The recently announced acquisition of SignStorey by CBS has many ramifications for the narrowcasting industry, most of them positive.
For starters, we get a nice glimpse of some valuation metrics for a network operator like SignStorey. Published reports indicate that SignStorey has deployed over 1,400 displays in a defined category (grocery), reaching an estimated 72 million shoppers monthly. The purchase price of $71.5 million conveniently equates to one dollar per viewer/month. A nice price, and the reward for SignStorey’s laser focus on the channel. Whether they were profitable or not may not have mattered in CBS’ calculations. They are, at their core, a media distribution and ad sales machine. The SignStorey grocery network offers them a way for their salespeople to extend campaigns from billboards to homes (TV) to the point of purchase. In marketingspeak, a line extension. Add to that the ability to promote the wares of the mother ship, and you have a nice potential ROI story. CBS and SignStorey had been working together for some time, so both sides got the opportunity to assess the match as partners.
The entry of another media giant into the market will only accelerate innovation, adoption and consolidation in all aspects of the emerging narrowcasting space. To the extent that more partnerships, more M&A activity and more investment are driven by CBS’ entry, then in the long run this deal may prove to be as impactful, or even more so, as the PRN deal.
It appears that the move toward the corporate phase of the narrowcasting market is upon us. In the course of industry maturation, entrepreneurial companies like SignStorey and PRN get absorbed. Sometimes that alters their mission and their team, but that can be the price of success. What can be learned from studying their rise, their acquisition and their subsequent performance as part of something bigger is always valuable. Often, it can be the inspiration for the next wave of innovators and entrepreneurs, which is always a good thing.