DALLAS—Interactive services, self-installed options, the presence of cable and telecom operators, new smart-home technologies—It truly is a pivotal time for the residential security industry. To help sort it all out, Security Systems News caught up with Tom Kerber, who leads Parks Associates research in the areas of home controls, energy management and home networks.
In terms of the overall impact on the industry, Kerber noted that Parks Associates’ initial research shows that “almost half of the new subscribers are getting their services from the cable and telecom operators. Again, this is based on a small sample size, but those are really dramatic numbers and a significant move for the industry.”
While Parks Associates said that interactive services are having a positive impact on RMR, the research firm is taking a close look at whether that trend will continue over the next several years.
“In our last two data points, and we are talking about 2,000 to 3,000 consumers in Q2 and Q4, RMR did show a slight flattening off,” Kerber said. “We are going to look at other data sources to try to confirm this, but we may have to adjust our estimates down a bit to show that number flattening, not declining, but a flattening out of RMR potential.”
He explained that while interactive services can be found in the majority of professionally monitored household security systems today, there are “a lot more dynamics going on than there have been in past years,” he said.
One is the ever-increasing presence of cable and telecom operators on the residential side, who are claiming that they have lower creation costs and a competitive advantage, because they’re selling to existing customers in most cases. They also say their massive marketing budgets give them an advantage as well.
Kerber added that the good news overall is that the industry is growing. “These new entrants are doing their part in growing the market overall, and by doing so, lifting the other players as well.”
Another major trend impacting the industry is the growth of self-installed systems or DIY, as well as self-monitored systems, Kerber said.
“That is of particular interest, and we are finding that for someone who has had a security system installed in the last year, almost a quarter of them said that they installed it themselves. Now, this number is based on a small sample size (more than 200 people who have had their security system installed in the last year), so you can’t take it to the bank, but that is much more than it has been historically, and it is of interest for further research and analysis.”
With increased competition, Kerber asserted that traditional dealers today need to offer what new customers want, such as interactive services, home control options, and even a DIY or self-installed option, if they want to compete for the new business. “The more traditional dealers have to find out how to work that into their business plan—to offer customers a lower-cost install option,” he said.
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