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I was very happy to see that AMX released a digital signage TCO calculator, and even happier to see that it was a collaboration with industry guru Lyle Bunn (which to me hands this a lot of credibility, signaling it’s not strictly a marketing tool). It is also the first of its kind in the digital signage space – industries like telecom are used to vendors using proprietary TCO calculators to allow buyers to compare their solutions to others. But in the digital signage space, the closest we have come to this is Bill Gerba’s annual article on budgeting for digital signage on his WireSpring blog.

I’ll start with the benefits of AMX’s tool. I’ve taken a spin through the tool, and found that is very simple to use and a great place to start if you’re considering a project. The setup allows a user to compare two solutions based on a fixed number of criteria. The output is data that let the user know which of the two options will be most cost effective over a selected amount of time. This tool does particularly well in determining the amount of power consumption the media players will require over a set amount of time based on the state the network is located in. It even determines the CO2 emissions footprint for the players.

On the downside, I think many looking to determined the true total cost of ownership for a network will find it a bit too simple. The tool is limited to calculating TCO only for the products offered by AMX, that being media players and content management software. There are still many pieces of the puzzle that are missing here that would greatly help anyone looking at building a complete network from the ground up.
Here are several factors I believe are missing from the tool:

1. Screens

Ah, the most noticeable piece of the digital signage network puzzle. Buyers have the option of choosing various price and performance levels of either commercial or consumer grade screens in various sizes, resolutions and refresh rates. When considering TCO for screen hardware, think about a.) What type of content you’ll be running on the screen. High-motion video will require a higher Hz rate, and plasma may be a good option b.) Power consumption. Plasma uses more power than LCD which uses more power than LED. c.) Quality. The rule of thumb is to go with commercial grade screens, although I’ve seen many installs use consumer grade screens if there is infrequent use of the network (arenas, etc.).

2. Cabling

The cost of running hundreds of feet of CAT6 cable can add up when you consider TCO for networks in larger venues, such as big box retail stores, convention centers and arenas. Other forms of connectivity such as Wi-Fi and cellular are also options, but they often come with a monthly reoccurring cost associated with them.

3. Connectivity Hardware

One of the more overlooked pieces of the digital signage puzzle, connectivity hardware helps extend the range of cabling when sending content over long distances. Venues such as airports and convention centers use extenders and switches to keep content at optimum quality even when sent over distances up to 2,000 feet. Wi-Fi transmitters also fall under this category. You’ll most likely need some of these components, especially if your network is in a large venue.

4. Router hardware

In many cases with networks in dispersed locations, content is sent over a WAN or public internet. You’ll most likely need a router at each location to sit in between the network and the PC or media player that you operate your content management system on.

5. Control equipment

Those PCs can also be factored into the TCO of a signage network. Although it doesn’t take a high powered computer to run a content management system (with SaaS, you only need internet access), you’ll still need some kind of interface in order to do scheduling and some design. Depending on the types of content you’re using, you’ll need a higher powered video card to support it.

6. Content

There’s a reason content is often times one of the most difficult parts of operating a network. Aside from keeping it fresh and creative, it also costs a lot of money – whether the costs come from outsourcing content design or the manhours it takes to design content in-house. [Stay tuned as my next article talks about inexpensive ways to get good content.]

What else is missing here? What other costs have you seen that factor into the total cost of ownership for a digital signage network? Please comment below:

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User Comments – Give us your opinion!
  • Scott Sharon
    Great article Bill. I also checked out the AMX tool and I've heard several comments about it. I commend them for providing it and it's certainly a step in the right direction but I found it too incomplete for my needs. As an example, when I am asked by by a QSR chain to help them determine their ROI on a digital system, the important numbers to them are "What does it cost compared to the cost of my current system?"

    I take the total cost of the current system and the total cost of the new digital system. That means everything for both. Cost of all equipment required, software, content, power, operation. installation, maintenance, internet connection and factor the cost over a 5-10 year time period.

    If the new system costs more (it usually does) I can give them an accurate ROI number based on expected sales and profit gains or I can tell them how much gain they need to pay for it in a specific number of years. If you leave anything at all out they will not trust the numbers and they should not.
  • Peter Kaszycki
    This is a great start however I have seen that on-site service costs can be a major factor that many customers overlook; especially with outdoor displays. How easy / quick is it to repair / replace a digital display and how "modular" is the display so it does not need to be removed from its mounting location? Downtime and / or disruption to the business needs to be considered.

    The lifecycle of the display also needs to be factored in. Yes, the content looks great on day one but how does the display look in 3 years? When does it need to be replaced? Certain digital displays are designed to operate, at full performance, for longer periods of time which contributes to a positive TCO.

    Another factor that is normally overlooked is the duty cycle. Are these displays running 8 hours a day, 18 hours a day or non-stop? Most commercial grade displays are not suitable for this duty cycle while professional / public displays are designed for more robust operation.

  • C S Gallagher
    What's missing is the paycheck for the software developer that would do all the research and build a valuable tool for others to make money for themselves.

    Furthermore, this type of app should run on a tablet best developed IMO using the Silverlight Analytical Framework. I take PayPal :-)
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