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Daktronics (A): The U.S. Digital Signage


Industry in 2010
Joseph Kavanaugh, Sam Houston State University
Joshua Warne and Carol J. Cumber, South Dakota State University

he U.S. signage industry is almost as old as organized urban commerce in


the colonies. The earliest signs were associated with taverns and coffeehouses.
Tradesmen identified their shops with pictorial signage representing their trade
or the product offered. Names painted above entryways were augmented by protruding
signs (most often of woodbarber poles, wooden Indians) that identified the establishment, although such signage was largely confined to on-premises signs. Printed
handbills announcing auctions, stagecoach timetables, and traveling theatrical groups
appeared as early as the middle of the eighteenth century, but it was another century
before the outdoor advertising industry gained major impetus from the colorful posters of Phineas Taylor Barnum who first used them in the mid-1800s to advertise his
circus.1 Later, with the growth of the American highway system, the industry evolved
from such early shop signage and posters into the development of roadside signage for
promoting approaching services and general products. From Burma Shave and Mail
Pouch2 to an array of services (e.g., food, lodging, gasoline, and attractions), Americas
roadsides were embellished (apologies to Lady Bird Johnson)3 with signage targeting
the needs of the traveler.
Eventually these signs were lighted, creating the first major segmentation of the
marketelectrified versus other forms of print signage. Luminous tube, fluorescent
lamp, and incandescent bulb signs evolved as the market developed and retailers, manufacturers, and others sought more and better ways to identify their facilities, products, and services, and communicate their marketing message.
Driven by new technologies in microprocessors, graphics software, digital controllers, wireless communications, and low-energy Liquid Crystal Display (LCD) and
Light Emitting Diode (LED) light sources,4 by the turn of the twenty-first century the
latest evolution in the industry was the emergence of digital signage.
The digital signage industry came into being to meet the emerging commercial
and communications need for more dynamic messaging. It was a nexus between two
industriesthose who manufactured the equipment and those who created the messaging content. Together, they created an industry that provided instantaneous messaging at the speed of light.

Copyright 2012 by the Case Research Journal and the authors. The authors developed this industry
note for class discussion rather than to illustrate either effective or ineffective handling of the situation.
The industry note was presented at the North American Case Research Association Annual Meeting on
October 29, 2010, in Gatlinburg, Tennessee. This project was made possible with financial support via a
NACRA case research grant and South Dakota State University.

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41

In 2010, the market was a technically complex, multi-product, multi-segment,


multi-channel, highly fragmented market with few dominant firms, rapidly-evolving
technologies, and relatively low entry barriers for many parts of the industry. Those
firms that emerged as dominant competitors tended to have higher levels of vertical
integration, greater financial strength, and broader product lines; served multiple segments; and had the design and engineering capabilities to provide high-level product customization. These capabilities enabled them to meet the demands of top-tier
customers with challenging product requirements for one-of-a-kind installations like
sports stadiums, large-venue advertising such as Times Square (New York), and major
communications/display installations such as the Beijing Olympic Games. Increased
capabilities in design, product engineering, fabrication, and technology integration
led to broader and more diversified product lines and the ability to meet demanding
customer requirements in multiple market segments.

The U.S. Digital Signage Industry


The emerging digital signage industry represented the nexus (intersection) between
two established industries, the Billboard and Sign Manufacturing industry (NAICS
code 33995) and the Billboard and Outdoor Display Advertising industry (NAICS
code 54185). The first focused primarily on manufacturing hardware (e.g., paper
and digital display outdoor billboards often viewed along highways, in-store digital
displays, and electronic price signs at your local gas station) while the second established industry focused on the development of contentthe actual words, images,
and graphics that convey the advertisers message. Companies that competed in the
digital signage industry integrated hardware and content to deliver digital messaging to consumer markets that sought rapidly-changing information. The advertising
industry often referred to these markets as the digital-out-of-home (DOOH) market,
while manufacturers referred to their products as digital signage or messaging systems.
The industry was not uniform in its language and many terms were used interchangeably: out-of-home advertising; billboard, sign manufacturing, and advertising display;
digital signage; DOOH; outdoor and display advertising; outdoor advertising; and
billboard and sign manufacturing were often used contextually to represent the same
essential elements of the industry: 1) content that delivered the message; 2) the hardware through which it was displayed; and 3) the integration of the two.

Overview of Industry Structure


The structure of the industry in 2010 is presented in Exhibit 1. Each manufacturer
faced choices about how to go to market and which application segments of the
market they wished to target. Generally, large projects were sold direct to the final customer or through partners or national accounts (franchises or companies with multiple
locations). Smaller applications were sold through resellers or integrators who delivered turnkey installations to their clients. Resellers included advertising and marketing
firms; integrators included consultants, architects, engineers and project managers.
End user market segments (also called verticals) ranged from retailing, transportation, and advertising/messaging, to entertainment/sports venues.

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Exhibit 1: Structure of the U.S. Digital Signage Industry in 2010

Producer

Company

Distributor

End User

Entertainment
Venues

Resellers: Advertising
and Marketing
Companies

Integrators: Consultants,
Architects, Engineers,
and Project Managers

Company Direct,
Partners or National
Accounts

Commercial Indoor/
Outdoor Advertising

Transportation

Mobile and Modular

Other

Exhibit produced by authors.

Product and Market Segments


Table 1 outlines some of the applications for which digital signs could be used in the
different market segments. For each application end users could choose from a variety
of different products available from a multitude of vendors. The table illustrates the
markets complexity with many products and segments in 2010.
In addition to the market, products were also complex. A digital sign had several essential elements all of which came from a different set of vendors: the plasma,
LED, or LCD screen; a player, either a small computer or digital controller; software
that configured the image and drove display of the content; content of the message;
and peripherals related to the installation of the sign. All of these components were
acquired by the system integrator which assembled the sign package, installed it, and
might provide after-sale service and support. For the sign to work it had to be able to
communicate with a network source via cable or wireless connectivity to receive the
digital signal provided by content specialists who designed the messagingtext, graphics, photos, streaming videothat were the actual set of images displayed on the sign.5
Because of these complexities, employing an experienced vendor, preferably with
industry-specific knowledge, added significant value.6 For this reason, many of the
industry-leading firms sought higher levels of vertical integration where they could
better control quality and the total end-user interface.

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Table 1: Examples of Applications with Digital Signage Market Segments


Market Segments
Entertainment
Venues

Commercial Indoor/
Outdoor Advertising

Transportation

Large Sports Stadiums Convenience & Retail Airports & Aviation


Stores

Application

Small Sports Venues

Financial, Medical, &


Pharmacies

Mobile & Modular


Concerts & Staging

Other
Campus
Communications

Mass transit (Railways Auto Shows


& Buses)

Control Rooms &


Simulators

Amusement & Theme Restaurants, Gaming,


Parks
& Hospitality

Freeways, Tollways
& Roadways

Festivals & Sporting


Events

Manufacturing

Cinemas & Theatres

Billboards

Fixed Highway Signs

Award Shows

Landmarks &
Spectaculars

Fairs & Expos

Shopping, Civic, &


Convention Centers

Parking

Trade Shows

Performing Arts

Auto Dealers

Casinos

Worship

Source: Table produced by authors.

International Market
Because of the bulky size and weight of large digital signs, relatively few were either
exported or imported. Fabrication generally occurred within the region where the
product would be installed. In 2010 imports represented only 1.8 percent of domestic
demand, while exports accounted for only 0.8 percent of industry revenue. However,
U.S. sign manufacturers sometimes outsourced production to firms in foreign countries by sending design requirements and orders electronically, which reduced turnaround time and limited production problems.7
The two largest markets were the U.S. and China, half a world away from one
another, suggesting that any significant market penetration would necessitate incountry fabrication and installation. Design, engineering, and content could still be
handled in the home country of the manufacturer.
From 2005 to 2008 digital display was the fastest growing segment of the Chinese
advertising market with a compound growth rate of 80 percent, from 1.1 billion Yuan
in 2005 to 6.53 billion Yuan in 2008. VisionChina, the leading operator of outdoor
digital TV advertising networks in China, grew 2008 revenues by over 250 percent
and profits grew almost 400 percent.8 China overtook the U.S. in 2008 as the top
digital signage consumer as it prepared for the 2008 Olympics.9 China had the most
site deployments, while the U.S. still led in advertising dollars committed to digital
signage.10 Besides China, other major international markets for digital-out-of-home

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(DOOH) advertising included the UK, Japan, France, Germany, and Russia.11 In early
July 2009 Samsung Electronics Co. announced that it was entering Japans market for
digital signs with 46-inch ultra-high definition (UD) LCD panels.12
A major industry analyst observed in September 2009 that digital signage networks tend to be country or region-specific. . . . Each major region also tends to have
its own set of solution leaders . . . (T)echnology winners will emerge and be defined
by major geographic marketplaces: North America, Europe, Asia, Australia, South
America and Africa.13 To emerge as a global leader would require consolidation of a
home market first. According to the same analyst, True globalization will likely be
fueled by entry of truly global entities.14

Emergence of the Industry


Sony introduced the Jumbotron, based on cathode ray technology (CRT), at the
1985 International Science and Technology Expo. By 1989, Sony moved to LED technology when it installed the then-largest screen in Torontos SkyDome. Daktronics,
the industrys current market leader, was founded in 1968 and installed its first digital
billboard in 2001. Over the next decade, the industry grew rapidly driven by developments in technology, visibility of high-profile installations, and the changing needs of
the various industry verticals (end user market segments). Industry technical standards evolved, as did the ability to measure the impact of investment in digital signage.
20012007. In the early years, growth in the billboard and sign manufacturing
industry was driven by commercial construction (especially retail); outdoor advertising expenditures; improvements in technology, especially the advent of plasma, LED,
and LCD digital technologies; and the rate at which retailers and others adopted digital signage for information and promotional purposes. For the period 20012007,
annual outdoor advertising expenditures in the U.S. grew from $5.56 billion to $7.77
billion.15 Of this, the digital portion (DOOH advertising) was estimated to be $2.43
billion.16
The industry also faced major issues during this early stage, including the plethora
of competing technology options available and the difficulty of proving return on
investment (ROI) in network development and deployment. The array of competing
technology options available was a substantial challenge to system integrators, and
made system integration a key to any sustainable business model.17 Aggregators helped
unify technology platforms as dominant technologies emerged. In turn, the establishment of industry standards for communications protocols further enhanced the confidence of those timid to invest in emerging technologies.
A proprietary market research survey assessed the market status of digital displays
in 2007 and their future potential. The sites surveyed were used primarily for thirdparty advertising in an ambience of consumption, locations where people are required
to wait, and locations where people are in transit.18 According to this survey, the
number of screens deployed at each site averaged three to four, ranging from ten to
twenty-five per location for retail establishments to one to eight for hotels, pubs and
bars; and one to five for healthcare sites. The number of sites at the end of 2007
was 300,000+, projected to grow to 850,000, while advertising revenue from digital
signage was estimated at $1.1 billion, projected to grow to $2.7 billion by the end
of 2013. The greatest concentration of digital displays was in the United States, followed by Asia, Australia, Canada, Europe, the former Soviet Union, and parts of Latin

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America. Retail accounted for 29 percent of the sites and 71 percent of the revenue.
Hospitality, healthcare, and transportation were also important verticals.
2008. By 2008 digital signage had become a major segment of the billboard and
sign manufacturing industry19 As Table 2 shows, digital signage was estimated to be
$2.86 billion (23.8 percent of industry revenue of $12.1 billion dollars).20 This revenue was not highly concentrated. The four largest firms accounted for approximately
11.2 percent of sign manufacturing revenue whereas the eight largest firms summed
only to 15 percent of revenue.21
Table 2: Billboard & Sign Manufacturing in the U.S. in 2008
Industry Segments and Percentages of Revenues
Non-electric
printed signs

Digital signs

33.2%

23.8%

Non-electric
screen
printed signs
14.0%

Luminous
tube signs

Fluorescent
lamp signs

13.3%

10.8%

Incandescent Total
lamp signs
revenues
(billions)
4.9%
$12.1

Source: IBISWorld Billboard & Sign Manufacturing in the U.S. 33995, July, 2008.

According to a 2008 study conducted by Multimedia Intelligence, retail, transportation, and restaurants/bars were the three largest digital signage verticals, while
education and corporate communications were making impressive gains.22 Other segments of significance were corporate, healthcare, transportation, entertainment, and
hospitality.23
Advancements in technology resulting in declining costs was a major factor in
development of the DOOH segment and helped account for the segments resistance
to the 2008 down turn in overall advertising expenditures. Other factors that were
driving the global digital signage market included urbanization and the growth of
retail spaces, flourishing tourism, people spending more time out of their homes,
and huge investments in the transportation infrastructure for outdoor advertising in
emerging markets.24
Expertise in measuring advertising impact was advancing; for example, one study
established that a relatively high percentage of all adults (62 percent) were aware of
advertising on digital signs, but the results were even more effective when targeted
to specific life patterns. More college students noticed this media (75 percent), while
59 percent of Hispanics versus 48 percent of the general adult population found the
advertising entertaining. Such studies established the basis for highly-targeted marketing and were critical for preparing ROI estimates based on advertising effectiveness.25
2009. In early 2009, the largest digital sign installed in the U.S. was at Walgreens
Times Square location. It was 17,000 square feet in surface, comprised thirteen interconnected plasma screens, and rose to 340 feet. Additionally, thirteen digital signs at
street level offered a wide range of advertising options for Walgreens suppliers. Each
hour of programmed content contained thirty minutes of paid advertising and thirty
minutes of Walgreens promotions and Times Square nostalgia.26
National sports also provided great visibility for the industry as broadcasters highlighted the wow factors of the Dallas Cowboys new stadium in Arlington, Texas,
that opened fall 2009. In addition to the largest HD screen to date, the StadiumVision installation by Cisco included nearly 3,000 digital signage screens throughout
the complex that delivered entertainment, pre-event, in-event, and post-event, using

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video and content, such as out-of-town games and scores, trivia, weather, traffic and
news, in addition to the action on the field,27 all controlled by internal IT infrastructure. Stadiums in New York, Miami, Kansas City, and many in Europe received similar
StadiumVision installations in 2009. The trend was projected to continue as fan expectations escalated for a total entertainment experience.28 It was no longer just about the
game on the field; the total multi-media environment within the stadium elevated the
fan experience to a higher level. Industry observers saw that the future would belong
to equipment manufacturers and content providers who could continuously enhance
the product and meet or exceed ever-increasing fan expectations.
Another notable development was greater continuity between the digital screen
and the other four screens (cinema, TV, PC, and mobile) with interactivity possible.29
As an example, the nations first free, over-the-air broadcast of mobile digital television
to the public was launched in April 2009, a collaboration between Harris Corporation and WRAL, Raleigh, NC. Raleigh bus riders with a lot of dwell time30 could
watch monitors with hyper-local content that changed depending on their location in
the city; and they could interact via their mobile phones.31 More such interactions of
digital signage and mobile were on the way.32
Industry standards were further solidified in 2009 when the industrys first comprehensive training and certification program exclusively for the installation and support
of digital signage was launched.33
The overall outdoor and display advertising industry was affected significantly by
the recession in 2008 and 2009. Estimates were that 2009 revenues declined 11.6 percent to $6.29 billion.34 However, the DOOH sector outperformed the signage industry as a whole, growing 25 percent in 2009, as it approached its one millionth networked screen. The 4Q2009 North American digital signage industry index, a major
industry performance measure, rose by 10.8 percent, reflecting increased firm revenue,
screens deployed, the number of DOOH networks, and increased capital expenditures
and employment.35
The emergence of digital signage, both indoor and outdoor, was changing the economics of the advertising industry. DOOH required much higher front-end investment but yielded lower long-term operating costs than traditional signage media. And
this medium had only begun to penetrate the advertising market. For instance, of
Lamar Advertisings 159,000 billboards, only an estimated 1,100 were digital in 2009.
Although there would be reduced direct labor costs in changing displays at these sites,
other maintenance costs associated with the displays would likely increase. Some of
these costs were recouped through higher demand and, therefore, higher prices commanded by these sites. Additional savings would be realized from reduced printing and
installation costs.36
2010. Among the 2010 trends foreseen by industry observers were the continuing
emergence of content, progress in the development of industry content standards, and
the continuing shift of investors and advertising dollars as new ad-based networks proliferated. Software for managing content continued in its development as advertisers
sought to better target micro-markets.37
In February 2010, the tenth convention of the industrys largest trade show, the
Digital Signage Expo, had over 3,400 participants. Reflective of an emerging industry,
56 of the estimated 200 trade booths that showcased their products and services were
first-time exhibitors.38 Only a few were recognizable multinational firms (Mitsubishi,

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Hyundai, Intel, Philips, Samsung, Sharp, and Sony) but these had already established
a position in this young industry.
Manufacturers of digital signs and the peripherals required to run them were only
a portion of the industry. The driver of the industry was the content providers who
designed the messages that filled these signs for various locationspoint-of-purchase,
point-of-dwell, in-store promotional screens, digital networks, and outdoor advertising. The key to this marketing medium was the development of networks of signs
linked by cable or wirelessly to servers that delivered content across the network
within a store or across an entire franchise system. Examples operational by 2010 were
Walgreens exterior signage, Wal-Mart TV, and numerous fast-food franchisers that
offered content through their own in-store network of digital screens.39
While some content providers sought to compete as cutting edge video and graphic
designers (e.g., Scala, MiniComm), others like RedPost, a Goshen, Indiana company,
saw a whole new opportunity at the low end of the market. Using digital signs as
bulletin boards, its products enabled local independent retailers and business owners
who could not afford sophisticated installations to manage content through web-based
software. For menu boards, employee announcements, in-store promotions, and other
simple content, the systems included basic text and graphic packages and were easily
managed.40
Another industry trend was the emergence of companies that could provide complete end-to-end solutions rather than customers having to rely on aggregators to
assemble the technology platform; content providers for video, graphics, and text;
installers to put the system in place; and others for after-installation service and support. Wireless Ronin Technologies, which specialized in menu signage for food installations at places such as stadiums, was one example of a firm that provided a complete
turnkey digital signage system that could be managed from one central location. Its
services included consulting, creative development, project management, installation,
and training.41
Many industry insiders suggested that 2010 would be the tipping point for the
industry. High growth, increased advertising revenues, standardization of communications protocols, the continued growth in the number of industry participants and associations, and merger and acquisition activity constrained by the recession suggested
that the industry was approaching its next stage of development.42 Market evidence
suggested so as well, as major players who had been sitting on the edge of the industry appeared to be ready to enter the market in much bigger ways. Dell, IBM, Cisco,
Oracle, and others were preparing new digital platforms or software, not to mention
Google (which had patents pending) and Microsoft who had been absent from the
market thus far.43 Some analysts believed the table was set in the industry for an
infusion of serious investment capital and the entry of major technology leaders with
global reach.44

Environment of the U.S. Digital Signage Industry in 2010


Significant factors determining the industry environment in 2010 included its suppliers, technologies, political and regulatory context, and the economic outlook.

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Suppliers
In 2010, with the exception of the LED light source, the resources needed to create
digital signs were available abundantly either locally or regionally. These included aluminum or steel sheet metal, plastics, semi-conductors, circuits, wiring, and hardware.
Screen types including liquid crystal, plasma, and other fluorescent light were also
abundant. Content providers were also plentiful.
It was a time of transition for the industry as manufacturers began to produce
digital signs with plastic cases rather than steel. Design advantages of plastic included
its abundance, durability, lower cost and lower weight than metal, making plastic cases
easier and less expensive to transport. It was also easy for manufacturers to work with
suppliers on standard and custom design specifications like abstract shapes.
By 2010 LED was becoming the preferred light source for digital signs and other
peripherals. It was also being used to backlight LCD screens as well as for indoor and
outdoor lighting solutions. LEDs offered manufacturers and end users dynamic lighting that was durable, long-lasting, bright, and energy efficient.
While LED demand was projected to be 2030 percent greater than supply in
2010, LED supply was expected to grow rapidly.45 Taiwan and China were the largest
producers and expected to expand along with manufacturers in Japan, India, and Russia. Table 3 shows the number of fabricators in 2010. The production output of many
of these fabricators was not scheduled to come on line until 2012. Some industry analysts expected even more global firms to enter the LED supply chain and help alleviate
the bottleneck, improve productivity, and bring down costs.
Table 3: Global Dedicated LED Fabricators in 2010
Global Region

# of Fabricators

North America

Europe

China

22

Korea

Japan

11

Taiwan

36

Southeast Asia

Source: SEMI Opto/LED Fab Watch Database, March 2010

Technologies
Digital signage powered with LED or LCD lights stood in contrast to the broad billboard and signage industry, where the level of technology development was low and
the preference of the industrys customers was for traditional billboard advertising at
much lower cost.46 Digital displays cost more and depreciated faster than traditional
billboards. IBISWorld reported that digital billboards need to be replaced about every
five years at an estimated cost of $250,000 per unit.47

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Digital billboards offered numerous advantages over traditional billboards despite


their higher cost. Their messages could be changed constantly; they could be made
interactive with the cell phones of passersby; and they were backlit for greater nighttime visibilityall features that were projected to command rate premiums from
advertisers.48
A negative factor was that digital signage required a power source and would
demand more power as the industry expanded. The positive side was that the messaging could be changed instantaneously without the need to print new billboards, flyers,
newspapers, and other forms of messaging that consumed paper stock as a medium
and power for machines to produce them.
Some new technologies under development that would continue to enhance the
value proposition of digital signage included:
GPS modems that instantly updated billboards on buses and cars.
LED billboards that used Bluetooth and infrared technology to display multiple messages during the course of a day.
Interactive billboards that sent messages directly to cell phones with product
offers.
Billboards utilizing scanning technology that could identify consumers gender to further tailor advertising.49
Technology innovation based on wireless penetration, 3D, holographic displays, and touch screen.50

Political and Regulatory Environment


Outdoor advertising was subject to governmental regulation at the federal, state, and
local levels. Visual pollution from signs along highways had long been a concern. Regulations generally restricted the size, spacing, lighting, and other aspects of advertising
structures and posed significant impediments to expansion in many markets. Federal
law, principally the Highway Beautification Act of 1965 (the HBA), regulated outdoor advertising on Federal Aid Primary, Interstate, and National Highway Systems
roads. The HBA required states to effectively control outdoor advertising along these
roads, and mandated a state compliance program and state standards regarding size,
spacing, and lighting. All states had passed billboard control statutes and regulations
at least as restrictive as the federal requirements.
Municipal and county governments generally also had sign controls as part of their
zoning laws and building codes. Using federal funding for transportation enhancement programs, state governments in the past had purchased and removed billboards
for beautification, and might do so again in the future. Since digital billboards had
only been developed and introduced into the market on a large scale within the past
five years, existing regulations that did not apply to them in 2010 could be revised in
the future to impose greater restrictions, potentially because of concerns over aesthetics
or driver safety.51
As external digital signage became more prevalent, regulation at the local level52
had heated up as people reacted to the intrusive brightness of nighttime digital signage, and the potential negative impact on urban aesthetics and traffic safety.53 A July
2010 article in Planning magazine addressed the issue of community response to digital signage and its potential as a traffic hazard, noting that Los Angeles, El Paso, and
St. Louis had adopted moratoria, and outright bans had been enacted against such
signs in Maine; Vermont; Montana; Pima County, Arizona; Amarillo, Texas; Durham,

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North Carolina; Knoxville, Tennessee, and Denver, Colorado. Surely, since then, other
municipalities have followed.54 However, other studies, conducted in Cleveland,
OH and Rochester, NY, by the Outdoor Advertising Association of America, found
that not only was there no correlation between signs and accidents, traffic accidents
decreased by four percent within a half-mile radius of the signs.55
More positively, the industry made major contributions to enhancing the infrastructure of the nations transportation system. Local, state, and federal agencies were
the primary operators of the countrys transportation network. Highways, airports,
and local transit systems (bus, train, subway) all required signage and increasingly were
using digital messaging systems to alert passengers and drivers to changing conditions
(e.g., changes in schedule, lane closings, traffic conditions, and Amber alerts).56

Economic Outlook
The U.S. economy was predicted to show signs of recovery in 2010 as reflected in
Table 4. Economists anticipated that as disposable income rose, consumers would
spend more money on the goods and services which the industrys clients advertised.
As corporate profits rose, companies would allot more money to advertising and the
industry would return to growth. Although modest recovery was expected in 2010,
strong signs of improvement would not be seen until 2011, when the economic and
operating environment was forecasted to be more robust.
Overall, the billboard and sign manufacturing industry was projected to grow to
$13.3 billion by 2015, an average annualized rate of 2.9 percent. During the outlook
period (20102014), out-of-home advertising was forecasted to increase as a proportion of total media expenditure while traditional media (e.g., newspapers and television) continued to decline. The Internet and social media networks made it harder to
reach a mass audience, leaving outdoor advertising as one of the few ways to do so. An
increase in digital display advertising accounted for much of the revenue growth projected for the outlook period. Advancements in digital technology would make digital
displays more affordable and efficient, increasing their profitability.57 Following the
recession, expenditures from 20102015 for outdoor advertising were expected to grow
from $6.3 billion to $8.1 billion based on increased corporate profits, increased total
media expenditures, and overall performance as the economy recovered and consumer
sentiment improved. It was the fastest growing segment of the advertising industry.58
Table 4: Economic Factors Outlook for the U.S.: 2010 to 2014
Year

Dollars Per Capita


Disposable Income

Percent
Growth

Index of
Consumer
Sentiment

Percent
Growth

2010

29,296

1.4

71.9

13.6

2011

30,087

2.7

80.5

12.0

2012

30,840

2.5

86.4

7.3

2013

31,611

2.5

86.9

0.6

2014

32,369

2.4

89.0

2.4

Source: IBISWorld, 2009.

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Trends that would drive domestic demand included the continuing replacement of
luminous and fluorescent signage with digital signage; the upgrading of stadium signage and scoreboards to better LED, LCD, or plasma technologies; and the increased
use of digital signage for messaging by business and many other types of organizations.
Profitability would continue to improve due to restraint of prices in supply markets,
increased margins associated with more technologically advanced products, and an
increased level of customization achievable with digital technologies that could deliver
higher-valued solutions to customers signage needs.59 (See Appendix A for a sample
rate sheet for the marketing of digital signage advertising.)
However, industry growth would continue to be hampered by government controls
on the number, location and content of outdoor displays. Increased demands from
environmental groups to reduce billboards on highways would continue to inhibit
growth. Furthermore, an increased proportion of clients marketing budgets targeted
toward such below-the-line advertising as promotions, trade shows, and sponsorships, would continue to drag on industry revenue growth.60, 61
There were challenges ahead. A survey of industry advertisers identified proof of
effectiveness as a primary concern, followed by the heavy capital investment to deploy
a network, and the industrys need for standardization to ensure hardware, software,
and network compatibility. Managing content across multiple networks, the need for
industry consolidation, and the integration of mobile devices and the Internet with
digital signs were also mentioned.62
Return on Investment. Over the next few years, the industry was expected to
experience increased demand by clients for more targeted and direct forms of advertising, and proof of impact. Demands for improved measurability would be met by
continuing technological advancements that generated above-average returns to advertisers. Digital displays offered the distinct advantage of being able to change constantly
throughout the day, allowing different demographics to be targeted for specific times.
Improvements in audience measurement would assist companies in market research
and allow companies to place advertisements at the right place and at the right time.
Better market research would help operators improve return on clients investments
by allowing advertisers to target more specific audiences. While earlier efforts had
developed models for measuring ROI for both sign owners and their advertisers,63 the
new era of digital signs would need to deliver customization of content at any level,
near-real-time diagnostics, and accurate proof-of-play reporting64 in order to prove
ROI for investors and advertisers.

Competitive Environment
By 2010, there were hundreds of firms that competed in the U.S. market but most
were minor, segment-specific competitors with sales less than $20 million. For 2010,
Table 5 lists major manufacturers across the industry indicating their locations and
size (revenue and profits) where available.
Appendices B and C provide a more detailed profile of each competitors market position based on the types of technology, market segments targeted, distribution
channels employed, and their customization capabilities.

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Case Research Journal Volume 32 Issue 4 Fall 2012

Table 5: Major Competitors of the Digital Signage Industry in 201065


Company

HQ
Location

Website

2009 Net
Income

2009? Company
Revenues (USD)

Adaptive Micro Systems (AMS)

USA

www.adaptivedisplays.com

52,000,000 *

ANC Sports

USA

www.ancsports.com

57,000,000 *

(86,000,000)

919,200,000 ***

BARCO

Belgium

www.barco.com

Capturion

USA

www.capturion.com

Daktronics, Inc.

USA

www.daktronics.com

26,428,000

581,900,000 *

Hibino Corp

Japan

www.hibino.co.jp/english

(3,253,853)

173,574,544 ***

Hi-Tech LED Displays

USA

www.hitechled.com

30,000,000 **

Imago, (ADDCO, Odeco)

Spain

www.imagoscreens.com

46,630,000 *

www.ledstar.com

4,600,000 *

Ledstar, Inc.
LG Corporation1
Lighthouse Technologies

Canada
Korea

www.LGsolutions.com

979,914,738

Hong Kong www.lighthouse-tech.com

n/a

26,068,124,151 ***

59,260,000 *

(13,414,000)

233,800,000 ***

LSI Industries, Inc.

USA

www.lsi-idustries.com

Mitsubishi Electric1

Japan

www.mitusbishielectric.com

Nevco, Inc.

USA

www.nevco.com

10,800,000 *

Optec Displays, Inc.

USA

www.optec.com

12,400,000 *

6,732,540

172,970,994 ***

www.opto.com.tw

1,593,538,170

36,970,616,123 ***

Optotech Corporation

Taiwan

Panasonic Corporation1

Japan

www.panasonic.com

(3,822,637,589)

SignCoEDS (EDS)

USA

www.signcoeds.com

7,000,000 *

Skyline Products, Inc.

USA

www.skylineproducts.com

(15,434,000)

26,400,000 *

Sony Corporation1

Japan

www.sony.com

(998,002,744)

Telegra

Croatia

www.telegra-europe.com

Toshiba1

Japan

www.toshiba.com/led

Trans-Lux Corporation

USA

www.trans-lux.com

Watchfire Signs

USA

www.watchfiresigns.com

Young Electric Sign Co.


(YESCO)

USA

www.yesco.com

P
(3,488,793,000)
(8,795,999)

78,331,857,247 ***

77,973,622,095 ***
60,220,000 *
67,125,141,220 ***
36,700,000 ***

10,800,000 *

13,148,000

1,032,000,000 ***

*Estimates were found at http://www.hoovers.com on 06/07/2010


**Estimate from http://www.usitoday.com/article_view.asp?ArticleID=2034
***Financials from investors section of company websites.
Mitsubishi, LG, Panasonic, Sony, and Toshiba had revenues that were much larger than other firms in the industry, much of
which was earned producing products other than digital signs.

P = Privately held. Hoovers does not report net income for privately held companies.
Source: Table produced by authors from sources cited in the footnotes to the table.

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

53

Summary Analysis of Industry Competitiveness in 2010


In 2010, the competitive environment primarily depended on the type of products
a company sold, and the market segments it was targeting. For a product that had
a standard design without much variation from one company to the next, like the
LED text or graphic sign, companies primarily competed for business based on price.
Purchase decisions that were focused heavily on product design features however,
would change the competitive scope of things. While price was still important, considering the investment a digital sign required, other variables like the reputation of
the company manufacturing the sign and its history of after-sale support and service
tended to become bigger factors in the purchase decision process.

Products
There were hundreds of products available in the DOOH market place, some of which
had many applications and others only a few. In some instances, a product design
varied little from company to company, and in others one company may have had a
product that was completely unique. One example of a design that varied very little
from company to company was a LED sign capable of displaying basic text or graphics,
which might have been seen outside of a McDonalds or Burger King. The sign itself
probably varied no more than the cheeseburger you would buy from either store; its
the same product with slightly different design variations. On the other hand, the giant
Mitsubishi video display at Dallas Cowboy Stadium and the Daktronics Coca-Cola
spectacular in Times Square, New York were completely unique, one-of-a-kind designs.
In fact, nearly every sign application received some design modification, and customers were able to demand this given the large number of products and companies
that were competing in the industry. End-users were looking to maximize ROI as they
sought increased revenues and sales, or tried to enhance the physical environment
of their venue. Increasingly, sign features like viewing angle, display brightness and
contrast, software and controllers, networking capabilities, number of LED diodes
used, or high definition capabilities, among others, were becoming more important as
technology advanced and became more affordable. Also, outdoor products had to be
designed to withstand harsh conditions including rain, snow, hail, ice, blowing winds,
sand, salt, sea air and debris, as well as extreme temperatures.
In addition to sign design and features, the quality and durability of the sign were
important. The quality of materials used should be in line with the prices, and the
warranty should reflect some indication of the products durability. Customers in the
DOOH market wanted a product that was durable, functional, and attractive, and
may have been willing to pay a higher price for one that lasted longer than a less expensive one that would need to be replaced in a short time.
Finally, economies of scope were important for companies in the industry. A diverse
product line enabled companies to serve several different market segments, and sell
multiple products to existing customers and attract new customers.

Sales and Marketing


A companys sales and marketing capabilities were not only determined by its financial resources, but also by the structure and networks it was able to build to get its
products to the market. A company that had the ability to establish sales and service

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Case Research Journal Volume 32 Issue 4 Fall 2012

locations across multiple regions/countries may have had some advantages over a company that was attempting to operate out of a centralized location, and hence greater
growth potential.
However, company owned and operated sales and service offices were not the only
way to accomplish a vast sales and marketing network. Many of the companies in the
digital sign industry used dealer networks (resellers) to sell, service, and provide aftersale support. Some companies used both. In most cases, a dealer network was used
to sell and service standard commercial or retail signs, where there was not a lot, if
any, customized product designi.e., signs that could be produced in large numbers
through a standardized manufacturing process. This made it easier for manufacturers
to train the dealers on how to operate, sell, and service the signs.
National accounts were another important sales channel for companies in the
DOOH industry. National accounts included franchises and large companies with
multiple locations like Walgreens, McDonalds, Sonic, and WalMart. When a potential
customer chose to make a DOOH advertising network part of its business model, it
created an opportunity for an industry competitor to pick up a contract that included
supplying all of the DOOH signs for the organization. This type of large volume sale
could be very stabilizing to a company for years to come.
Distribution channels were vitally important in this industry. The ability to be in
direct contact with the end-user or decision maker allowed one company to set itself
apart from the next. In some instances, like with large venue video score board displays, the sales cycle could be extremely long and oftentimes a customer was dealing
with an integrator (e.g., architect or consultant). The ability to convince the integrator that your companys product was the best could lead to not only a sale today, but
future sales through them as well.
Reviewing the distribution channels puts into perspective why it was important
for a company to develop a sales and service network, whether it involved company
owned and operated branches or a dealer network. The capacity of a company to use
all distribution channels and disperse representatives across the prospective sales area
would ultimately increase the amount of face-to-face time with decision makers. This
was vital to these companies because only a handful of the companies competing in
the industry were recognizable multinational firms. Even industry leader Daktronics
was not a household name.
Reliable after-sale support and service was another benefit of a strong company
network of sales and service locations. This allowed a company to quickly respond to
maintenance and service inquiries. Given the fact that many of the customers would
not be able to service their own products due to the technology and engineering
involved, customers wanted some reassurance that their investment would be maintained and in good operation for the expected life of the product. For companies with
global offices, this would also give them an advantage as they were able to have their
own technicians provide after-sale service in the foreign country, eliminating the concern of who would maintain the customers investment.
Providing reliable after-sale support was one way to build a strong reputation in
the industry. With increasing levels of competition, companies had to find a way to
set themselves apart. Building a reputation for one or more aspects of the business was
vital. The number of products and companies available made it easy for customers to
find alternatives or create bidding wars. It was often the intangibles that set companies
apart. Companies in the DOOH marketplace often got their reputation from one or

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

55

more of the following: 1. word of mouth; 2. completing highly recognizable projects


(e.g., Dallas Cowboys Stadium); 3. developing new products and innovation; and 4.
capacity to deliver based on engineering capabilities, breadth of product lines, after-sale
support, or other factors that enhanced capabilities to meet customer requirements.
Firms were often constrained by how much they could do in any given year. While
Daktronics, Mitsubishi, or Toshiba may have been able to complete two, three, or more
large-venue projects in a year, some of the smaller competitors did not have the manufacturing space, capacity, or financial strength to take on several large projects at once.

Research and Development


As product and market development were important aspects of the growth of the
DOOH industry, companies generally invested in some form of research and development. Industry leader Daktronics invested four percent of net sales into product
design and development. In comparison, some of its competitors including Barco,
Toshiba, and Mitsubishi invested 10.6 percent, 5.7 percent, and four percent of net
sales respectively in 2009 on research and development. While the industry average was
unknown, and there was no rule of thumb as to how much a company should invest
in R&D, nearly all firms in the industry were engaged in some level of R&D, whether
it was simply adapting their digital signs to new improved technologies, like better
LEDs, or a more involved process of creating new products, designs, and technologies.
Such investments were considered necessary if firms expected to merely maintain their
competitive position or sought to stay on the leading edge of the industry.

Manufacturing
The strength of a company began with its engineering and manufacturing capabilities.
Companies in the DOOH industry had to not only be able to develop and engineer quality products, but also manufacture them extremely efficiently. The downward
price pressures in the industry left very little room for firms to operate without careful
management of the supply chain, manufacturing process, quality controls, and waste
reduction.
Many of the firms in the DOOH industry tried to be vertically integrated, relying
on as few input suppliers as possible. This helped control costs and eliminate the need
for large materials inventories. It ensured that when the company needed inputs, they
were able to get them, and were not waiting on suppliers or competing with other
companies looking for the same materials. Many firms were moving to lean manufacturing as a way to increase production efficiencies, decrease waste, and cut costs.
Ultimately this would make the entire industry more competitive, and put even more
downward pressure on prices.
Quality controls were another important aspect of the manufacturing process.
Large investments were needed to meet demanding customer requirements. Companies wanted to make sure they took every step necessary to produce a reliable, durable,
and quality product, which was what the customer expected to receive.

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Case Research Journal Volume 32 Issue 4 Fall 2012

Looking to the Future


For the digital signage industry, 2010 was a year of recovery from the worst economic
decline since the Great Depression of the 1930s. As unemployment slowly declined
and consumer confidence returned, household consumption was expected to expand
and the U.S. and global economies would be on the road to recovery.
The DOOH advertising market was important as a driver of future demand for
both signage and content. Expansion in the retailing sector, hospitality, and other verticals could be expected to generate additional demand to replenish the balance sheets
of firms positioned to seize the opportunities presented by global recovery. China and
the Indian sub-continent had not been as severely impacted by the global recession
and could be expected to continue their migration to the digital advertising age.
After ten years of dramatic growth, the digital signage industry had established its
viability and whetted consumer appetites for ever-more-dynamic messaging, not only
in retailing, but in transportation, travel, and especially large sports and entertainment
venues. The number of spectators, the distances from the field or stage, and the upclose-and-personal real-time images of the action elevated the entertainment experience to new heights.
The industry also faced challenges. In 2010, the industry was highly fragmented,
disaggregated, and multi-domestic. International trade was highly constrained by the
logistics demands of transporting heavy, bulky signage around the globe. New business
models would be needed before the industry would see true multi-national competitors and consolidation of the industry beyond country or regional boundaries.
Technological development in light sources created the industry and would continue to drive its development. Other emerging technologies in materials science
(nanotechnology) and solar power could be anticipated to have future impact. The
interactivity of mobile devices with digital advertising content had just entered the
market and presented unexplored opportunity to advertisers and marketers who could
define bankable value propositions.
For those industry participants with vision, technical capabilities, market power,
financial strength, and business acumen, industry observers foresaw a very bright
future indeed.

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

57

Appendix A: Sample Promotional Flyer for Digital Advertising,


Conroe, Texas

58

Case Research Journal Volume 32 Issue 4 Fall 2012

Company

Private

Si gnCoEDS
Skyl i ne Products , I nc.
1
Sony Corpora ti on

X
X

Median

X
X
X
X

X
X

X
X

X
X

X
X

X
X

X
X
X
X
X

X
X
X

X
X
X
X

X
X
X

X
X
X
X

X
X

X
X
X
X
X
X
X
X
X

X
X
X
X

X
X

X
X
X
X

X
X

X
X
X
X
X
X
X

X
X

X
X

X
X

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

Source: Table produced by authors from company websites and company reports.

Comp any sp ecialized in one or a few ap p lications.

Rear Projection
X

Front Projection
X

X
X

X
X

Entertainment
X

X
X

X
X

X
X
X
X

X
X

X
X

X
X
X
X

Mobile/Modular

Transportation

In/Outdoor Adv.

X
X
X
X

X
X
X

X
X
X
X

X
X

X
X

X
X
X

X
X
X
X

X
X

X
X
X
X

X
X

X
X

X
X
X

X
X

X
X

X
X
X
X

X
X

X
X

X
X
X
X

Application

Commercial

M itsubishi, Sony , Panasonic, LG and Toshiba had revenues that were much larger than other firms in the

X
X

Low
X
X
X
X
X
X
X

Other

Display Technology

LED Text

industry , much of which was earned p roducing p roducts other than digital signs.

Tra ns -Lux Corpora ti on


Wa tchfi re Si gns
Young El e ctri c Si gn Co

Tos hi ba 1

Te l e gra

X
X
X

X
X
X

X
X

X
X
X
X

X
X
X
X

X
X
X

LSI I ndus tri e s , I nc.


1
Mi ts ubi s hi El e ctri c

High

Custom Displays

Ne vco, I nc.
Opte c Di s pl a ys , I nc.
Optote ch Corpora ti on
Pa na s oni c Corpora ti on 1

X
X

Public
X
X

X
X
X
X

Standardized

X
X

Hi -Te ch LED Di s pl a ys
I ma go
Le ds ta r, I nc.
Li ghthous e Te chnol ogi e s
LG El e ctroni cs 1

BARCO
Ca pturi on
Da ktroni cs , I nc.
2
Hi bi no Corp

Ada pti ve Mi cro Sys te ms (AMS)


ANC Sports 2

LED Video

Appendix B: Market Focus of Major Competitors in 2010

LCD

59

Other
X
X

X
X

X
X
X
X

Resellers
Direct
X

X
X

X
X

X
X

X
X
X
X
X
X
X
X
X

X
X
X
X

X
X

X
X

X
X

X
X

X
X

X
X

X
X
X

Distribution

Integrators

Key to Appendix B
Display Customization
Standardized (none): Products are manufactured to the same specifications in every production run.
Low Customization: Products are primarily manufactured to the same specifications across production runs with slight variations in product color, user content, or some other small variation that does
not change the basic function or operation of the display, nor the manufacturing process.
Moderate Customization: Company can manufacture products to customer specifications as far
as size, shape, color, and installation requirements are concerned. A company in this category may be
limited to the number of custom displays they can manufacture in any given year, limited in a manufacturing aspect like the display size or shape, or limited in the size of job they can complete.
High Customization: Company can manufacture or custom fabricate products to customer specifications of any kind, and are not limited in the number or size of custom jobs they can complete in a
year. The companies also do not have any type of manufacturing limitation when it comes to designing,
manufacturing, and assembling displays.

Display Technology
LED: Short for light-emitting diode, an LED is an electronic semiconductor that emits light when
electricity passes through it. LED lights are more efficient than other types of light sources and can be
used to make a variety of text, graphic, animations, and video displays, as well as other types of light
sources. LEDs can also be used to make ropes, floors, and wound to make any type of shapes.
LCD: Short for liquid crystal display, an LCD is a low power, flat screen device used to display text,
graphics, animations, and images.
Rear and Front Projection: A type of display that uses lenses and/or mirrors to project images on
a screen.
Other: DLP (Digital Light Processing) Technology, CRT technology, and Neon Lighting.

Application
Entertainment Venues: Large sports venues, small sports venues, amusement and theme parks, cinemas and theatres, fairs and expos, performing arts theatres, and casinos.
Commercial Indoor/Outdoor Advertising: Billboards, convenience and retail stores, financial,
medical, pharmacy, restaurants, gaming, hospitality, shopping, civic centers, convention centers, auto
dealers and worship.
Transportation: Airports and aviation, mass transit (bus and railways), roadways, fixed highway
signs, parking, and intelligent transportation systems.
Mobile and Modular: Concerts and staging, festivals and sporting events, auto shows, trade shows,
and award shows.
Other: Campus communications, control rooms, simulators, manufacturing, landmarks and
spectaculars.

Distribution Channels
Direct: Company direct, partners, and national accounts.
Resellers: Dealer networks, installation companies, and advertising and marketing companies.
Integrators: Consultants, architects, engineers, and project managers.

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Case Research Journal Volume 32 Issue 4 Fall 2012

Appendix C: Profile of Major Digital Signage Industry


Competitors
The following brief profiles represent the breadth of firms that competed in the digital
signage industry in 2010.
Adaptive Micro Systems, LLC, was founded in 1978 and manufactured standard LED text and video displays primarily applicable to indoor/outdoor commercial
advertising and transportation markets. The company had manufacturing and sales
sites in the U.S., Malaysia, and Europe and used an authorized dealer network to sell
its products.
ANC Sports specialized in manufacturing and selling LED video displays directly
to large sports venues. It had worked with many collegiate and professional sports
teams on custom LED video display designs. It had also worked with other LED
display manufacturing companies, like Mitsubishi Electric, to complete projects using
ANCs software and controllers that were used to power large, high-definition LED
video displays.
Barco was a leading global technology company that designed and sold visualization solutions for a variety of markets including the digital-out-of-home (DOOH)
industry. Its manufacturing sites in Europe, North America, and Asia-Pacific built
standard and custom LED video displays as well as LCD and rear- or front-projection
displays. Barco had sales offices around the globe and also sold to customers through
resellers and system integrators.
Capturion was a privately owned multi-format LED video display company based
in Laurel, Mississippi with manufacturing facilities owned and operated in Asia. It was
striving to advance its indoor and outdoor products towards a better, greener LED
system.
Daktronics was considered by many to be the industry leader in manufacturing
LED displays. In business since 1968, the company had products installed in nearly
100 countries. Daktronics manufactured a wide variety of custom and standard LED
text and video displays as well as LCD screens. Daktronics used a vast dealer network
as well as selling its custom products directly and through system integrators.
Hibino Corp., in business since 1964, manufactured LED video displays primarily for use in mobile and modular applications. The company reported it could custom
design and construct completely mobile audio visual systems for nearly any event.
Hibino sold directly to its customers.
Hi-Tech LED Displays had been manufacturing electronic displays since 1984.
It mostly manufactured standard LED text and video displays for a variety of applications, but also manufactured some custom displays. Hi-Tech sold primarily to U.S.
sign installation companies, but also sold directly to customers, and had completed
projects world-wide.
Imago (Odeco Electronica in Europe and ADDCO in U.S.) had offices and partners around the world. Its assembly plants in Europe, North America, South America,
and India manufactured a variety of standard LED text and video displays. Imago was
best known for its intelligent transportation systems, but also did some low-end custom LED displays. The company sold through integrators and resellers to customers.

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

61

Ledstar, Inc., specialized in manufacturing LED text variable message signs (VMS)
for transportation applications since 1988. The VMS used on highways across North
America provided information to motorists. Ledstars products could be purchased
directly from the company.
LG Electronics, located in Korea, was established in 1958. Globally, it had 9.4
percent of the LCD TV market and 13.5 percent of the flat panel TV market in 2010.
It had leveraged its TV capabilitiesincluding high definition (HD) TVinto commercial products for the public venue market as well as many other market segments,
including healthcare, transportation, education, financial, retail, hospitality, quick service restaurants (QSR), food services, government, and small business.
Lighthouse Technologies offered a line of LED text and video displays for almost
any application. The company had sales offices around the world and was recognized
for its custom mobile and modular units, as well as some of its displays in large sports
venues. Lighthouse was known as one of the industrys leading companies for new
products and technologies. The company sold direct and through systems integrators
to customers.
LSI Industries entered the DOOH industry with its 2006 purchase of SACO
Technologies, Inc., of Montreal, which gave it the ability to produce large-format LED
displays. The company manufactured LED text and video displays and LCD displays
for nearly every application. LSI also had the ability to design and manufacture custom
displays and sold them direct and through integrators and resellers.
Mitsubishi Electric rated in 2009 as the worlds 215th largest company by Fortune
Global 500, manufactured standard and custom LED text and video displays, and a
variety of other products. It had sales locations around the globe and was capable of
manufacturing some of the largest custom LED video displays through its subsidiary
Mitsubishi Diamond Vision. The company sold its products through several distribution channels including direct and through partners, resellers, and system integrators.
Nevco, Inc., manufactured its first scoreboard in 1934, and had been considered
the largest private scoreboard manufacturer for some time until Daktronics displaced
it. Most recognized for its LED scoreboards. The first also manufactured LED text and
video displays. Nevco was capable of small custom scoreboard designs and sold directly
to end users and integrators mainly in North America, but also around the world.
Optec Display, Inc., in business since the late 1980s, primarily manufactured
standard outdoor LED text and video commercial advertising displays. It used manufacturing sites in the U.S., China, and Taiwan and had a 300+ dealer network that sold
its displays primarily in the U.S., with some global sales.
Optotech Corporation, established in 1983, manufactured both standard and
custom LED text and video displays for a variety of applications, its best known being
digital billboards. It also made LCD screens and other products. It had locations in
Taiwan and China, as well as sales locations throughout the world. To sell its products
Optotech used resellers and integrators, but also sold directly to the customer.
Panasonic Corporation, headquartered in Japan, was one of the largest electronic
product manufacturers in the world, comprised of over 634 companies. The company offered a wide range of digital signage solutions, from all-inclusive bundled solutions, to custom-designed enterprise networks. Panasonic provided hardware, software
installation and support for its customers.

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Case Research Journal Volume 32 Issue 4 Fall 2012

SignCoEDS manufactured signage for sports and commercial applications. It


manufactured LED text and video signs as well as LCD video walls and DLP (digital
light processing) displays. SignCoEDS primarily used a dealer network to sell to customers, but also sold through integrators when doing custom projects.
Skyline Products, Inc., manufactured LED text displays primarily for the transportation industry. Skylines VMS provided information to travelers on highways and
as a part of intelligent transportation systems. Skyline also manufactured renewable
energy sources and did aluminum fabrication. Skyline products could be purchased
directly from the company.
Sony was a Japanese multinational conglomerate corporation headquartered in
Tokyo, Japan. Convergent Media systems, a Sony company, developed Prodokol, a
fully managed, end-to-end, digital signage platform. Prodokol supported applications
such as interactive touchscreen, digital menu boards, and single display or multidisplay signage. Its leading managed solutions were banking, retail and quick service
restaurants (QSR).
Telegra was a leading manufacturer of advanced traffic management systems for
roadways, tunnels, and other transportation applications. It had manufacturing sites
in Croatia and the U.S., as well as sales sites around the world. The company reported
the ability to custom design transportation systems for nearly any application and sold
directly through integrators and resellers to customers.
Toshiba, rated in 2009 as the worlds 97th largest company by Fortune Global,
manufactured a variety of standard and custom LED text and video displays, LCD and
plasma screens, rear- and front-projection screens, as well as a number of other communications and electronics products. Toshiba sales locations around the globe sold
products for use in a variety of applications. Toshiba sold direct, and through system
integrators and resellers around the world.
Trans-Lux Corporation manufactured standard and custom LED text and video
displays as well as LCD and plasma screens for a variety of applications. Trans-Lux had
locations across North America and the globe to sell its products. Trans-Lux worked
with resellers, partners, and integrators to sell its products to customers.
Watchfire manufactured standard LED text and video displays for the commercial indoor/outdoor advertising market. The companys products were manufactured
completely in the U.S. and were sold through a dealer network to customers across
North America.
Young Electric Sign Company (YESCO) started building custom signs and displays in 1920. The company manufactured LED text and video displays as well as
other different styles of signs, and was often featured on the Las Vegas strip. YESCO
had several manufacturing and sales locations in the U.S. capable of custom building
many styles of signs. It sold directly, and through resellers and integrators.

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

63

Notes
1. Hendon, Donald W. and William F. Muhs, Origin and early development of
outdoor advertising in the United States. Journal of Advertising History, 9(1),
1986, 717.
2. Burma Shave signs dotted the landscape along the nations two-lane highways
from 1926 to 63, while the Bloch Brothers Tobacco Company of Wheeling,
W. Va., manufacturers of Mail Pouch Tobacco, began painting barns with their
roadside messages in 1890.
3. Lady Bird Johnson, wife of President Lyndon Baines Johnson, is largely recognized as the force behind passage of the 1966 Highway Beautification Act that
strongly regulated signage on Federal highways.
4. By 2000, Liquid crystal displays (LCD) replaced cathode ray tubes (CRT) in
television and other display screens and in small consumer electronicsvideo
players, clocks, watches, instrument panels, and small signsas they were more
energy efficient. However, as they had no power source, they had to be arrayed
in front of a light source (backlit). Light-emitting diodes (LED) supplanted
LCDs as they were an even more energy efficient light source, smaller, provided extraordinary color range, radiated little heat, and had extremely long
life, among many positive characteristics that made them highly flexible for use
in a very broad range of lighting applications, including outdoor and indoor
signage.
5. www.nsr.com, Global market and digital signage. May, 2008.
6. Credit Union Times, Before you buy, know how to kick the tires of a digital
signage system. November 4, 2009, v20, 144, p. 201(1).
7. IBISWorld, Industry Report, Billboard & Sign Manufacturing in the U.S.: 33995,
July 07 2008, p. 23.
8. Xinhua Economic News, Chinas outdoor digital display market to boost:
Analysys International. March 6, 2009, p. NA.
9. Wireless News, November 1, 2008, MultiMedia Intelligence: Digital signage
market growth continues as IP drives next generation advertising, p. NA.
10. Investment Weekly News. The research, Think Narrow, Win Large: Advertising,
Analytics, and Applications in Digital Signage discusses new trends in digital
signage as witnessed in 1Q2009. August 22, 2009, p. 454.
11. www.seesawnetworks.com, Global digital out-of-home media forecast 2008
2012, published by Northern Sky Research, Cambridge, MA 02138.
12. AsiaPulse News, Samsung enters Japans digital signage market, July 3, 2009,
p. NA.
13. www.digitalsignagetoday.com. Digital signage industry prognostications for
fall 2009. Ken Goldberg, September 29, 2009.
14. Ibid.
15. IBISWorld, Industry Report, Billboard & Outdoor Display Advertising in the U.S.:
54185, November, 2010.
16. www.seesawnetworks.com.

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17. www.nsr.com, Global Digital Out of Home Media Forecast 20082012, published by Northern Sky Research, Cambridge, MA 02138.
18. www.nsr.com, Ibid.
19. NAICS Code 33995 (Billboard & Sign Manufacturing in the U.S.), SIC Code
3993 (Signs & Advertising Displays), and NAICS Code 54185 (Billboard &
Outdoor Display Advertising in the U.S.)
20. IBISWorld, Industry Report, 2008, p. 8.
21. Ibid., p. 10.
22. Wireless News, 2008, p. NA.
23. Ibid., p. NA.
24. Wireless News, November 2, 2009, Research and Markets Adds Report: Global
Digital Signage Market: 2008 Edition, p. NA.
25. Internet Wire, June 12, 2008. The study was commissioned from OTX by SeeSaw Networks, a company that offers extensive DOOH media.
26. Digital Signage Magazine, Landmark digital signage: Walgreens goes big to
stand out in the digital signage capitol of the worldTimes Square. February
2009 v5, i1, p. 14.
27. www.digitalsignagetoday.com, Digital signage: The top 10 trends for 2010,
Part 1 & 2, Keith Kelson, December 2930, 2009.
28. www.digitalsignagetoday.com, 5 great digital signage moments in 2009. Bill
Yackey, December 23, 2009.
29. www.digitalsignagetoday.com, Kelson.
30. Dwell time is a term for audiences that are captive and thus available for
exposure to advertising messaging for a longer duration. Examples are bus and
train riders, and passengers waiting in terminals and boarding lounges who
experience significant sit time.
31. www.digitalsignagetoday.com, Yackey.
32. www.digitalsignagetoday.com, Kelson.
33. Digital signage magazine, Flat is the new up? Think again . . ., February 2009,
v5, i1, p. 5.
34. IBISWorld, Industry Report, Billboard & Outdoor Display Advertising in the U.S.:
54185, December 29, 2009, p. 30.
35. www.digitalsignageexpo.net, Platt Retail Institute announces quarterly digital
signage industry index, November 17, 2009.
36. IBISWorld, Industry Report, 54185, 2009, 20.
37. www.digitalsignagetoday.com, Kelson.
38. www.digitalsignageexpo.net/DigitalSignageExpo/ExhibitorsList.aspx.
Lists
2010 Exhibitors as of January 5, 2010.
39. www.digitalsignagetoday.com, Kelson.
40. Sound and Video Contractor (Online Exclusive), April 22, 2008, p. NA.
41. GlobeNewswire, Wireless Ronin completes digital signage installation at home
of NHLs Minnesota Wild, November 4, 2009.
42. www.digitalsignagetoday.com, Kelson.

Daktronics (A): The U.S. Digiatal Signage Industry in 2010

65

43.
44.
45.
46.
47.
48.
49.
50.
51.
52.

53.
54.
55.
56.

57.
58.
59.
60.
61.
62.
63.
64.
65.

www.digitalsignagetoday.com, Goldberg.
Ibid.
www.semi.org/en/IndustrySegments/LED/ctr035763.
IBISWorld, Industry Report, 33995, 2008.
IBISWorld, Industry Report, 54185, , 2010, p. 20.
Ibid.
Ibid.
Investment Weekly News 2009, p 454.
IBISWorld, Industry Report, 33995, 2008, p.1920.
Nichols, Christopher L., Billboard Sign Regulation: Recent Cases and Trends.
Paper presented to the Texas City Attorneys Association, June, 2011, South
Padre Island, Tx.
For updated information, visit the website of Scenic America. www.scenic.org/
billboards/digital.
Planning, Sign World: What other nations can teach us about sign control,
Jeff Soule, FAICP. July, 2010.
www.americancityandcounty.com, Dim your sign, please: Cities adjust ordinances to regulate digital billboards, Peter Barnes, August, 2009, p. 19.
http://www.amberalert.gov/about.htm. The AMBER Alert System began in
1996 when Dallas-Fort Worth broadcasters teamed with local police to develop
an early warning system to help find abducted children. AMBER stands for
Americas Missing: Broadcast Emergency Response.
IBISWorld, 54185, 2009, p. 35.
Ibid.
IBISWorld, Industry Report, Billboard & Sign Manufacturing in the U.S.: 33995,
August 2010, p. 5.
IBISWorld, 54185, 2009, p. 3637.
Below-the-line advertising referred to advertising by means other than the five
major media (newspapers, magazines, television, radio, and outdoor).
North American Digital Signage Index (2009), Vol. 1, Issue 1, pps. 1820.
Platt Retail Institute.
www.nsr.com.
Sound & Video Contractor (Online Exclusive). Expert viewpoint: Digital signage trends, June 2, 2009, p. NA.
Based on presentation by Chairman of the Board, Daktronics Corporation,
Annual Shareholders Meeting, August, 2009, Brookings, South Dakota.

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