Synopsis of

Digital out of home media industryMay 2011

Research aims

Definition and fragmentation

Industry performance

What we can expect in the next two years

What we can learn from others

Definition and

fragmentationfragmentation

Definition

Out of Home Digital Media is the

frontier between television, the

internet, mobile, interactive

terminals and the traditional

billboard or poster.

http://en.wikipedia.org/wiki/Out-of-home_advertising

2 categories of dooh

Digital Place Based Networks (integrate targeted

entertainment and/or info programming with ad pods

narrowcast on digital video screens)

Digital Billboards/Signs (advertising-only messages

through screens equipped with LED or LCD techs)through screens equipped with LED or LCD techs)

http://en.wikipedia.org/wiki/Out-of-home_advertising

fragmentation

Fragmentation in US market

http://www.coadydiemar.com/html/mm_volume6_2011.html

Industry fragmentation

Players (220) Types Key geographies (4)

Emergingmarkets (16)

Categories Delivery

CBS Outdoor

Clear Channel

Neo Advertising

Zoom media & Marketing

Brand Connections

Gas Station TV

NBC Everywhere

Network Operators

Aggregators

Speciality agencies

Venues

Brands

Americas

Middle East / Africa

Asia Pacific

Europe

US / Canada, Mexico

Brazil

UK

Germany

France

Spain

Italy

Russia

D. Place-based (DPN)

D. outdoor (DBB)

Cinema

Retail

office

entertainment

transit

Microtiles

LCD

LED

Organic LED

Wi-Fi

Cellular 3G

WAP

QR CodesNBC Everywhere

Premier Retail Networks (PRN)

RMG Networks

Cemusa Inc

CNN Airport Network

rVue

Seesaw Networks

AdCentricity

...

Russia

Japan

China

South Korea

Australia

India

Middle East & Africa

transit

roadsideMobile apps

Bluetooth

SMS

NFC

3D

SaaS or ASP?

Dynamic, fragmented, and rapidly evolving space

http://dse-365.ascendeventmedia.com/ExhGuide.aspx?p=64#1512

Venue granularity

Further granularity can be applied

http://www-958.ibm.com/software/data/cognos/manyeyes/visualizations/digital-

out-of-home-media-categori-2

Patrick quinn interview from pq media

http://www.youtube.com/watch?v=i4Bc-8paLMk

Milestones 2010

June 2010. PepsiCo, signs multi-year, multibrand agreement with Gas Station TV.

Feb 2010. LocaModa, launch DOOH app store inc Foursquare

Feb 2010. Disney + Google bid to invest in Bus Online in Shanghai.

2010. 16% DOOH growth totaling > $6.47 bn.

2010. Revenue increased by10% and DOOH share of the OOH market to 9.4%, despite bad economy

April 2010. Nielsen becomes the accepted audience measurement tool.

Milestones 2011

Jan. Access 360 Media, digital networks in stadiums, arenas and shopping malls, secured $12mil in capital

March. Al Barq installs innovative Digital Media Units, adding 58 new screens in Khalidiyah Mall

Feb. 7-Eleven TV will reach more than 200 million shoppers monthly – 4th largest TV channel – worth $75mil.

April. RMG + Blue Bite deploy first NFC (Near-Field-Communication) technology.

May. VisionChina expands transport coverage add 3 new lines.

April. RMG predict 25% of networks to merge or be acquired in the next 1-2 years.

Industry reaching $1bn in revenue

mobile

DOOH DOOH reaching $1bn in revenue held back by fragmentation

0 2 4 6 8 10

internet

Years

Pq media report

The PQ Media Global Digital Out-of-

Home Media Forecast 2011-2015 is the

most comprehensive source of strategic

intelligence used by leading DOOH

operators due to its breadth and depth of

data and predictive analytics.data and predictive analytics.

http://www.mediavataar.com/news.php?id=735

http://www.pqmedia.com/globaldigitaloohforecast-2011.html

It also includes five-year forecasts, five-year histories, and a wealth of other exclusive data, analytics and insights.

industry performance

Key markets

The U.S. remained the largest global market, while

China was the fastest growing.

China currently leads the world in the number of digital

signage displays deployed and number of NASDAQ IPOs,

with the country's biggest digital signage firm,Focus with the country's biggest digital signage firm,Focus

Media Holding, alone operating more than 120,000

screens.

http://knol.google.com/k/how-big-is-the-digital-signage-industry-in-china#

Digital versus traditional

2013 forecasted OOH Ad spend US

dooh2010outlookv4ltd-us-100426184926-phpapp02.pdf

Dooh spend

http://www.digidaydaily.com/stories/the-quiet-digital-revolution-in-outdoor-1/

25% $500mil

Digital place-based networks

Digital billboard and signage

Dooh spend split in us 2010

$3.5 billion in sales

16% – 17% growth in 2011

75%$1.5bn

PQ Media

DPN made 3 times larger than DBB.

Venue granularity

dooh2010outlookv4ltd-us-100426184926-phpapp02.pdf

Monthly DOOH screens viewed by venue 2010.

Campaigns (RFPs) by industry industry industry industry in Q4 2010

The telecommunications industry represented more than 50%

http://www.marketingcharts.com/direct/telecom-leads-q4-dooh-rfps-16131/adcentricity-q4-top10-venue-inclusions-by-subcategories-feb11gif/

Campaigns (RFPs) by venue venue venue venue in Q4 2010

Long dwell times, interactivity, social nature and consumer connectivity options within these environments saw growth

http://www.marketingcharts.com/direct/telecom-leads-q4-dooh-rfps-16131/adcentricity-q4-top10-venue-inclusions-by-subcategories-feb11gif/

Top 10 networks

Largest DOOH Networks - based on 18+ Visits

Total Day

Company 18+ Visits

Exposures/Vi

sit Total Exposure

Premiere Retail Networks (PRN) HDTV

127,552,877 0.5 61,535,226

Best Buy 32,136,859 0.7 22,961,442

Outcast/PumpTop/HCMN 22,883,180 1.5 33,668,310

Zoom Fitness 18,277,601 1.8 33,310,401

indoorDIRECT 16,571,970 0.9 14,596,469

GameStop TV 14,754,089 1.2 17,356,880

Source: Nielsen (4th Screen Report, November 2010) - modified to reflect HCMN/Outcast/PumpTop merger.

http://www.coadydiemar.com/html/mm_volume6_2011.html

RMG Fitness 10,467,244 1.5 15,857,875

TargetCast 10,264,337 5.1 52,308,475

The Hotel Networks 9,827,248 2.3 22,667,844

TouchTunes 7,368,487 13.9 102,072,577

Access 360-AMNTV 5,494,428 3.6 19,549,174

AMI 3,441,743 11.4 39,218,884

A few Key players – us/europe

Description Location

Venue / industry Screens Reach

RMG networks offers advertisers the ability to reach consumers using its portfolio of place-based digital networks

US In-Flight Entertainment, Fitness Entertainment, Point-of-Care, mtvU, Taxi and NYTimes.com

200,000 screens

60 million viewers every month

National CineMedia

largest digital in-theater network. 170 Designated Market Areas (DMAs) (49 of the top 50)

US Cinema 17,300 screens

650 million

Captivate Elevators and lobbies of large urban office buildings and

North Americ

largest in-office network in US. Nearly 1,000

8,900 screens

Reaches 3mil consumers. urban office buildings and

suburban office campuses. America

in US. Nearly 1,000 buildings in 15 of the top 20 major metro areas or Designated Market Area (DMAs)

screens consumers. 59 million advertising impressions per month

CBS Outdoor It is the third largest outdoor media owner in revenue terms.

US, Europe, UK

Transit – bus shelter, underground

Premier Retail Networks (PRN)

a network solution provider Retail 64,000 screens. 10,000 venues.

CNN Airport Network

satellite television network broadcasting general news, weather, stock market

Global Airports 48 airports

A few Key players – asia

Description Location Venue / industry Screens Reach

Bus Online China's No.1 in-bus digital mediawith revenue of $US45mil

China Transit - buses

Digital Media Group (DMG)

advertising solutions for subway systems in China.

China, Shanghai.

Transit - rail 4.3 million passengers in Shanghai.Expecting 9 million by 2013.

Air Media (AMCN)

operates the largest digital media network in China

China Airports. In-flight. 32 airports, inc the 15 (AMCN) media network in China

dedicated to air travel advertising

inc the 15 largest in China. 8 airlines, inc the 3rd largest

Focus Media (FMCN)

China's largest Digital Media Group

China office lift lobbies,shopping districts, and residential complexes

165,000 screens. 96 cities.

Vision China largest out-of-home advertising networks using real-time mobile digital television broadcasts

China Transit 60,000 screens. 17 cities.

26 million per month

Asia Media It operates the country's Largest Transit-TV Network.

Malaysia Transit – buses and trains

3,000 screens

Be Digital Subsidiary of Click Grafix, southeast Asian distributor for technology suppliers including Scala

Malaysia Restaurants. Links DOOH, SMS, Web

40 restaurants

What we can expect

in the next two yearsin the next two years

strengths

Despite the economic downturn, digital billboards

generated 6-10x more revenue per month than static

Equipment and infrastructure costs are falling

Consumers are spending more time out of the home Consumers are spending more time out of the home

than ever, twice more today than 30 years ago.

Interactivity is promoting longer dwell time.

TV is fragmenting decreased effectiveness of traditional

advertising and pushing clients to find new mediums

http://m.clickz.com/clickz/column/1717540/digital-out-home-landscape-

brief

weakenesses

No critical mass – TV’s tens of millions vs. DOOHs

thousands

Agencies are seeking methods to better plan and buy

DOOH more efficiently.

Capex for new new tech impacting profit margins and

sales teams too expensive to develop DOOH network.

Standardizing audience measurement to compete with

other media

opportunities

Audience segmentation (age and sex)

Image-recognition systems for targeting advertising.

Narrowcast networks eg for dental clinics.

“Pay-per-Look” where advertiser charged for the number

of eye-contacts with the screen.

New LEDs with black-base will improve image quality of

DOOH.

threats

Content bias towards video content giving TV /

broadcasters an edge.

Competition for other merging media remains stiff

(mobile and social).

Fragmentation will continue to disrupt revenue until

further consolidation occurs.

Industry life cycle

Gold rush 2003-08

Shakedown 2008-11

Breakout Post 2012

Downturn , mergers and acquisitions reduced competitors and increase screens.

Ruled by innovation. Competitors creating unique value.

70% of DOOH controlled by 10 networks. Further consolidation required.

http://11thscreen.com/2010/11/inside-look-at-dooh-forecast-via-pq-media/

Scale not value

“…a lot of M&A activity going on right now, both inside and

outside of our sector. Second, most of the perceived value of

these acquisitions still lies in the pursuit of scale, not synergy.”

“To date, companies like Zoom and RMG have gained scale by

purchasing smaller network operators (or just their assets) … purchasing smaller network operators (or just their assets) …

to allow them to sell onto a much larger number of screens.”

“These practices make DOOH more attractive to advertisers

who are accustomed to purchasing both reach and frequency in

very large numbers.”

http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/DOOH_Networks__Will_There_Be_Only_One_-781.html, Bill Gerba, DOOH Networks: Will There Be Only One?

Mergers, acquisitions, closures

42Media Group goes bankrupt

Access 360 Media purchase Arena Media

Ad-Dispatch acquires Volt Media

AdWalker goes bankrupt

Artexe SRL acquires Emmerrelogic SRL, becomes DOOH.IT

Avanti Screenmedia goes bankrupt

Bally Technologies acquires Coolsign's gaming division

ClearOne acquires NetStreams (and just received its NASDAQ delisting notification)

Core Technology merges with Studio 911

Muzak goes bankrupt

National CineMedia makes strategic investment in Danoo (now RMG Networks)

NCR acquires NetKey

NetKey acquires Webpavement

Pixman Nomadic Media goes bankrupt

PlayNetwork acquires Channel M

Primesight acquires Titan Outdoor's UK roadside business

Redbus Group acquire assets of Streetbroadcast

RMG Networks acquires Pharmacy TV

Screenred disappears (and presumably goes

Aug 2008. Good time to get bought.

Danoo acquires IdeaCast

Digiadvans acquires Mobile Eco Ads

Digital Poster AS goes bankrupt

EDR Media acquires The Golf Network, becomes Sports Retail Networks LLC

Fujitsu acquire global rights to TELentice (after bankruptcy)

JCDecaux acquires assets of Titan Outdoor UK

Kaleidovision acquires Music Concierge

Litelogic goes bankrupt

Medscreen goes bankrupt

Mermaid acquires Media Solutions AB

Millennial Media acquire TapMetrics

Minicom Digital Signage spins out from Minicom

Mood Media acquires Music Matic

Screenred disappears (and presumably goes bankrupt)

SMART acquires NextWindow

Sony acquires Convergent

TargetCast buys Ripple Networks

Touchtunes acquires Barfly

Verifone acquires Clear Channel Taxi Media

Vision Media Group goes bankrupt

Visser Digital Media acquires CampusLink and LevelVision College

WSJ/KPCB make strategic investment in TargetCast

Zoom Media & Marketing acquires Sports Display, ClubCom, GymTV, Allied Media's nightlife network and Wellness Health Education Network

http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/M_A_List__Digital_Signage_Mergers__Acquisitions_and_Bankruptcies-769.html

What we can learn

from othersfrom others

what we can learn from apple

There can surely be no larger or fragmented market than the

mobile industry. The carriers with all their self-interests at

stake kept the walls of their gardens high. It took Apple,

ironically with a closed operating system, to show the market a

way out of its deadlock on one of those fronts. What DOOH needs right now

In many ways, the App Store might be more valuable and

disruptive than the iPhone. The App Store transformed an

industry within 18 months – enabling over 100,000 apps to be

developed by November 2009 and over 3 billion downloads

worldwide by January 2010 (Source: Apple, Inc).

background

Neo Advertising convinced the three largest retailers to

“take the leap” into Digital Signage.

“As you know, these people are extremely difficult to

deal with and convincing them was not an easy task.

Now the market really sees the Neo Project as one of

Industry contacts essential.

Now the market really sees the Neo Project as one of

the key ways to institutionalise this media.”

Smr_01_08.pdf

Investment of capital in delivery.

Neo’s service offer

Developed an advertising network using plasma and

LCD screens, operating mostly in the retail,

supermarkets and hypermarkets.

Neo operates the largest network in the nation, in the

top 40 shopping malls. They also operate in pharmacies top 40 shopping malls. They also operate in pharmacies

and travel agencies.

Smr_01_08.pdf

Content extension

After two years of operations, the fact that only

“broadcast” content was available became frustrating

when planning campaigns.

“We were not getting some business because some

clients had no content for this medium, so we decided to clients had no content for this medium, so we decided to

create a service department to help clients make the

shift from traditional to digital signage.”

Started by creating light flash animations with 8 full

time staff working on content development.

Smr_01_08.pdf

Production fees are low

digital signage solution providers

Foot Print Asia URL

1. Cisco Au, Ch, HK, India, Indo, JP, KR, MY, PH, SG, TW, TH

http://www.cisco.com

2. EnQii China, Hong Kong http://www.enqii.com

3. Broadsign None http://www.broadsign.com

4. C-nario None http://www.c-nario.com

5. YCD None http://www.ycdmultimedia.com

Top 10 globally

These people are likely to buy you Most have offices in

US / Europe only

6. ScreenRed None http://www.screenred.com

7. Scala India, Japan http://www.scala.com/

8. Remotemedia None http://www.signagelive.com

9. TELentice No data No data

10.Stratacache None http://www.stratacache.com/

http://www.dailydooh.com/archives/727, Adrian J Cotterill, Editor-in-Chief

Published 2008

Why cisco and enQii

“Both are global operations. Cisco is so obviously global,

with operations in almost every country you care to

think of.”

“They also both offer a device / appliance rather than a

PC based solution. Whilst not the be all and end all of PC based solution. Whilst not the be all and end all of

reasons (we do have several PC based-signage solutions

in our top 10) we do think that devices / appliances are

a much better way forward for delivering signage

solutions.”

http://www.dailydooh.com/archives/727, Adrian J Cotterill, Editor-in-Chief

Why cisco and enQii

“We predict more and more of the larger installations in

2008 will be device based – there is also a growing

trend, especially amongst retailers, to choose device

based solutions (ease of management, small footprint,

‘greener’, etc.).”

“Another trend that we like is the Software as a Service

(SaaS) ASP model much trumpeted by Broadsign (and

others of course) who came in third in our top 10.”

http://www.dailydooh.com/archives/727, Adrian J Cotterill, Editor-in-Chief

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