We have seen a number of industry articles and blog entries recently addressing the actual cost of implementing digital signage. In fact, there are so many variables, some of which are more controllable than others, that it is hard to generalize with any accuracy. Rather than join the fray and discuss whether implementation costs have gone up or down, or whether display prices will continue to drop, perhaps it is best to offer a template for assessing how much benefit in terms of ad revenue, increased sales and margin dollars, or soft benefits one must derive to get ROI on a digital signage investment.
Digital signage deployments take many forms, but in general the costs can be categorized as CapEx and ongoing operational fees. (As an aside, most CapEx items can be bundled into a typical lease deal, and sometimes certain prepaid expenses can be as well. See your accountant and leasing specialist for details.) If the CapEx items are not leased, it is good practice to impute a monthly cost of capital when determining breakeven and ROI calculations.
A quick review of the cost buckets:
Displays: Of course your media has to play out on a display. This can range from 10-inch LCDs to 60-inch plasmas to plain old tube monitors. Your choice and cost will depend on your objectives, budget and environment. The cost of popular flat screen displays continues to drop quarterly.
Display Mount: Unless you use a display with an integrated stand, and have a place to put it, you will probably require a wall mount, or a floor/ceiling display stand with integrated mount. Your cost will be vary depending upon the display size, mount type and environment.
Media Player: The media player is the playout device for your digital media. RDM’s approach is a dedicated, purpose-built media player appliance running an optimized version of an established operating system. Most others use off-the-shelf PCs, running off-the-shelf operating systems, replete with their management and security issues. Some even have a neat optical disk, in case you want to take a step back into the 90’s and use a DVD! Caveat emptor.
Player software: Most solutions require software to be purchased and installed on the media player. We have taken the liberty of filling in the RDM column here: $0. Our players are shipped complete with embedded player firmware, and require no additional software to operate out of the box.
Player Mount: In many environments, it will be convenient and aesthetically pleasing to mount the media player to the back of the display, as many of our customers do. Of course if you are running a PC bigger than a toaster, that may not be possible.
Broadband installation/hardware: Whether you choose DSL, satellite, cable or wireless, there are generally installation and provisioning charges, and often some hardware, such as modems, cards, and/or dishes to be purchased.
Shipping: You will need to consider the cost of shipping your media players, displays and other hardware to the installation site. If you receive them centrally, there may be two charges to consider.
Site and/or Central Server: Many solutions require more than just a media player on site to make the “system” work. Some require site servers (and additional software); others require central servers to be bought and maintained (as well as additional software); other require both. RDM requires neither. Our hosted software application, the NEOCAST Media Server, is a software-as-a-service (ASP) offering, and our Media Players do not require site servers. As an option, we do offer the NEOCAST Edge Server, which can be useful in managing bandwidth usage at sites with many players, or when used centrally to manage WAN security.
Server Software: See above
Software Subscription/Support: For hosted applications such as RDM’s NEOCAST Media Server, there is generally a per player, per month subscription fee. This should also cover support. RDM does not charge for additional maintenance on the Media Server application. If you select a solution with enterprise software licensing, there would be no monthly subscription, but there would be accrued maintenance costs.
Installation and Cables: Actual installation is an important cost to consider. There are a number of firms able to efficiently conduct national rollouts on whatever schedule your budget dictates. Costs will vary depending upon location, size and number of displays per site, and complexity of the technical solution. RDM’s near plug-and-play simplicity can help mitigate labor costs at deployment time.
Player Maintenance: Fee charged for maintenance of the media player. In RDM’s case this nominal fee includes the cost of the standard warranty as well as firmware maintenance/upgrades and patches.
Content Development/Acquisition: Perhaps the most variable cost of all, depending upon choices made. Content is king, and should be aligned with objectives. It can be purchased, repurposed from other media, or developed from scratch. Have a plan and a clear understanding of costs before you start. RDM offers a variety of AccuWeather content in both video and graphical formats on a per player, per month basis. Many customers have found weather content in particular to be very “sticky” and always topical.
Network Management Services: If you choose to operate your network (manage content, develop playlists, distribute content, monitor network, extract reporting, etc.), there will be an implied cost to the people applied to this task. If you choose to outsource these tasks, there are generally monthly fees to consider, which can be fixed or variable. RDM offers full Network management Services as an optional service to its customers.
Broadband Access: The monthly cost for the internet “dial tone” at your deployed sites.
You can use and embellish this model as your situation warrants. In any case, it is helpful to understand where the costs are, how different technical solutions drive those costs, and what kind of benefit you will need to generate in order to get ROI.
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