Update on XFINITY Home Security : Comcast Struggles with Move into Home Security

Comcast is completing its roll out of the XFINITY ™ Home offer that “bundles” home security and home automation with other Comcast services. By the way, bundling means you can’t get the home security services alone: you have to be signed up for other Comcast products as well. You may have seen prior posts (here and elsewhere) explaining why cable companies are diving into home security: Comcast and the other Multiple System Operators (MSO’s) have extremely high cancellation rates, combined with stagnant top line growth, so migrating into home security seems to make sense – to them. However, they are learning that protecting homes and families is not as easy as they thought. And here’s a recent article from an online financial publication that adds some valuable perspective.

Through Xfinity Home, Comcast offers home security options along with its cable TV, broadband, and phone products. In addition to alarm systems, one can install remote surveillance cameras. (Perhaps one could say that for your personal security, you just need to know whether your teens and their friends are raiding the liquor cabinet after school.) It's also touted as a green product, with features that allow you to remotely control lights and thermostats, for example. The company isn't the only one trying to tap into Americans' desires for safer and more automated homes. In addition to companies like ADT, for which home security is a core product, Comcast's major rival, Verizon, has gotten into the business. There's a massive U.S. market for such services; this past spring, Comcast Cable Communications President and CEO Neil Smit described it as measuring about $9 billion.

Hey, wait a minute... what about FrontPoint? Those are exactly the advanced home technologies that we specialize in! Guess FrontPoint needs to get a little bigger before we get mentioned in these articles along with ADT and Verizon – and we’re working on it! Comcast Losing Customers – and Why

Some investors may view Xfinity Home as a big boon for Comcast. After all, it's another potential growth channel, and could drive a lot of extra revenue. And Comcast's need for more revenue probably shouldn't be underestimated, considering the fact that it has been losing basic cable TV subscribers in droves for many quarters now. In August, Comcast reported losing 176,000 video customers in its most recent quarter, which was actually an improvement from previous rates of attrition. While it's true that the shaky economy probably is behind the loss of many customers who now are focused on more important bills, there's another reason that investors should think twice about Comcast: a lot of American consumers despise the company.

Good Service Matters… More than Ever

Comcast is notorious for bad customer service, and it's a common name on lists of the most despised American companies. For example, The American Customer Satisfaction Index rated Comcast No. 4 on its list of most disliked companies. Comcast has been a contender in the Consumerist's Worst Company in America competition for years, and in 2010, won the "gold." There's even an "I hate Comcast" page on Facebook, with nearly 17,000 members who consider themselves "customers, ex-customers, and victims of Comcast."

Bad Strategy Means a Bad Investment?

Comcast may be pushing more heavily into security, but there's no security for investors who buy its shares. Why on Earth would a corporate management pursue a new product line when so many of its core customers aren't even pleased with its traditional products and services? Why expand offerings when many consumers already feel like the infrastructure and customer service stinks? Why spread resources thin under such tenuous circumstances? Customers' goodwill is on the line.

Ouch! We have heard (anecdotally of course) that the rate of adoption for XFINITY Home has been underwhelming: in fact, by the time Comcast expected to have 50,000 home security customers, they only had about 10,000. As I said, that is only anecdotal, but to those of us who have devoted our professional careers protecting lives and property, it’s hardly surprising if consumers are reluctant to trust their peace of mind to an entertainment company with a decidedly poor service reputation. There are other online references to the Comcast XFINITY Home offering. One web site affiliated with Consumer Reports fielded many comments that indicated a “thumbs down” even before the product launched. My favorite is still this one, a simulated response following an alarm event:

“We just received an alarm from your XFINITY Security System. The police are scheduled to arrive between 9:00 am and 1:00 pm next Thursday. Please make sure someone is home to let them in. Or, if you prefer, you may choose the self-arrest option.”

This is darkly humorous, and is also a painful reminder that Comcast is out of its depth in trying to provide true peace of mind. As a “real” alarm company that is focused on protecting homes and families, FrontPoint welcomes the advertising budgets that new entrants like Comcast bring to increasing public awareness of interactive monitoring services – exactly the advanced features that FrontPoint has offered since our inception in 2007. We also expect that the more people research their options, the more they’ll choose FrontPoint. As the leader in wireless home security,  we specialize in 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 you’ll be thrilled with our service.