Sometimes, we all get lost in the weeds, so engrossed with what we are doing, hearing and reading that we lose our sense of the big picture.  This is especially true during the trade show season that we are in the midst of right now, with the tweets, blogs, press releases and contrived buzz reaching new levels of oppressiveness.  Taking a step back from all the tumult, the digital signage landscape is filled with contradictions.    To a certain extent, that seems to be a symptom of a fragmented industry struggling to find its own identity, even as it grows at a high rate.  At the same time, it is also the result of  a great number of dissonant messages from all over the landscape, attempting to define what is important.  As an industry insider, I sometimes get distracted and confused.  I can only imagine what newcomers have to deal with.  Here are two examples of conflicting messages, and an atteempt to reconcile them.

Consider the simple concept of capital.  Few will argue the fact that deploying a digital signage network is a capital-intensive proposition.  Capital, whether it be from angels, venture firms or private equity shops, has been very difficult for network owners to access for nearly 18 months now.  I can think of several high quality projects that are “stuck” in the capital formation process.  I am sure there are many more that I am unaware of.  The trickle down effect of slow capital formation impacts all of the companies that would provide products and services to those networks, throttling their growth in the process.  Conversely, we have witnessed increased investments made by several very large technology companies in the space during the past year.  The exploits of Intel and Microsoft have been well-chronicled.  NCR bought into the space.  Oracle appears to be dabbling.  NEC fancies themselves as software developers now (or should I say “for now”?) Cisco has been in the space for years, and is redoubling efforts to be noticed.  What do the technology bigs see that investors do not see?  Interestingly, I think they see the same thing, but from different perspectives: high growth, huge upside and a fragmented marketplace.  The tech companies have the luxury of placing bets on themselves.  But the angels and venture capitalists have to place their bets on others, and they are apparently finding it easier to fill out their NCAA brackets than to project the winners in each sector.  I am told that there is quite a bit of capital on the sidelines, but all we have seen lately is some bottom feeding.  Perhaps the actions of the big technology companies are a leading indicator of bigger bets being placed by traditional funding sources.

Then there is the area of content, coronated long ago and probably too many times as king.  The basic tenets of digital signage content - to inform, to engage and to be relevant - are reasonably well understood and accepted.  The level of execution of those concepts varies widely from network to network, and it seems pretty clear that even after years of evolution, few have mastered the one-to-many art form of a digital signage content strategy.  Yet just as conference agendas and consultants finally begin to focus on digital signage content, we are witnessing a rush into mobile interactivity as a linchpin of content strategy.  This constitutes a leap of the content chasm directly to one-to-one messaging.  No one should doubt the power of the smartphones sitting in so many palms, pockets and purses.  It is obvious that in most environments, extending the customer/viewer interaction to a mobile device and perhaps even to a home computer is sound thinking.  Still, the rush to mobile in many cases comes off as a “me too” strategy, taken on by many networks who have yet to formulate a basic content strategy.  Questions abound.  Is content still king?  If so, what is on the digital signage screen when your viewers have their heads down, waiting for a web page to load or an SMS message to appear?  Are you ceding the task of engagement to a 3-inch screen?  Is user-generated content relevant outside of bars and concerts? How do we compete for mindshare?

Traditional funding sources have become a bit gun-shy on digital signage, while established technology leaders are making big investments in the space.  Network operators and industry wonks are finally paying more attention to developing a thoughtful content strategy, while those same people are chasing mobile strategies with a shotgun approach.  How do we reconcile these conflicting indicators from the two cornerstones of a healthy digital out-of-home media industry, capital and content? Here’s my take:  First, money talks and money attracts more money.  The dam is going to break soon, else the money on the sidelines may miss a big opportunity.  Second, content is still king, and digital content exists on a continuum.   Digital signage will embrace the mobile channel, not become consumed by it.  It will just take time for this to look seamless. 

Let's take a break from the drama surrounding the DSA and DSF, which received enough attention over the past week. I'll have some new thoughts on that later this week or next.

The real news is that the Digital Signage Expo (DSE) was held last week in Las Vegas and continued its own growth and maturation, matching that of the industry it serves. The exhibit hall was lively and featured many newcomers. The sessions received generally good reviews, to which I can add nothing since I never left the floor. Attendance seemed strong, despite the tough economic conditions.

Thankfully, most of us managed to escape Lost Wages before the NASCAR fans outnumbered us. Someone mentioned that the Motorcoach Conference, which shared the North Hall with DSE, will have their 2011 show in Tampa. Now that is an idea I could really get behind! In monitoring the Twittersphere during and after the show, I saw a few recurring themes. Each is worth looking at in a bit more detail, as they are indicators of where we are and where we are going as an industry.

The first theme was a general complaint that there was too much technology sameness out there, both on the hardware and software sides. The question of "how are you different?" is a legitimate icebreaker, and without doubt some people answer that better than others.

From a software perspective, let's back it up to the basics. At the highest level, what most of the software solution providers are trying to do is to enable centralized distribution of content over a network, with scheduled and managed playout of that content at the various end points of the network. Yes, there is a very significant amount of nuance in terms of how one can do that, and how elegantly one manages the the core functions of content management, network management and operations management. As a viewer at the end point, it should be very hard to discern how the pixie dust was sprinkled to make it happen.

What ends up separating one offering from the next is usually features, rather than functions, and solution providers have developed lots of features that add some sizzle to the steak. Features are ideally a reflection of customer demands, and as such, solution developers consciously or subconsciously steer their feature sets toward their core. This in turn results in more focused and specialized offerings, and a self-selection of "what makes you different".

In the end, what will differentiate technology providers will be their effectiveness in identifying and serving core markets. Solution providers that try to be all things to all people will not ultimately succeed. Focus is good, and focus will drive consolidation.

The second theme was a bit of a backlash against software as a service (SaaS). Interestingly, SaaS has driven the growth of networked digital signage, enabling network owners to focus their resources on site acquisition, content strategy and in some cases, ad sales. As networks grow, those SaaS fees become a bit more meaningful.

There is always a crossover point at which the investment in an enterprise licensing scheme, as well as the attendant internal IT resources, becomes financially feasible. Buyers seem singularly focused on SaaS fee schedules, perhaps to their own detriment. While average SaaS pricing has fallen in the past three years, that has clearly been more of a competitive response than one driven by scale.

The growth in deployed networks has been spread around to so many vendors that reduced pricing has only served to drive break-even deployment points higher. Fragmentation and competition, rather than economic reality, have driven pricing behavior that will act to thin the herd over time, as steadily lower SaaS prices will put pressure on providers in terms of their ability to serve their customers and to continuously enhance their products. That is not a good situation for buyers or sellers.

I believe that successful solution providers will do two things well. First, they will be able to justify and sell SaaS priced in a manner that allows them to operate profitably and effectively (see comments on focus above). Second, they will provide a path to an enterprise license for their customers who "outgrow" SaaS as well as an enterprise offering for those that require it from the start. SaaS has not lost its broad appeal, especially in a marketplace where so many potential buyers do not have IT resources. But look for licensing flexibility to become as important as cost moving forward.

Finally, I experienced, read and felt a theme of community that was unlike any previous industry conference. The Tuesday night Preset Mixer (thanks again to the Preset folks and their generous sponsors) came off exactly as the planners had hoped. It was an opportunity to reconnect, get energized for the days ahead and to find common ground, if only for two hours. Terrific.

While I missed the Wednesday DSE reception, I was told that it was also very good, although not as cozy as the mixer. At the show, we experienced a near disaster involving display mounts for our new booth. To make a long story short, Amy Moss of Peerless saved our bacon, driving us to one of her local customers so we could buy the exact mount we needed. At the same time, one of our customers, Mark Pickard, appeared out of nowhere with a tool box (he was there to assist his wife's company), and helped us drill new holes for the mounts. Somehow, the displays were up and perfectly aligned at 10:05. Thanks, Amy. Thanks, Mark.

Also at the show, I saw several examples of vendors referring leads to other vendors rather than trying to make a square peg fit into a round hole. More proof that miracles do happen. Glimpses of compassion, respect and community. Wow, we may really be headed for greater things here!