Here at ST, we love surveys. In addition to the structured, professional research studies we publish, such as the CAS/Commercial State of the Industry (SOI) report in this issue, we always like direct feedback from sign companies. In the past, we’ve conducted surveys for vinyl, banners, digital service bureaus and, more recently, neon/lighting. For this installment, we wanted to look at electronic message centers (EMCs).
The results presented here are based on 26 responses, so it would be inappropriate to extrapolate this data as representative of the entire electric-sign industry, but interesting enough as a cursory look. Here are the highlights:
* EMCs account for approximately 10% of electric-sign company sales volume.
* Electric-sign companies pay an average of $24,594 per EMC component, and they sell 11.7 signs a year that include EMCs.
* 96% of EMCs are used outdoors.
* LEDs are preferred over wedge-base technology by approximately 2:1.
* 47% of sign codes prohibit or restrict use of EMCs.
* 88% of EMCs are monochromatic.
* The EMC component accounts for slightly more than half the cost of the finished sign.
* Electric-sign companies generally mark up an EMC 45% for a final selling price.
* Electric-sign companies also sell an average of $90,190 a year in manual, changeable-copy readerboards.
The annual sales volumes of the responding companies ranged from $250,000 to $24 million, with an average sales volume of $3.4 million. That’s higher than the $3 million sales-volume average of respondents to last month’s Electric SOI study (see ST, July, page 90).
The median sales volume of $2 million is much lower than the overall average, because two respondents reported sales volumes of $13 million and $24 million. Our Electric SOI’s median sales volume, $925,000, is less than half of what this survey shows, so these results come from the upper echelon of the electric-sign industry.
Four companies reportedly don’t sell any EMCs. One company, which didn’t disclose its sales volume, is a hybrid. Originally, a large sign company, it now acts as an EMC OEM that wholesales to other sign companies as well.
The companies reported selling between 2 and 60 EMC signs annually, although a majority sells less than 10. The EMCs they purchase cost between $2,000 and $120,000. However, all but three respondents pay up to $40,000 for an EMC component. At the low end, sign companies averaged paying $10,088
per EMC component, and, at the high end, $40,250. This suggests an average cost of $24,594 per EMC component.
End-users
Our respondents tend to have specific categories of EMC customers. The questionnaire suggested six categories: banks, shopping centers, civic centers, retailers, entertainment facilities and churches. Twenty-one companies responded to this question.
Here are the results. The first number indicates the number of respondents who sell EMCs to each end-user category, and the second figure is the percentage this category represents for all end-user categories:
* Banks: 17 companies, 33%
* Retailers: 13 companies, 19%
* Entertainment centers: 10 companies, 12%
* Shopping centers: 9 companies, 9%
* Civic centers: 8 companies, 6%
* Churches: 5 companies, 4%
In the "other" category, three companies mentioned schools (one sells EMCs only to schools). Other mentions included automobile dealers, restaurants, hotels, clinics and sports stadia. A $3.2 million company said it sells EMCs exclusively to hotels, and it sold 30 in 2001. Only two other respondents sold more, one 35 and one 60.
Pricing
EMC signs account for 9.8% of respondents’ sales volumes, and the EMC component accounts for 51.6% of the EMC sign’s total cost (median of 60%). So, for a rough figure, EMC components would equate to 5% of an electric-sign company’s sales volume.
Respondents reportedly mark up EMC components by 44.8% on average. Markups fluctuated between 11% and 80%, with a median of 31%. Most were multiples of 10 because markups were reported at 1.3, 1.4, etc.
The $1.4 million company that sold the most EMC signs (60) in 2001 used two distinct markups. Signs wholesaled to another sign company included a 35% markup on the EMC component, while signs sold directly to the end user carried a 65% markup. Further, this company paid between $2,400 and $40,000 for its EMC components, and EMC signs accounted for 35% of its 2001 sales.
In 2001, respondents averaged selling 11.7 signs that included EMCs, with a median of 6.
Lighting
A vast majority of EMC signs (96%) are installed outdoors. Fifteen of 22 respondents said they only sold outdoor EMC signs. Six sold no more than 10% of their EMC signs for indoor applications. The only exception, the large hybrid company, sells 60% outdoor and 40% interior EMC signs.
LED EMCs are preferred over wedge-base EMCs by a near 2:1 margin (66%/34%). Ten of 21 responding companies sell only LED EMC signs, and three sell only wedge-base EMC signs. Not one company reported selling fluorescent-bulb EMCs.
A vast majority of these EMCs (88%) are monochromatic. Half of the 16 respondents sell monochromatic EMCs exclusively, including seven of the eight smaller respondents. However, for the eight larger respondents, only one doesn’t sell four-color displays. Among these eight bigger companies, roughly one-fifth (21.5%) of the EMCs they sell are four-color. One company reported selling three-color EMCs.
Hands-on experience
EMCs are a sub-category of changeable-message signs, so, out of curiosity, we added a question about non-electric forms of changeable-copy signs, including manual readerboards and "dynamic" signs, which have been the subject of our most-recent "Digital Sign Technology" columns. No sign companies reported using any dynamic signage, and we didn’t expect that they had; the OEMs are still trying to figure out their markets.
However, time-honored manual readerboards are more popular than EMCs. Not everyone answered the question about non-electric, changeable-copy signs, but only one company that answered did not mention manual readerboards.
Twenty companies reported selling an average of $90,190 annually in manual readerboards, with annual readerboard sales ranging from $1,000 to $300,000. One company didn’t specify quantity or total volume, but said it sold readerboards for $4,200 each. Another simply said readerboards account for 3% of its overall sales.
Code red
We also asked, "What percentage of the time have you encountered sign codes that prohibit EMCs, or limit the frequency with which the message can be changed?" Overall, respondents said slightly less than half the time (47%), with answers ranging from 0% to 100%, with a median of 50%. This shows that sign codes run the full gamut of EMC restriction.