The summer is receding as fast as it arrived, children are back in school, and oh yes… the football season is upon us. As always, the kickoff of the football year serves as the signal to launch the prediction cycle for digital signage. Like the annoying kid in fifth grade who waved his hand to answer every question, the need to be first is an apparent character flaw. But at least I’ll be on record, for better or for worse, before the onslaught of predictions at year end.
Before looking forward, a look back at last year’s predictions is always in order, reveling in the accurate ones, and owning the losers. So here they are:
A Fall event is cobbled together: This one came true as Dpb Media Week has emerged as a broadly programmed and widely attended event. While it still lacks a true Organizing Committee that would allow it to be even more spectacular, there is little doubt that this will become a fixture.
No Pi In The Sky: While there is plenty of talk about low cost devices, the only one featuring the Raspberry Pi clocks in at about $400. It would be hard to argue that The Pi has taken a slice of the media player business to this point. More on this later.
Streaming is not Dreaming: Well, apparently it still is a dream. Things are moving in the right direction, but slowly. Missed on that one.
Big Deals Define The Landscape: I was looking for a big number of new, corporate network deals to come down. While there have been a few of note, most have been network refreshes or re-platforms as opposed to new networks. We’ll be tough on the grading and say this was a miss.
Consolidation? It Depends: This one was right on. Vendor consolidation was a no-show, while there was some shrinkage as companies like Symon and EK3 were acquired by network operators. The real action has been in networks, led by the realignment of most of CareMedia’s network assets.
Advertising: Something has To Give: The plum remains in the pie, as the technological approaches to ad buying have continued to sputter. There is still some gold in those hills, but models must evolve. We’ll own the miss on this one.
Big Money? It is waiting at the Exits: I’ll call this one a push. There have been two big exits of note (Symon and EK3), but on the vendor side, not the network side. But there was not big institutional movement in 2013, so that part seems accurate. See #7 below for more on this.
Summary: a 3-3-1 record is nothing to brag about, but no guts, no glory. This year’s predictions take a few more chances, so read on and feel free to comment.
Here are 7 predictions for ’14. Numbers don’t get much more football than that.
1. Collateral damage: There will be at least two business failures of note in 2014, driven in part by the falling rates for both advertising and SaaS subscriptions among the undisciplined and the desperate. Network operators and software providers will learn the hard way that once you drop prices, you can never go back. I am not referring to the practice of selling remnant ad inventory at bargain rates, or the natural (but moderate) downward trend of subscription prices. What we have started to see in the past 12 months are examples of dramatic rate cutting that can only point to a downward spiral. It is unhealthy for all involved. Networks caught in that situation will likely be able to sell their assets at pennies on the dollar to their more disciplined competitors. Software vendors trying to buy love won’t be so lucky.
2. Android profusion turns to Android confusion: There will be plenty of Android tests in the coming year, but adoption will not be as swift or as wide as some would have you believe. One challenge is that the Android media player market is headed for the same type of fragmentation from both a hardware and software perspective that the mobile industry has dealt with. Testing and support costs will provide some whiplash for vendors as well. Android efforts will represent a separate branch of a vendor’s code stream, driving development costs higher as well, if the vendors choose to keep pace with their core products. Serious buyers will be very cautious and concerned with reliability, remote capabilities, root level control and roadmap. There is a better way, which will become clearer next year.
3. Big guys do some rethinking: Perhaps the biggest vendor splashes of 2013 were Samsung’s SoC introduction and Intel’s software dalliance, nee RCM. In 2014, we are likely to see Samsung alter its approach in one of two ways. It will either change the SoC architecture to be more friendly to mainstream content management systems, rather than forcing a trimmed down version; or it will move forward with its own software offering to the dismay of certain partners. In either case, the next model year will most likely include a more capable chipset. From all reports, the product is not gaining traction commensurate with the dollars being spent on marketing and recruiting. Could it be that software matters? Which leads us west to Santa Clara, where Intel will find the sledding a little tough with its RCM venture. I don’t know about you, but I never buy my dip from the company that makes the chips. Look for them to announce a pilot with a big name and very little else in 2014. Rational thought will prevail and they will search for a graceful way out. In the mean time, enjoy the cocktail events.
4. HTML begins a steep ascent as Flash continues its descent: This one seems pretty easy. No one, including Adobe, will mourn the death of Flash. For most, it cannot come soon enough. As we near the fourth quarter of 2013, many shops are learning how to create dynamic content using HTML, and that will bear fruit in the coming year. HTML has some baggage of its own, but as more and more content developers get smarter and tools become more widely available, the end game will be positive for everyone.
5. Analytics finally become important: For a long time, data and digital signage only seemed to converge at the reporting function of the management application. Data only seemed to matter to advertisers needing to verify their purchases. As 2014 unfolds, we will see marketers (especially in larger retail environments) clamoring for data that helps them get smarter about how to create, schedule and deploy content. I remain fully convinced that the smart people at DS-IQ were on to something many years ago, well before the market demanded it. They knew that insights derived from mashing up digital signage playout logs with POS movement data and external data could both justify ad rates and move merchandise. They were right, and have the data to prove it. Now the market is starting to demand data driven insights. DS-IQ and others will be there to deliver.
6. Size matters: Two years ago I predicted (with minimal accuracy at the time) that endpoints would take on different sizes and shapes. While some progress has been made with shapes, the move toward varied and smaller sizes has been somewhat slower. I believe that will change in 2014, as venues make use of both large format and small format displays to present varied messages with different objectives, audiences and engagement strategies. Multi-screen displays will continue to pick up momentum, and small will be the new big.
7. New models emerge: Following the initial success of RMG Networks’ IPO, there will be additional attempts at creating new business models in the hope that one plus one equals something greater than two. If there is one thing you can make book on, it is that when a business model creates exits at multiple levels like RMG did, it will spawn attempts to do it bigger, faster and stronger. Investors, particularly institutional ones, are particularly adept at jumping on bandwagons and will have money ready for the next big idea, with the emphasis on big. Many will be lurking at the upcoming DailyDOOH Investor Conference in October. When the smoke clears, we may have a number of new and large entities with models that are unlike those of their predecessor companies. There will be some interesting dinners in 2014.
Things are just starting to get fun, so let’s all have a busy and productive fourth quarter and bring on 2014! Leave a comment and pick on me or provide your own predictions, and we’ll revisit it all next September. Until then, Happy New Year.