Projection Monthly - September 2005

Dear Readers,

The summer is over (all too soon), CEDIA is on the horizon and our September issue of Projection Monthly is now in the hands of our subscribers. In our note this month, we decided to highlight what may be an emerging trend in the electronic signage space - consolidation and vertical integration. This month, it is InFocus and Thomson who are furthering the trend.

InFocus and Thomson both traditional hardware manufacturers, announced the acquisition of significant electronic signage assets and both are getting into the targeted content delivery or "narrowcasting" space.

The move for IFC is a strategic play to bolster sagging profits from what has become a deadly commodity business for the single-play projection industry pioneer. This is not just an area of casual interest for the company. With dwindling chips to bet with, (the company reported an increase net loss of $19M in Q2) any investment for IFC at this time is significant and had better be right.

But the planets may yet realign for InFocus with the acquisition of The University Network (TUN). This is a Memphis, TN based on-campus narrowcasting solution provider with a display footprint and network operating in over 80 major US universities. The company said this signals a strategic shift hinting there were other narrowcasting partnerships in the offing. TUN and other new digital media assets will be managed by Dr. Candace Petersen in the new IDM business group (short for InFocus Digital Media).

Petersen said the company is broadening the business model to include the solution space and pointed out that narrowcasting is not new to IFC. The company was one of the first to use in-flight magazines and later in-flight video entertainment to pitch its sexy, light weight data video projectors to mobile executives sitting on the plane. With TUN the company now plans to move to the other side of he experience by providing the hardware and network services first at Universities and eventually in other venues as well.

The content management and advertising sales for the campus network will come under this new IDM division at InFocus and likely to continue to be run by the TUN group based in Memphis. We were also told the group has an aggressive goal to double the university network size by the end of September-this year. This shift represents a new chapter for IFC and expanding into the technology intense narrowcasting space should prove to be a good fit for this display industry pioneer.

The US division of Thomson is yet another hardware manufacturer getting into the electronic signage market. The company reported spending $285M to buy PRN Corporation, a US provider of out-of-home video advertising networks. PRN is a high profile, in-store television network supplier based in San Francisco. The group manages over 6000 tier-one retail locations including Wal-Mart, Sam's Club, Costco, Albertsons, Best Buy and Circuit City.

When folded into the Thomson organization PRN, will be part of the Network Operations Services business unit and will continue to focus on installation and management of electronic media infrastructure, conversion and preparation of electronic video content, and video content aggregation. The company currently manages thousands of playlists addressing 34,000 customer viewing areas. PRN is heavily involved in the dynamic digital signage market at the point of sale, and claims its reach is a whopping 200M viewers every month.

This is a good match as the Thomson's Services Division already manages electronic content flows for a variety of distribution channels including broadcast, cinema, corporate and retail. According to the company, PRN will extend the reach of this activity towards retail and advertising clients and networks.

Last month in our story on Clarity's purchase of Synelec Telecom Multimedia S.A., a digital display company based in France with over 1200 display system installation sites worldwide. This move helps strengthen the display manufacturer in the high-end control room markets where Synelec has been successful. This past spring Clarity purchased CoolSign, the digital media software and services division from Adspace Networks. The purchase enabled Clarity to deploy enterprise-class solutions and added over 3000 digital signs to its install base (see Projection Monthly July-05 issue, p. 120).

Clarity also claims some of the country's best-known retailers including Macy's Union Square San Francisco. The deal gave Clarity a presence in malls, theaters, and other public advertising venues through the Adspace media network. It also locked Clarity into a preferred supplier relationship with Adspace for digital signage products and services.

As display hardware continues to commoditize these three manufacturers have identified the low-hanging fruit in the new digital signage solutions market with the potential for narrowcasting ad revenue, content creation, management and delivery services-all as a way to hedge against ever shrinking profits from hardware sales.

You'll find more details on these companies and our regular coverage of 100+ timely stories, all organized into over 30 sub-sections for easy review and reference in this month's Projection Monthly. If you are a subscriber, you can build a library of past issues that is key word searchable - a very valuable business intelligence reference tool.

Projection Monthly is a subscription-based newsletter that covers the entire big-screen display industry, including all technologies, markets and applications - from the supply chain through the distribution channel. If you would like to evaluate a sample copy of Projection Monthly, please reply to: info@insightmedia.info

See the Table of Contents for the September issue of Projection Monthly by clicking here.

Until next time,
Steve Sechrist
Insight Media
steve@insightmedia.info

About Insight Media

Insight Media (www.insightmedia.info) provides a full array of market research, news, analysis and consulting services for the microdisplay industry, with special attention to projection and near-to-eye products. Tracking the complete supply chain from finished products and distribution to components, microdisplay-based products, technologies, trends and analysis is delivered through newsletters, technology reports, forecasts, conferences and custom consulting activities. Insight Media has developed a world-class team of industry analysts and associates to provide the most comprehensive coverage and analysis of the microdisplay industry has to offer.

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