We’ve been talking a lot about consolidation in the digital signage sector because there are way too many solutions options out there. But not all that consolidation is going to be on the M&A side.

Sometimes, it will be two companies choosing to work together instead of competing.

Consider the news this week about a deal between BrightSign and signagelive that means the former’s nice little non-PC HD video players can run on networks using the latter’s cloud-based digital signage software.

signagelive will have, says a release, a BrightSign Standard Edition with full screen media support and a BrightSign Pro Edition with multi-zone content capabilities.

“We selected BrightSign players for their proven reliability, advanced features and ability to get the most out of our signagelive platform,” said Jason Cremins, CEO of signagelive. “For the first time, the BrightSign range of networked devices can be integrated with signagelive to provide a solution that rivals the technical capabilities and stability of more expensive PC-based solutions. It is my belief that our combined offering provides the best price/performance of any digital signage solution available today.”

“We’re very pleased to have the opportunity to expand our worldwide presence with a leading software brand like signagelive,” said Jeff Hastings, BrightSign CEO.  “BrightSign and signagelive are both strong, well-respected brands with loyal customer bases that continue to grow.  We view the combination of our brands as a win-win situation that will accelerate business opportunities for everyone involved, including the distribution and reseller channels.”

BrightSign has its own software solution for networked digital sign deployments, but the company at its core is about hardware players. The company spun out from Roku, one of the bigger players in the streaming video space. BrightSign was founded and still chaired by Roku’s CEO, so the access to R&D and low cost media decoder technology is terrific.

BrightSign has very nice little low-cost boxes that play smooth video, are easy to use and manage, have no moving parts and consume very little energy. But the platform is more oriented to small and medium business than it is to mass-scaled networks — the arena signagelive comfortably plays in.

The two companies working together means BrightSign and its resellers have options on which model best suits the requirements and scale of the job. Instead of losing a project that might be beyond the abilities of its free BrightAuthor software, they can now compete and win the hardware deal with signagelive as the software engine.

For signagelive’s guys, they’re now integrated into a low-cost hardware platform specifically focused on digital signage and a business with a global distribution network. I have heard BrightSign moved more than 100K units in 2011, in an industry where most companies are popping champagne for 1,000-unit deals. I know signagelive’s Cremins has flat said his company is about software, and has put hardware efforts instead into partnerships with companies like Advantech, IAdea and now BrightSign.

The combo service will be demo’d at ISE 2012 in Amsterdam later this month.

This is a really interesting development in that the rap – fair or not – about non-PC media play-out solutions is that while they were lower cost and reliable, the software was pretty basic and not really built for scaled-up jobs. Meanwhile, software companies feel endless pressure to get their platform running on the lowest cost boxes possible.

The single unit prices for BrightSign units in the company online store would be in line or possibly even more than lower-end PCs, but my guess is that comes down nicely with volume, as it does with most things in this space.