Mike Sullivan-Trainor, Senior Industry Analyst Market Intelligence at Avixa, breaks down the growth areas of digital signage in his year in review – and identifies the obstacles to growth for the industry.
The context for digital signage is that of an evolving solution, with new capabilities coming on-line, and an expanding universe of use cases. Add favorable pricing due to lower technology component costs, and the solution seems poised for record growth.
However, as with any growing solution, key factors such as buyer and supplier economic challenges and learning curves and industry adaptations govern the pace of adoption as much as exciting technology. That pace was reflected in AVIXA’s 2024 Industry Outlook and Trends Analysis (IOTA) five-year forecast, which reported an expansive digital signage market, already at $41.4 billion worldwide. However, the pace of growth slowed from 6% in 2023 to 5.1% in 2024 due to a combination of macroeconomic and industry-specific factors. The market is expected to resume a higher pace in 2025 of 6.8%, growing to $44.2 billion as technology and use case expansion continue.
DS market: hardware
Breaking down the $41.4 billion digital signage market by product area, AVIXA’s IOTA highlights media servers as the largest revenue share, at 25% of total solution value in 2024. Flat panel displays, TVs, and monitors comprise about 18%. Media storage comprises about 12%. Installation and integration account for 14%.
LED displays are forecast to increase from 13% share in 2024 to 16% in 2029. The share increase underscores LED’s rising adoption due to superior brightness and versatility. Video projection technologies are facing a continuous decline, highlighting a shift from projection technology towards direct-view LED and flat-panel displays within the digital signage solution.
DS market: software
Cloud and managed services remain at lower share in 2024 and through 2029 of between 2% and 3%, indicating the slow adoption pace of the Pro AV industry to IT-type models.
While standalone software maintains a 2-3% share of revenue from 2024 to 2029, digital signage is expected to benefit from the use of AI technologies, enhancing personalization, increasing the levels of audience engagement, and improving audience measurement and analytics. Real-time viewer data analytics will allow for dynamic content adaptation, tailoring the message to the time of the day, individual preferences, demographics, and more. It can also improve the experience through AI-assisted interactivity through gesture control, face, and voice recognition. The vast collection of data can help improve campaigns and redefine engagement strategies. In 2024, AI implementations are at an early stage, but they may soon become ubiquitous as use cases are proven.
Internal communication generates growth
More than 40% of respondents in AVIXA’s Market Opportunity Analysis Report (MOAR) – a 2,000 respondent Pro AV demand survey across all industries – reported that their organizations planned to increase the amount of spending on digital signage in Q1 2025. Corporate, healthcare, and transportation were some of the leading vertical sectors with the highest percentage of respondents who expect increased spending.
While digital signage growth decreased in 2024, mirroring a global slowdown, the rising prevalence of immersive experiences aimed at enhancing audience engagement across uses cases is expected to stimulate new growth in 2025. From the solutions point of view, digital signage is expected to experience stronger growth than other solutions throughout the IOTA’s forecast period of 2024-2029, with a CAGR of 5.69%, building to a $54.6 billion market in 2029.
The increasing role of this solution in corporate and education internal communication, immediate and immersive experiences in retail and hospitality, and urban and long-distance transportation will support its growth. Live Events will also increase their share of the digital signage over time. Venues will fully benefit from the use of this type of solution in many aspects of live events, ranging from registration to orientation to on-premises advertisements.
Technology developments
Technology developments that will also help drive the market include:
- AV over IP. By transmitting audio-visual data over a network, AV over IP allows for scalable and flexible distributions, poised to immediately enhance digital signage content.
- System on Chip. SoC technology integrates directly with displays to simplify content management, providing an immediate upgrade and minimizing external hardware requirements. Digital signage implementations will benefit the most from this capability in the short term.
- Cost efficiency. Digital signage technology is becoming more affordable and versatile, allowing for larger and more dynamic displays. This trend is expanding beyond traditional advertising to include applications in healthcare, real estate, and more, providing a new level of engagement and information distribution.
- Security. AVIXA forecasts digital signage will integrate with security (access control, surveillance) systems to become part of that ecosystem, especially as more implementations are enabled by vulnerable public AVoIP and 5G networks.
- Managed services. Advanced AV tools adoption is expected to create strong demand in the short term for managed services in digital signage allowing service providers to implement richer services for combined infrastructure and content business models. Within managed services, revenues from digital signage, the second-highest revenue taker for Managed Services and Maintenance, grew almost 15% in 2024. The solution will continue to will see growth driven by a strong Indian market and an improvement in the Chinese economy later in the forecast. Managed Services solutions are increasingly addressing digital signage as the industry moves closer to platform-based implementations.
- 5G Networks. In digital signage, the generalized deployment of 5G stand-alone (5G SA) networks will drive the adoption of cloud-based services, as network slicing and extremely low latency characteristics of this technology will provide efficiencies, cost savings, and geographic reach.
- Interactivity. The rise of interactive digital signage and engagement tools at events, enhancing user experience and providing valuable data insights to organizers for future event planning and personalization strategies will drive 2025 use cases.
As mentioned at the outset, while these trends favor digital signage, other factors can delay adoption. The Pro Av industry has been characterized by highs and lows in the 2020’s and 2024 was no exception. The year began with high expectations of growth in revenue and innovation with record attendance at ISE in February and Infocomm in June. But enthusiasm quickly dampened as macroeconomic factors such as a slow-down in global and regional growth, especially in China, reduced corporate demand due to an uncertain political and economic environment, and the leveling off of post pandemic spending, especially in live events, combined to slow growth overall and cause negative results in some sectors. Digital signage providers also experienced the slowdown as part of the overall industry challenge in general and LCD/LED market factors in particular.
Prices for LCDs are declining
For example, direct-view LED, and LCD video walls are beginning to replace projectors. But LCDs themselves were hit by a significant price reduction due to increased competition and slower demand. Growth in LEDs was not enough to offset the revenue challenges. A possible price rebound is expected in Q1 2025 as manufacturers cut back on production volume.
The downside of digital signage’s spread across diverse industry use cases is that the solution’s adoption is also governed by the fortunes of each industry and in aggregate is also aligned well with macroeconomic trends. When the economy is booming, so are most industries and Pro AV solutions like digital signage along with them. When economic slowdowns occur, the solutions take a hit as well.
A year of mixed fortunes
This relationship was evident in 2024, a mixed year for most industries. The surplus spending from the post-pandemic pent up demand dissipated sooner than expected, leaving 2024 with a return to a low growth normal. But the industry was also affected by the slowing regional growth of China, the flirting with recession in some Western European countries, and the battle with inflation everywhere, but especially in the US.
For industry participants, whether in digital signage or other solutions areas, the interplay of foundational growth drivers can provide increased value. For example, catering device-centric solutions to innovative use cases, adapted to certain industries or regions will open new pockets of revenue.
This approach represents a change from mass market – one size fits most – approaches to solutions. The transformation required will encompass a new partnership among industry players, where manufacturers work more closely with channel partners to deliver catered solutions.
There will still be many opportunities for a set of solution capabilities that will serve multiple use cases, but a greater level of industry and regional customization will ultimately be required. Rather than reacting to demand, this approach proactively generates it, leveraging the technology and value of digital signage across multiple industries and use cases.
