News
Subscription-based services present an affordable alternative
More companies are leasing digital signage software as well as hardware.
October 7, 2007
Views and opinions in this white paper are those of the author and 42 Media.
With the ability to boost sales by up to 30 percent, digital signage continues to emerge as a powerful sales and marketing tool. However, the high costs of ownership continue to present a challenge for businesses wanting to adopt this technology. Even today, while the price of digital signage hardware and software itself has gone down, the ongoing maintenance required makes it very expensive. Not only does digital signage technology require IT expertise to maintain, it also requires ongoing creative, production and editing experience to keep the content fresh and timely.
Let's take a closer look at how the costs breakdown. Below is an overview of total digital signage ownership costs, on average:
Software $23,500 Hardware $35,000 (includes 10 screens) Annual upgrades/licensing fees $4,658 (20 percent of initial software cost) Training and certification $2,500 per person x 2 Maintenance/IT support $60,000/year x 2 (average IT salary) |
It generally requires two IT personnel to maintain the digital signage: one IT specialist to install/maintain the hardware and software, and a creative production/marketing professional to manage/update the messages and content loops being displayed on the screen.
TOTAL APPROXIMATE ANNUAL OWNERSHIP COSTS: |
Year One: $184,000 After First Year: $125,000 |
While your company may not be bothered by the fixed cost of hardware and software, you probably don't have two employees with the necessary skills and time to manage even a small 10 player network. You could add staff, but is that the best move? Will managing this network be enough to keep two specialized employees at work? What if you could avoid the human part of the equation entirely?
A different approach: subscription-based services Rather than owning digital signage hardware and software outright and staffing a full-time IT and video production/editing team to maintain the content, more and more businesses are turning to subscription-based services instead.
Subscription-based services enable companies with a set budget to lease the digital signage technology and expertise for an affordable monthly fee, including the ability to update changing content and messages on demand.
While a relatively new concept, subscription-based services are starting to catch on. For example, Tony McCune Chrysler Jeep, a large automobile dealership in National City, Calif., has benefited tremendously from subscription-based services. According to Mike Palomata, Tony McCune Chrysler Jeep's general manager, their dealership has actually seen a 30 percent uplift in sales, as a result.
"Subscription-based services make it possible for us to change our messages and content loops on the fly, without staffing in-house technology and video expertise," Palomata said. "This alone makes subscription-based services invaluable to us. Our special promotions, inventory and company news are changing by the hour, and so if we were broadcasting news from last week, the technology wouldn't be able to do its job. We rely on digital signage to reach our customers with timely and compelling messages every time they step into the showroom." What's more, the dealership also sells advertising space on the digital signage displays to outside vendors that offer related products and services, such as car accessories and automobile insurance. Palomata added, "By selling advertising space to our partners, we're not only using digital signage to sell more cars, but we're actually making money on it through advertising revenue. This technology has definitely more than paid for itself."
Related Media
Subscribe
Get the latest news and resources from Digital Signage Today.
