Wednesday, June 4, 2014

Interview with Mr. Jerome Moeri, Chairman of Navori SA (Part 2 of 2)

I recently had the pleasure of interviewing Mr. Jerome Moeri, Chairman and Founder of Swiss-based Navori SA about his thoughts on the future of digital signage.

Here is the second part of our conversation.

Q. How do you see the industry evolve over the next year?

A. The digital signage market has been experiencing 30 to 40% growth during the past 10 years.  This growth varying from one region to another.

Given the current state of the industry, we can make the following predictions:

1. The number of software publishers will decrease (consolidation): Research and development costs associated with the development and maintenance of professional software applications have increased at a rate of 30% per year. Organizations that lack a global presence are increasingly marginalized because their sales volume is to low.  They lack the financial resources to support continuous research.  They are simply left behind.  

Take player software, for example.  In the past couple of years we have seen Android taking an increasingly larger piece of the market and this created the need for software compatible with that operating system.  However there is still a need for Windows software too so now we’re getting into hybrid applications.  This is having a big impact on smaller, less established publishers because they simply cannot afford to develop and maintain software in two totally different operating systems.  These companies will either be absorbed by their competitors or simply disappear altogether.

2. The network operator and reseller market is divided into 3 distinct segments:
a. First, we have people reselling basic products that are designed for small deployments.  These usually require entry-level products such as the ones offered by Samsung and other screen manufacturers. We expect demand for these products to increase because they are inexpensive and easy to deploy. These types of products are usually marketed by A/V resellers who focus on display sales.

Navori already caters to this market with our QL StiX Android Player. It’s a plug and play device that communicates with our own SaaS. It is extremely easy to deploy and use and it is very affordable.  We think many independent software vendors (ISVs) in this segment will gradually lose ground because the display manufacturers will aggressively promote their own solution.

b. Next we have people who specialize in corporate and professional organizations. Their  customers need a good content management solution that is a little more elaborate that what’s available from entry-level products.  Customers who fit this profile require multiple user accounts and products that offer dynamic content management. These software solutions are usually resold by stakeholders who have more product knowledge and better technical expertise folks who simply resell screens. In these cases, we see software taking up a bigger share of the total budget than we would in the first segment.

c. Finally we have network operators and integrators that are looking for professional solutions that can manage larger networks of hundreds or even thousands of players.  Navori has several year’s experience in this field and we market our software to this segment under various licensing models.

Now, let’s take a minute to talk about the role of digital signage network operators.

DSO’s initially consisted mainly of pure network plays but this is slowly changing. Currently, the share of "brick and mortar" operators is on the rise. We now see DSOs that are telephone operators, specialized industries or verticals looking to extend their skills to digital signage

3. Display manufacturers who offer a range of professional products. The trend in Western countries is to embed the player hardware into the screen in order to make the integrator’s job easier and increase productivity.  From a practical point of view, this type of bundling is more successful in the West and in other countries where labor tends to be expensive.

I think the use of separate players and displays is more flexible.  The integrator or network operator is free to select the best display for the current project while standardizing the Player hardware across an entire deployment.  Also, it’s often less expensive to repair or upgrade individual Player hardware while you keep the same display.  Take for example our Navori QL StiX with built-in HDMI-CEC support which can be matched to any consumer or professional grade display.

Q. What about digital signage hardware manufacturers?

A. We see this business split into three separate groups.

At the high-end we find companies like NEC who have been integrating the PC Player hardware inside the display frame (OPS style).  By the way, NEC has just introduced a very powerful OPS Android player.  This small form factor device is designed for single screen applications and it has the advantage of costing a lot less than a typical Windows based PC and the overall performance is roughly equivalent.  We find these devices offer better stability and cost less to deploy than competitive solutions.  The cost of commercial-grade OPS devices is higher that consumer-grade devices but you benefit from a much higher ROI over the lifespan of the device.

In the middle and at the lower end of the scale we find products from display manufacturers like LG and SAMSUNG who offer entry-level software applications designed to run exclusively on their hardware.  These companies are mainly interested in promoting their own “pseudo-OS” rather than go with Android, resulting in unrefined products that offer limited features and reduced playback quality.  Contrary to Android, these proprietary operating systems aren’t compatible with other devices such as tablets or mobile devices.  It’s like going back in time.

Then we have the Chinese hardware manufacturers who offer a veritable constellation of Android based products such as tablets, displays that feature built-in Android players, mobile devices, hardware media players of various shapes and sizes, etc...  Their advantage?  Network operators and hardware integrators can order private labeled devices and products designed for specific vertical markets.  These products are both reliable and affordable.  

However, there are a few disadvantages.  For example, you need local knowledge and an understanding of local customs.  You must also be prepared to place large orders since you’re dealing directly with manufacturers.  You should be prepared to deal in quantities of 500 units or more depending on the product and the manufacturer.

Q. How do determine the success of your R&D efforts?

A. Throughout the R&D process, we look for 3 things:

  1. What triggers the most positive impact on the audience... (Is it the new features, better communication, simplified interactivity, smarter software or the feature’s relevance to the task).
  2. Are we simplifying back-end processes and making the system more accessible.  Each innovation should always result in a reduction of complexity and help us simplify deployments.
  3. Are we reducing OPEX and CAPEX.

We feel innovation can only be effective if makes the product simpler to use and accessible to all.

Q. What does HDMI-CEC bring to digital signage?

A. You can only be sure a screen displays content if you’re in control of the screen. HDMI-CEC is an electronic device standard that lets a device control a screen by sending commands via a HDMI cable.  It’s important to note most deployments lack true screen control and it’s unfortunate as this feature can double the lifespan of the displays.  It’s also critical for network operators and end-users to know the screens are actually turned on and displaying content.  

RS232 has been around for 10 years but it requires a serial port on the PC and the screen plus a serial cable.  You also need to know which codes to send to the screen and codes vary from one manufacturer to another.  Using RS232 to control your screens can be quite complex and expensive.  This explains why so few people actually use this feature.

This is why our Android based QL StiX players now feature HDMI-CEC.  This technology lets users schedule any screen’s on/off settings using the Navori QL software.  There is no coding or other steps required.  Best of all, users are kept informed on the status of each screen so they can take action if there is a problem.

Innovation = making things simpler and more accessible to everyone.

Q. What about Android and 1080p support?

A. Current Android solutions are built on mobile technologies.  These devices are optimized for 720p (meaning a resolution of 1280x720 pixels).  A few of these devices will offer a 1080p setting but in fact they are upscaling their native 720p content to 1080p at the display.  It’s quite easy to test for this.  Simply launch the web browser on your Android device and load any web site.  Then, do the same on a PC configured at 1080p and you will see the difference.

Android is an operating system that is pre-loaded on each device by the manufacturers.  In most cases the manufacturer has no idea how these devices will be used.  They don’t know if they are destined to become digital signage players or perform some other function so the devices are not optimized for any specific task.

This is why Navori markets it’s own Android device.  The QL StiX 3400 was designed with digital signage in mind.  The device supports a native resolution of 1080p (1920x1080 pixels).  By specifying this resolution, we ensure the playback quality matches what you can get from a PC and this is great news!

The device can be ordered from our online store, from our branch offices or from one of our distributors worldwide.