Digital Signage: Should You Rent Or Buy?

Digital signage networks are expensive. In fact, the primary reason why most business owners and managers decide not to invest in a system is the price. In other words, it's not the ROI, the functionality, or flexibility that stops them. It's the money they need to spend upfront in order to deploy the system. This is the main challenge that sellers have to overcome, even as prices for the software, hardware, and content continue to decline. A small system can still cost tens of thousands of dollars, which is significant to most budgets.

If you're a business owner and you've been considering whether this kind of investment makes sense for your company, realize that buying isn't your only option. In this article, we'll explore the pros and cons with buying a signage network versus renting one.

Advantages Of Renting

There are a lot of reasons why renting a network can be attractive. First, you won't need to invest as much money upfront as you would if you were to buy. For a small company, that can be a major advantage. The availability of cash flow for daily operations is critical to small businesses. By renting a system, they can preserve this cash flow.

Second, renting allows the business owner to identify features or hardware that are unnecessary. Most rental contracts are flexible enough to allow the operator to get rid of components that aren't needed. Third, when you invest in signage, you're effectively locked into the technology. Because the industry evolves quickly, that technology may become outdated quickly. Renting only locks the operator in for the terms of the rental contract.

Disadvantages Of Renting

Lest I've made the argument above too compelling, renting isn't a perfect solution. It has its potential drawbacks. First, the rental company that provides the signage will be supporting a number of customers. That means their availability will be limited. If you have questions regarding how to do something, or the software or hardware is failing, support may be slow.

Second, even though you'll save money by not having to invest a substantial amount upfront, you won't ever own your system. In effect, the rental fees will be an ongoing expense for your company. Third, the rental company may have bandwidth issues which impact your ability to distribute content across your screens. Lastly, there might be limitations inherent in the network which prevent your using certain types of multimedia.

Leasing: Another Option

An increasing number of companies are now offering leasing contracts. Leasing offers many of the same advantages of renting, including preserving cash flow and allowing the operator to keep up with new technology. However, unless you pay the residual value when your contract expires, you still won't own your signage network.

Deciding To Buy

Buying signage requires careful planning and budgeting. Even small networks that are comprised of less than 100 screens can require a hefty upfront investment. Keep in mind that when they're used properly, they can drive an impressive ROI. But, when your budget is tight, financial resources must be preserved for day-to-day operations. In that case, renting (or leasing) gives you access to the advantages of a digital signage network while allowing you to manage your cash flow.

If your company has the budget to purchase a network, review the ROI that you expect it to deliver. Approach it from a financial perspective. You may find that your signs become one of your most productive investments.