Digital Signage replaces posters with screens.
PixelPipe Signage is a cloud SaaS content management tool initially targeted at small digital signage projects of 1-10 screens. It is sold through distribution where it is bundled by the channel with the required hardware. The customer receives a full system ready to use out of the box.
We have worked with the channel to design a sales process that fits the way dealers want to work. Unusually for the industry, PixelPipe Signage is sold as a stock item licence so that dealers can own the relationship with their customers.
We have an existing UK/Eire distribution agreement with ScanSource Communications and have received a draft of the European territory extension agreement which we expect to sign next week.
PixelPipe Signage solves a long term problem faced in digital signage: making content creation and management affordable for solo retailers and small businesses. We’ve cracked it and now your investment will allow us to take it out to a larger number of dealers in the UK and mainland Europe.
Our distribution partner, SSVC, gives us an established reseller network in the UK and Ireland, and we aim to expand this network in the US and Europe. Starting in the UK this deal means we can quickly achieve significant home market growth while providing the opportunity for international expansion.
We intend to use this partnership to increase our significant market penetration. Many competitors provide solutions that are too complex for small scale users and/or too expensive for large scale projects. Our user interface is easy to learn and our pricing is competitive.
Substantial accomplishments to date
As stated we have an exclusive UK distribution agreement with SSVC who will also provide our main sales channel and our 1st and 2nd line customer support, enabling us to concentrate our investment in the product.
Key headline projects have proved the power and versatility of PixelPipe Signage.
A multinational film studio approached us directly in 2015 inviting us to bid for the provision of a stakeholder information system. Initially for their LA studio site, we aim for it to be rolled out to all their offices worldwide.Their team has accepted our demonstration version and we are currently implementing the 1st 50 screens with them under a T&M contract. We can reveal their name to potential investors with an NDA.
We have redeveloped the scoreboard software for the MCC at Lord’s cricket ground in London using PixelPipe Signage. We are currently discussing further projects with the MCC. We expect that PixelPipe Signage will eventually provide information throughout the ground, including hospitality boxes and bars.
Amino, a major supplier of IPTV players, has modified its set-top box to enable PixelPipe Signage to run on it. With that work complete our software is now being bundled with Amino players by SSVC as an integrated solution to its channel. Amino are also introducing us to their sales channel in order to increase their own sales.
Our primary source of income is from PixelPipe Signage licence and in-app content sales. The recurring annual licence fee will be in the region of £150 per screen, net of distribution costs. Our US film studio project is sold direct at full retail price (£200 p.a.) In the future we aim to develop multiple tiers of the product to best suit the differing requirements and price points of vertical markets.
Our exclusive distribution deal with SSVC initially covers UK/Eire. We aim for a worldwide agreement to follow with the US-based ScanSource parent company. We are targeting sales of 1,500 new licences in the first 12 months from rollout in the UK, and then expansion to Europe and USA.
With annual licence renewals and planned distribution throughout Western Europe and the Americas via the ScanSource group, we firmly expect annualised revenue rates to grow. We expect our cost base to remain proportionately low.
Use of proceeds
This bridging round takes us into 2018 while we complete a larger round with the Angel Investment Network which launched a few days ago. This runway is calculated assuming no new sales - every sale will extend the runway.
We will also contribute funding to support SSVC’s marketing communications, including advertising, webinars and exhibitions and training days. This has the advantage of standardising the brand throughout expansion. Channel training will ensure the efficacy of this arrangement.
We will recruit a new junior developer to join the team. We believe our technology puts us in good stead to compete well in 2017 and build good market share. Our channel and talent focus will help us keep it.
Please note the company has a loan for £105,280 repayable over 5 years. The company also has two director loans for £123,934, and £23,934 with interest payable at 9.5%. This round will not be used to repay the capital on the directors loans.
Digital screens for advertising and communication – or digital signage – have been replacing paper posters for some time. Analysts Markets and Markets report the total market value in 2015 as an estimated USD 16.8bn, with 6.7% per-annum growth to reach $27.3bn by 2022. Of this, 45% is in North America and 26% in the UK and Europe; many thousands of new systems are installed each year.
Various forms of digital signage are recognisable throughout our modern lives. Retail and outdoor advertising are now normal but its real expansion is happening in offices, health centres, gyms, hotels, government offices, public transport, entertainment, education and even places of worship.
We believe that small and mid-sized users make up the bulk of demand. They require a system that is simple to install and easy to operate but are restricted by the usability of entry-level systems and the high cost of making advertising content.
Many larger businesses seek a system that works in multiple locations, with varied content by location, but with centralised reporting and management. Historically, these signage systems have been complex to install and unwieldy to operate. In two decades of experience in this market, our CEO has not seen a solution that provides users with the required complexity of scheduling, with ease of use and the ability to create their own inexpensive but good looking content.
For many larger users, the initial setup, content creation, and distribution costs don’t provide significant ROI. The challenge is therefore to deliver a system which provides full operational functionality while being less expensive to install and easier to maintain.
High staff churn in large businesses places a value on ease of use and low training costs, which PixelPipe Signage delivers in spades.
Our target market is therefore this large base of businesses, small to large, who are looking for a simple solution that grows sales revenue or streamlines internal communication.
Characteristics of target market
The smaller, volume end of the market is represented by two main groups:
1. Shopkeepers and small retailers who wish to advertise new products and promotions. Simplicity is key as they are not sophisticated IT users. Many would like to build a schedule of content to suit their passing trade using a mix of supplied content, news and local information. Current systems tend to be too complex to use or too costly, with high cost of sales for dealers.
2. Corporate offices, health centres, hotels and places of worship where users wish to provide clients with welcome messaging or information about activities while directing other information to staff. Ease of operation and frequent generation of local information is vital to keep content current and interesting, affordable and aesthetically pleasing. Many, quality solutions are presently only available at substantial cost.
3. In many large organisations the cost of content management and distribution over limited bandwidth to remote sites restricts the frequency of updates and, therefore, the system’s ROI. Content creation and IT complexity provide a barrier to adoption.
PixelPipe Signage meets all these needs with:
● low cost of installation.
● ease of use.
● minimal training requirement.
● low cost of sales.
● quality output.
● high quality content creation.
● minimal IT requirements.
We realise the importance of creating a strong, centralised brand with two-way communication with our reseller network.
Regular webinars will address technical challenges and sales objections. We will partner with SSVC resellers and OEM partners to identify these, educating the user base and reducing support time. Partners selling PixelPipe Signage will be asked to seek suitable cases for written and video success stories; these will be pooled for mutual benefit.
Our PR will target B2B publications in general and specific trade press. Test units will be sent to journalists and analysts on an evolving basis. We will identify and apply for technology, industry and business awards, using case studies to support our applications. Social media will be used to highlight attractive use cases, resellers, partners and positive media coverage.
Communication to the sales channel via e-newsletter will encourage sharing of PixelPipe Signage projects. We will identify product evangelists and promote specialists in our reseller network.
Each SSVC region will have a full-time Product Champion to ensure PixelPipe Signage is front-of-mind and our account manager will make frequent visits. We already participate at SSVC partner exhibitions and will increase this activity in line with geographic expansion.
Messaging will concentrate on simplicity and ROI for the user; promotions will focus on problem-solving for users. Content will be translated for different markets. We intend to use video marketing in combination with vertical market trade shows outside the digital signage market, where we stand to gain most traction. At-cost or free installations at sites that demonstrate the message can be used to kick-start this.
Bryan Crotaz is an established expert in the digital signage market. Positioning him as a pioneer and innovator, we will expand his presence on the speaking circuit from the digital signage community to the broader business and, later, consumer or national press.
There are multiple digital signage solution providers. Many are small, local AV systems businesses who have developed simple solutions. A small number of larger companies with national and international operations are more broadly visible at the enterprise level and have not successfully targeted the massive single-screen market.
The better known suppliers’ systems are generally recognised to be cumbersome and outdated thanks to the maintenance of legacy installations burdening their development investment. Scala, the most recognised, offers a solution thought to be based on old technology.
Aperture image and video processing technology was developed to be efficient on the latest tiny processors. PixelPipe Signage harnesses this while using the latest digital screen and cloud computing technology. It’s engineered specifically to be simple to install and operate while being highly scalable. PixelPipe Signage features a built-in system for user generation of their own broadcast-quality content. Bespoke templates are available on demand and represent another revenue stream. A major point of difference with competitors is that simple updates – price or location changes, error correction or messaging updates – don’t require an expensive reshoot and can be made with an in-app purchase costing the same as a couple of greeting cards.
We believe that this USP, the global distribution network of ScanSource and their passion for both this product and the industry will enable us to gain a significant foothold in the UK, Europe and North America over the next 12 months. With recurring licence fees and in-app purchasing, we expect the system to deliver much higher revenues within a short time frame.