In today’s economy, advertisers for large retail organizations are forced to do more with less while balancing the need to engage with their customers and promote their products with economic viability.
    Tim Tang, marketing director for HughesNet Digital Signage services, said that IP- and satellite-delivered digital signage projects are capital-intensive programs, even in a good economy. “Digital signage may provide an effective method to engage with their consumers. Nonetheless, there will be speed bumps for new initiatives in these types of economic circumstances,” he said.
    Tang also believes there is a "huge opportunity" for the IP-satellite hybrid market, as a vast majority of new digital signage products relies on IP technology. "Digital media solutions require a great deal of bandwidth. We have worked with several large enterprises who have attempted to distribute high-quality multimedia content through a terrestrial network. This is a difficult and challenging task. The idea of point-to-point distribution with large amounts of content simply does not scale, particularly with large networks. Multicast distribution via satellite is the ideal solution to distribute multimedia content to a large number of locations," he said.
    But the global recession will thin out the amount of vendors who are able space, said Chris Riegel, CEO, Stratacache, which provides multi-platform software and appliance-based technology. "We are seeing a massive wave of consolidation in the digital signage area. I believe you will lose 60 percent to 70 percent of the vendors in this space. The recession is having an impact and clearing out a lot of the companies that are not executing. That is clear."
    Digital signage solutions also may be losing the boost that was provided two years ago through upgrades to business TV, said Christopher Baugh, president of research firm, NSR. “Digital signage has generally not met expectations and has not developed as quickly as many originally thought. Time frames have slipped. It is a challenging market,” he said.
    Despite the disappointment, Baugh argues that the digital signage market is a long-term play. “We still believe in the viability of the digital signage market, and some obstacles are being overcome. Business model identification and formation is the biggest problem. Large retailers — the low-hanging fruit with satellite [information technology] already in place — get it but not necessarily the smaller players,” he said.
    Current numbers and projections for the digital signage sector as a whole, are encouraging. The sector appears to be on track to achieve forecasted sales of more than $3 billion by 2009, said Lisa Jachimowicz, president of the Washington-based Digital Signage Forum. While demand for satellite-delivered digital signage is growing, small and medium-sized companies remain reluctant to embrace it because “they think it is too expensive to implement,” she said. “The good news is that larger networks are being deployed, and using satellite can be an easier solution for managing content and more cost effective [than] traditional digital signage delivery for both small and large companies. Satellite companies need to do more marketing and more education in the digital signage industry, and there is a serious lack of presence when it comes to satellite solution providers at trade shows and industry events.”
    “Some companies are placing bets on digital signage versus traditional media buys,” said Mike Tippets, vice president and CTO of hardware provider Helius Inc. “Should Dr. Brown buy a slice of time on the local diner ad loop instead of time on the local cable channel or a print ad in the local newspaper? Again, there is a lack of credible information about uplift in traffic from one versus the other. There is a reasonable argument that [digital video recorder] technologies are making local cable ads less appealing.”