displayed) spelled the end of proprietary systems such as Flash (from Adobe), and Silverlight (from Microsoft). As a result not only is HTML5/CSS3 now used for the desktop web and mobile web, but also for generating digital signage for large screens. It has all the capabilities to generate great-looking dynamic signage: 2D & 3D animation with support for keyframes, embedded video & audio, and efficient drawing on a ‘canvas’ that ties directly into the underlying graphics hardware via a hardware abstraction layer.

"But it must be very difficult to generate all this so you need an expensive software package, right?" Well, maybe not…

Since HTML5/CSS3 is the ‘language of the web’, there are several software tools out there that make content generation very easy. For instance, Google launched the free ‘Google Web Designer’ a few years ago which providers a drag-and-drop user interface to generate HTML5/CSS content. While originally developed to design web banner ads and support Google’s revenue stream via its own ad networks, you can now also use it to generate generic HTML5/CSS3 pages that are ‘mobile responsive’ meaning that web browsers will render the pages well on different screen sizes, whether it is on a mobile browser on a phone, on a monitor connected to a desktop display, or on a full-HD digital signage screen.
Several plug-ins and design templates are available to create complex signage rather easily, without writing a single line of code.

"So what is truly innovative then in digital signage? Where lies the true differentiation if it’s not in the hardware or content generation anymore?"

The answer is: make your signage more relevant by adapting it to a context.
The context could be the time of day, the day of the week or environmental factors such as weather conditions (so you show information about raincoats in a store when the weather forecast calls for it).
That’s still relatively easy since it’s still on a macro-level.
More interesting is to change content based on the interests of who is at your location now, and even based on their position inside your location. That can make your signage relevant to individuals who are within the viewing range of each of your screens now. Your signage becomes informational to them, and is not perceived as just another ad.

That is the realm of truly personalized digital signage and it’s the cornerstone of what we do with our software subscription service here at Sophatar. We provide a context-adaptive digital signage solution that uses standard hardware (iPads or AppleTVs) that you connect to standard digital displays, for all the reasons explained above…

There’s a lot you can do with such a platform that can immediately increase your bottom line if you have a business. Our next post (next week) will discuss an example for the food retail industry. Until then!

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