By Chris Mcintyre-Brown, Associate Director of Displays & Broadcast Equipment, Futuresource Consulting
Futuresource Consulting recently published its latest round of corporate market research, providing insight and commentary into the evolving purchasing and use models of AV solutions in corporate environments. The study is based on feedback from 500 organizations across Western Europe and the U.S., and accesses trends in both the adoption of digital signage solutions in corporate office spaces and the changing requirements for AV solutions in the meeting room.
The corporate vertical continues to show a strong propensity for growth in the adoption of digital signage at a time where the wider market is beginning to show signs of maturity (in some segments) and emerging territories are posting declines in the face of worsening economic conditions. The corporate market offers a large addressable audience, existing communications infrastructure, which signage solutions can leverage, and the growing desire of companies to communicate with employees and partners in increasingly diverse ways.
Annual volume growth for commercial large-format display product (excluding video wall and interactive whiteboard product) reached just 6 percent globally in 2015, down from 10 percent the year before and 20 percent in 2013. Large chained installs in sectors like automotive, QSR and retail banking continue to prop up rising volumes in larger Western markets, but a growth ceiling is becoming an increasing concern for suppliers as penetration in these early adopter verticals rises.
Over 30 percent of organizations surveyed in our latest round of research are using screens outside of meeting spaces for the purpose of digital signage. Large organizations with head counts of more than 500 show the highest rates of adoption, but it's the SME market, below the top tier of enterprise, that provides the largest addressable opportunity in terms of scale. Requirements in this sector are typically heavily cost driven, often based on small networks running template-driven signage, with the potential to overlay signage content on existing screens used to deliver broadcast content.
From a supply side perspective, the last few years have seen increasing diversification of solutions as vendors seek to align products to individual verticals, opening new customer bases. A key facet of this strategy has been the rising availability and declining cost of lower-end solutions designed to service small network environments like those seen in SME office spaces. The rising penetration of SoC solutions in screen hardware, the decreasing cost of low-end media players and the increasing availability of template-based content management solutions have made digital signage more accessible to corporate customers. Penetration in the segment is rising, and this positive trend is highlighted by our survey, with 14 percent of companies that do not currently operate digital signage in office spaces expecting to do so during the next two years.
A primary driver for the adoption and expansion of digital signage networks in the corporate space is the increasing influence of IT managers and IT integrators on AV purchase decisions. This trend is happening at a time when the AV signal distribution market is making its first significant inroads into replacing conventional matrix switching products with IP-based solutions. Residing on a company's central network, these video distribution platforms sit alongside other network based communications tools, providing IT and communications managers with opportunities to create increasingly centralized and integrated solutions.
IP solutions account for a small proportion of the AV matrix switching market at present (less than 5 percent), but the cost of these solutions is falling as the cost of Ethernet switches comes down and video compression standards improve. These solutions can offer numerous benefits and significant cost saving potential for larger networks spread across corporate campuses.
Perhaps most importantly for the signage market is the flexibility these solutions offer. Any screen in any location can receive any video stream on the network, and adding additional screens is as simple as adding an additional Ethernet switch to existing infrastructure. Over 50 percent of companies we surveyed that currently use digital signage in their offices expect to expand that network within the next two years. The future adoption of IP-based video switching solutions will aid network expansion and help maximize the utility of signage installs in office spaces.
Chris Mcintyre-Brown has worked across the entire Futuresource portfolio, spanning the content and broadcast industries along with a myriad of consumer electronics devices. He is mainly focused on the global B2B displays industry, providing insight into channel and vertical dynamics with digital signage, education and corporate IT areas of specialism.