Sadly enough, with the drop in the market we’re seeing the resulting wave hit just about every industry, including digital signage. The recent bailouts may help ease the hurt of what surely is coming, but it seems more like a band-aid remedy for a mortal wound. Although the industry is still experiencing phenomenal growth, it would appear the growth is following an 80/20 rule. That is, eighty percent of the sales are being made by twenty percent of the companies. We can see that some companies have seen the result of such stiff competition.

LocalVision, the Olympia, WA based digital signage company, headed by entrepreneur Jim Coran recently shut its doors. As a small company seeking to aggregate networks, gain clients by reselling Broadsign, the LocalVision crew just didn’t have enough revenue to shake the expenses of running a very asset intensive digital signage company.

Others have been more lucky, perhaps due to the size of capital backing their failed signage system. Well, not necessarily failed, but struggling.

Wireless Ronin is seeking for a new CEO, while Planar Digital Signage is looking to sell. It seems like a frantic move on the part of both parties. Are these companies casualties yet? Probably not, but unless some drastic changes and/or sales are made on the part of both companies, investors may seek to cut their losses before they run too deep.

It is also interesting that every trade show I attend, I see several new companies who’ve apparently popped up since the last show I attended. I think it was Andew Carnegie who said, “when my shoe shine boy starts telling me which stocks to purchase, I start selling my shares.” In this instance, that may seem a bit drastic, but it’s a very good stance to take to avoid risk. If you can make it through the fray, then you’ll last forever. The casualties have just begun. Before it’s over, we’ll see a few more.

Nate Nead

1. 

   Stuart Armstrong

   October 5, 2008 at 3:03 pm

   Nate,

   Although the financial crisis certainly has not helped, I believe what we are seeing in the Digital Out of Home (aka Digital Signage) space is an enviable shake out that typically occurs when a nascent industry begins to turn the corner from boutique to professional. I think that Adrian Cotterill at the Daily DOOH said it well, “Some people in the industry are calling what’s happening at the moment a period of consolidation whereas to our mind this is all more of an aggressive industry shake-out where only the bold, well-financed, sensible business model and good cash flow businesses will end up surviving.”
   http://www.dailydooh.com/archives/4099

   With that said Nate, I do read your blog as a source of insights and appreciate your contributions and the ability to create important industry dialogues.

   Sincerely,
   Stu Armstrong
2. 

   Nate

   October 6, 2008 at 12:46 am

   I am in complete agreement. It may be a bit shaky at the moment, but it’s been interesting to see some early what we may call “casualties,” but it may just be necessary restructurings that will benefit more long term objectives.