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1) Cable/telco home security products are not taking share from ADT Corp. and other traditional home security companies, according to 12 of 14 dealer sources. 2) Six sources said cable/telco companies have increased their advertising and marketing materials despite still being in rollout or the test phase in most cities. These efforts have yet to result in customer attrition for ADT and other traditional companies. Only three of 18 sources said cable/telco vendors eventually could become a viable threat. 3) Cable/telco companies could benefit from their all-in-one bundles, low prices, and home automation features for consumers’ smartphones and tablets. 4) However, all sources questioned the cable/telco companies’ expertise in home security, the dependability of their wireless connection, their background checks of employees, their response time, and their customer service. Most importantly, sources stressed that cable/telco products offer “video surveillance” rather than “video security.” 5) ADT’s market position is strengthened by its high-tech Pulse solution, which has attracted the attention of customers seeking home security automation. Two sources mentioned ADT as a potential takeover target for a cable/telco company. 6) Among the cable/telco providers, Comcast Corp. was cited as having the best chance to penetrate the home security market.One finding that I would question immediately is #6 – the notion that Comcast has the best chance to penetrate our industry. With Comcast’s dismal service reputation, it’s hard for me to believe that people will turn to them for peace of mind, at the expense of other alarm companies. Here are some interesting responses from the report’s survey questions.
In other words, these respondents are not terribly concerned about the new entrants. While it’s possible that the alarm industry is just sticking its head in the sand by ignoring our well-funded competitors, reports from around the industry seems to indicate just the opposite: that the cable and telco providers are requiring more time than expected to launch their offerings, and that the “take rate” for their alarm services is below forecast. It’s possible that AT&T may fare better than the others – too early to tell. Which Companies Will Win? The alarm companies who are best positioned for success (and will suffer the least from increased competition) are those that have built trust, while developing a reputation for world class service. And of course, it’s important that they offer the most advanced interactive home security and home automation services. Those companies – and FrontPoint is definitely one of them -will take full advantage of the increase in overall market penetration that is to come. FrontPoint is happy to share information on everything from home alarm technology to industry trends. We’ve spent years developing the best methods to protect homes and families, and it shows in our reviews. That’s just one more reason that FrontPoint is the recognized leader in wireless home security: we have proven solutions for all your home protection and automation needs, with systems that are safer, smarter, simpler, more affordable, and virtually impossible to defeat. That’s why FrontPoint is the #1 ranked alarm company in the US.
- Cable/telcos’ entrance into the home security market has had no effect for 12 of 14 dealer sources. Of the remaining two sources, a president for a high-end company in the Chicago area said his business is down 10% for the year as a result of the new, larger players. The remaining source said the cable/telco companies are slightly chipping away at market share, but have not yet created much concern.
- Four sources, including two who work with ADT, agree that cable/telco companies have yet to affect the home security industry. Customers can find better value and security in ADT’s Pulse if they are seeking home automation features. [Of course, we know a lot about Pulse – both the good, and the not so good.]
- “I do not know what brands they are using, but the level of service just is not comparable. We respond right away, and we are bonded, insured, finger-printed and licensed. … On these service calls with the cable company, one guy will not be able to fix it so he will have to call another, and pretty soon you will have two strangers in your house. … Plus, they do not know what they are doing.”
- “I do not think these companies are converting any of our customers or hurting the traditional security business in any way. I have not had a single legacy system taken over by Time Warner or Verizon, and I think we have lost one account to Comcast in the last nine months. They were coming up for a long-term contract renewal and were obsessed with thermostat automation, that whole ‘intelligent home’ idea saving energy and heating costs.”
- “I see these news reports that Comcast and Time Warner are getting into home security, but I do not think it will play here. People around here hate the cable companies. They hate the service, or the lack thereof. They hate the pricing. They hate seeing a bigger and bigger share of their paycheck go to the company that really only runs a luxury entertainment service. They do not want to turn that entertainment check into a necessity, which is what security alarms are.”
- “The alarm companies are warning customers that it is going to be the same old cable story. They are saying, would you rather have a company that responds to all your needs immediately, or one where you call and have to wait and wait for service that may take three, four, or five days or even a week to respond to a problem?”
