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Cisco Systems is jumping into the growing digital signage market with the introduction of a new Digital Media Manager and Digital Media Player duo.

With its entry, slated for Jan. 16, Cisco is declaring that digital signage is an emerging technology market that could represent a $1 billion business opportunity five to seven years down the road. Digital signage is the fourth enterprise video segment Cisco has entered in the past nine months, following the San Jose, Calif., company’s launch of IP video surveillance; desktop video; and its next-generation videoconferencing system, called TelePresence.

Cisco’s Digital Signage system, which enables enterprises to publish, play back, and manage digital media on a network of digital plasma or LCD displays, is one of the first plug-and-play systems available from a large manufacturer, according to Melissa Webster, an analyst with IDC.

“It’s been a hugely fragmented market. There are more than 150 vendors who make software and the media players, and most are under $10 million in revenue,” Webster said. “What we haven’t seen is an enterprise plug-and-play approach from a very large vendor. Cisco is very able to provide plug-and-play solutions.”

Among the large display manufacturers in the space—including NEC and Panasonic—only Sony has moved into the software and media player side with an offering it introduced in Europe, Webster said.

Cisco is transitioning to a software-oriented business model. Click here to read more.

Cisco, as part of its Digital Signage rollout, is partnering with display maker NEC, which has an “ecosystem of partners to get these out and running,” said Thomas Wyatt, director and general manager of Cisco’s digital media management business unit. The two vendors will offer packages that bundle Cisco’s Digital Signage system with NEC displays, and they plan to provide more detailed integration of their products over time.

A perfect storm of changes in market dynamics for digital signage has spurred market growth of more than 50 percent annually, although IDC has not yet published its market-size estimates, Webster said.

“LCD prices have come down significantly in the last few years, so it’s an attractive venue now to get messages out. The IP network is more a platform for new services such as video. Branch locations have better connectivity with more ubiquitous broadband, and retailers have been spending more on in-store media as a way to advertise in a more targeted and personalized way,” said Cisco’s Wyatt. “And 2006 was the year consumer video took off with YouTube and iPods. Now that’s moving into enterprises.”

Cisco pegs the total market for digital signage and desktop video at $404 million today and expects that to grow to $3.63 billion in 2011.

In addition to sales and marketing for retail and banking, digital signage applications include corporate communications, training and information sharing.

Mike Chang, an early Cisco user and president at Fantasia Coffee and Tea, sees the Cisco Digital Signage system as a flexible tool for communicating with customers and promoting specialty drinks while customers stand in line at his five stores.

“Right now, we’re using it to promote a drink and to communicate the health benefits of tea,” said Chang in Cupertino, Calif. “And we’re using it to let customers know of our other store locations. It’s a more dynamic and impressive way to communicate with our customers.”

Cisco’s Digital Media Manager provides Web-based media management. The software can discover, group, manage, monitor and report on remote media players. It also manages and schedules playlists, screen zones and customizable templates deployed on the Cisco Digital Media Player.

The 1-pound, small-form-factor Digital Media Player attaches to the back of the digital display and remotely manages the display as well as local storage. It provides full-screen video and is IP-addressable. It supports MPEG 1, 2 and 4 in standard and high definition as well as graphics, Web content and tickers.

The Digital Signage system is available now. The Digital Media Player is priced at $1,490. The Digital Media Manager’s price depends on configuration; a Digital Media Manager with 50 players costs $150,000.

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