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Cable Companies Merging, but Still Struggling with Home Security

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February 19, 2014
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Cable Companies Merging, but Still Struggling with Home Security

You may have seen the recent news: the largest US cable provider (Comcast) is acquiring Time Warner. And it just so happens that both of them have been trying very hard to break into the home security and home automation business. They are learning that it’s not as easy as they thought. But here’s the article on the Comcast/Time Warner deal.

Comcast Corp. (Xfinity) has agreed to buy Time Warner Cable Inc. for $45.2 billion in an all-stock deal that combines the two largest U.S. cable operators, both of which are playing heavily in the entry-level home automation market using the same DIY platform from iControl. According to Reuters, the deal, must be approved by antitrust regulators from the FCC and the U.S. Department of Justice.

They’re Baaaack…

As we’ve written before, this is not the first time that cable and telephone companies have ventured into the highly competitive arena of home alarms. It did not go well last time, but for some reason they are back – and with huge advertising budgets for “bundled” services that include home security and home automation. These days we call these wannabe security providers the “new entrants.”

The combined company would have 30 million cable customers, or about 30 percent of all U.S. cable TV subscribers. According to analysts, the two companies would save $1.5 billion in operating costs. Both companies in recent years have entered the home automation market, heavily advertising their wares - Xfinity Home Security and TWC Intelligent Home.

They’ll Save Money – But Will Their Customers?

There has been a lot of discussion already about whether this is a good deal for consumers. Generally speaking, less choice means higher prices. And evidence from other similar mergers has shown that the savings are not passed on the customers of the combined entity: just the opposite is what often happens. Lastly, there is the really big challenge for these companies: does a bigger company mean better service? Probably not!

Grim Statistics on What Cable Customers Think

In case you are wondering if the existing alarm industry operators – you know, the companies like FrontPoint that have been providing true 24/7 peace of mind for years - are worried about the competition, just read this article on cable company customer satisfaction levels. A firm surveyed 10,000 people to get the results!

This may be surprising, but most Americans really don’t like their cable companies. CNET reports that research firm Temkin Group has just released a massive customer satisfaction survey of around 10,000 American consumers and has found that pay TV companies account for the six of the seven worst-rated companies in the United States.

The Bad News

Charter Communications, Time Warner Cable, Cox Communications and Cablevision all had customer satisfaction ratings of below 30% while Comcast and Verizon’s pay TV services both had ratings of exactly 30%. The Temkin survey follows a survey earlier this year from the American Consumer Satisfaction Index that showed American ISPs, led by cable providers Comcast and Time Warner Cable, had the lowest customer satisfaction of any industry in the United States, including airlines and health insurance companies.

What the Survey Means

Cable consumers are fed up with the low level of service they receive, and already have indicated they don’t trust their cable provider with home security – no matter how convenient. Comcast and Time Warner have been previously reported as two of the ten most hated consumer service providers in America. In fact, the CEA (Consumer Electronics Association) also ran a survey of cable subscribers, and found that only a third of them would feel comfortable having their homes and families protected by their cable provider. If you are one of those companies, that’s gotta hurt.

Back to Comcast/Time Warner: if neither company has what it takes to compete with “real” alarm companies, is a combined entity any better off? We don’t think so. These companies don’t seem to grasp is that peace of mind really is a different proposition: just because you have an Internet “pipe” into a consumer’s home, that doesn’t mean homeowners are ready and willing to sign up for your latest “bundled” offering.

Cellular is Safer – and More Reliable

It’s also interesting to note that every single one of these new entrants, without exception, uses the cellular network for primary or backup transmission of alarm signals. Yup: they all use cell, because they know that cellular is safer. However, most of them use the Internet for transmitting a majority of their overall signals from the home, which is why the systems are referred to as “IP-enabled.” In other words, they picked the wrong technology platform! As regular readers of this blog know, the best home security systems rely on a safer and more robust cellular connection for everythingnot just for alarm monitoring, but for the advanced interactive services as well.

There are very few truly nationwide “real” alarm companies focused on protecting your home and family, and FrontPoint is one of them. We’re happy to see increased consumer awareness of interactive monitoring services and home automation, especially since these are exactly the advanced features that FrontPoint has offered since our inception in 2007. The more people research their options, the more they are choosing a proven provider like FrontPoint. As the leader in wireless home security, we offer the best protection: that’s why we’re the #1 ranked alarm company in the US. FrontPoint systems are safer, smarter, simpler, more affordable, and virtually impossible to defeat. And, compared to what you’ll likely experience from these “new entrants” to home security, you’ll be thrilled with our service.

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