I'm back from LDI

The Las Vegas Show

What an amazing weekend! The stars were all in line for me, I got a seat on the plane with Melanie and Erica, two Dallas Cowboy cheerleaders. Melanie is studying to be an engineer and Erica wants to be an evangelical speaker. At the LDI Show held at the Las Vegas Convention Center there were more lights and video walls than on the strip. It was overwhelming. Now I had David Roberts with me and he was able to point out the little flaws and limitations for each of the products and companies on the floor. Now I see things completely different.

SGM                                                 

Then he took me by the SGM booth and right away I picked up on the crowd’s interest in what was going on at this booth. They had a G-Spot light on the floor shining up and one hanging from the ceiling shining down with a P-2 and P-5 light shining up and G Series light shining down and water running off of the hanging light, onto the grounded lights

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Then David explained to me that the G-series (G-Spot and G-Profile) lights were the only IP65 rated full motion lights on the market. He went on to explain to me that these lights have internal humidity control systems to keep the internal moisture levels at their optimum. Then he explained that in the LED world they are making lights, more than just illumination. These light fixtures can be programed to be softened, to change color, warmth, pulse, flash, change colors and patterns while focusing and framing.

AESON

There were video wall all over the Las Vegas Convention Center and they all had amazing colors, images and patterns displayed on everyone but David pointed out some with little pixel shadows of red, yellow and blue on one companies display that gave its image a vibration effect and not on purpose. There were big companies like GE, Panasonic, Abson and Daktronics and a whole bunch Chinese manufactures there and all they had was their run of the mill LED video walls for indoor, outdoor with pixel pitches from 16mm down to .69mm. Then we got to the AESON booth. The first thing to jump out at me was the 3D modules in front of the desk. Then they had the transparent video walls on display. They were the only transparent and 3D video wall in the hall. They had their magnetic, modules, the IP65 waterproof outdoor product they made for Sea World, the aluminum alloy and the cast aluminum frames on display with large walls from 2mm to 9mm pixel pitch of different sizes and configuration. It wasn’t how this booth was set up or the images displayed or how they were configured. Attendees were flocking to the AESON booth because of their variety of products. Then they got to hear about the really good part, their pricing, their service, quality and guarantee two years and up to five on some products. On top of that they have their own trusses and rigging.

The Man

The President and CEO of AESON is a real character. He was wearing orange/pink tennis shoes, matching pants and pink poka-dotted shirt and socks to match. He has accounting and clothier business background and he explained how he has relationships in China with the product specific experts who manufacture his product to his specifications. The first thing attendees would ask when they walked up to him was “How much?” Then he would break it down “Indoor or outdoor? What pixel pitch and lumen do you need? What are the dimensions? Do you want DMX controlled…..etc” Then he would tell them his pricing cringing almost as if he was worried about offending them and they would be blown away. It wasn’t that he was the cheapest, compared to the Chinese video wall products but with the guarantee and service the price compared to Apson, Panasonic, GE and Daktronics is where the sweet spot is.

I brought him a ringer, someone who has been in the stadium industry since before he graduated high school and he consults for venues around the world and he knows who has what and how it’s all done and when Michael Weiner got finished with him he spilled the beans. “I have to use the company I rep for who sponsor these international events but they lease this equipment for the event and pull their equipment out of there. I am looking for legacy equipment and the company I rep for, just for these international events is to cost prohibitive, the venues can’t afford it but they can yours with the service and guarantees”.

Loaded for bear

I don’t know everything but I know who does and I know what I’ve got with DX2!

Use LED to increase Cap Rate

It's all about ROI

When you buy commercial real-estate the true value isn't just what was paid for it but by what it produces. You need to figure out the income it earns and subtract what the costs are to maintain the property, this is called CAP Rate. By reducing the costs to operate a property you increase the percentage or income as per the cost of the property. When comparing two commercial properties that are priced the same, the one with the higher CAP Rate is more desirable and will either sell faster or a higher sales price can be justified by buyers bidding the price up, higher rents can be justified and higher occupancy can be realized.

Happy tenants, happy accountant

I have spoken with commercial real-estate property managers and they didn't seem to care about making any efforts to lower the power bills for their properties because their tenants paid the energy bills and they had all of their units rented. When new units come available from new construction or existing properties are remodeled and retrofitted for LED reducing their energy cost and everything else being equal a lower power bill can make all of the difference. As difficult as corporate CFOs can be, they do pay attention to the bottom line.

Any flat surface

If a property management company leases roof space to cellular phone companies generating income. Imagine vacant wall space on a building that you could mount a video wall and tenants in your complex could buy add space or even better sublet that add space to manufactures of products they sell ,i.e. cellular plans, radio stations, local TV programming and community events.

Money making activities

Whether it is saving money or making money, it is all business. Lowering energy bills, reducing maintenance, eliminating hazmat disposal expense and increasing lumens all make a difference and when you add them all up and you can show it in cash flow property managers and investors pay attention.

Illuminated Treasure

Disruptive Technology

In the LED world there are many incentives to retrofit Incandescent, Florissant, Metal Halide Lights....etc. Tax credits and rebates and high cost of EPA disposal regulation spur the Design Lighting Consortium certified products but when it comes to other markers for LED, the brightness and longevity are the only incentives.

The real treasure

So what has happened recently? I have had three LED resellers come at me with orders for LED Digital billboards. I wasn't going to look a gift horse in the mouth but wanted to take advantage of this trend when I decided to call on a billboard company I had seen recently. I Googled Out Front Media  and I read their announcement they the company formerly known as CBS Outdoor is now Out Front Media and they are on a campaign to convert their signage from vinyl to LED Digital. They have new investors and are able to stand on their own. With vinyl signage it can take a month to six weeks to get your advertisement displayed, after you get you artwork approved. The billboard company can charge up to $2,500.00 per month for that sign depending on the traffic. With a LED video wall sign you can display your add electronically. The owners of this advertising real-estate can charge $800.00 month, flipping every ten seconds through six to ten advertisements. The review is between $6,400.00 to $8,000.00 per month. A LED video wall billboard sign can cost over $250,000 but they can also cost as little as $46,000.00 depending upon the size and pixel pitch. They are moneymakers! If you wanted to buy a franchise from Starbucks to MacDonald's it is going to cast you four to 25 times this amount and you might not make any money for two to five years. If you could buy into a business where you could recoup your initial investment between seven months to a year, how soon would you want to get started? If you had inventory(Vinyl signs waiting to be converted to digital LED) how many investors do you think would line up to cover the conversion to LED Digital video wall signs?

ROI

Investment planners talk about "The rule of 72" this is the law of compound interest. If you take the annual rate of return on your month and divide it into the number 72 will determine how many years it will take you to double your money. When you back engineer this law you can estimate your return on investment. So if you can investment in seven months and double your money in 14 months by selling six adds per month you would realize a return of 43% the first year and you would be up 120%! If you sold eight adds per sign it would be work out to 210%. I had financial planning clients that have earned 23% over the last five years and I feel pretty confident about that.

Risk

We have all heard "Risk vs return" but that why you buy insurance which are paid for out of the advertising costs. You also have legislative risk. Some municipalities restrict the use of video display adds along the highways. It is odd with the amount of traffic in Las Vegas where every sign is a video advertisement or downtown Dallas where it is okay but in the outskirts of Dallas it is a long permit process. When you calculate the environmental benefits of LED compared to the chemicals used to paste up vinyl sign not to mention the disposal cost when you change the advertisement, legislators might ease the restriction for LED video wall signage.

It's a trend

With all of these considerations you can see the increase in video wall billboard advertising. Every time you see a vinyl billboard sign will make you add up the potential being lost. I see web-sites for TV, movies and cell phone companies with 5G plans for car passengers to watch on their smart phones, IPads and Tablets.