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Can Cable Companies Really Compete with Alarm Companies?

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February 23, 2012
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Can Cable Companies Really Compete with Alarm Companies?

With many of the cable and telecom “big boys” now having entered (or re-entered) the highly competitive sector of home security, it was only a question of time before Time Warner got back in the game. I say “back in the game” because they were once engaged in the business of protecting homes and families; however, like most of their colleagues in cable and telco who tried, they exited the alarm space some time ago. But now they have returned, following in the footsteps of Comcast, Cox, Verizon, Rogers (in Canada), and even AT&T. The alarm industry is watching these new entrants closely, and there is plenty of speculation in the press, as this article from Bizmology demonstrates.

Traditional security services providers have some formidable competition ramping up in 2012. Telecom and cable powerhouses Time Warner, Comcast, Verizon, and Rogers Communications, among others, are expanding their security and “smart home” services to customers. Time Warner’s Intelligent Home, Comcast’s XFINITY, and Roger’s Smart Home Monitoring security services have been rolling out in select markets nationwide and in Canada. Verizon’s Home Marketing and Control service launched in late 2011.

The hidden fact is that the average home alarm customer stays around much longer than the average cable customer: by “bundling” monitored home security with existing cable services, the cable giants believe they can stem the tide of cancellations on their more profitable services by adding the additional service.  But the question remains: can cable providers actually compete?

Focus on Advanced Interactive Services

In addition to a range of familiar security and safety services, the cable and telecom companies provide modern options such as remote live video monitoring of homes and access to security systems through smartphones and tablet computers. Some companies have partnered with iControl, a software company that also works with traditional security companies such as ADT, to develop their broadband-based management products.

Funny… the best alarm companies have been offering these services for years, and are not only ahead of the curve on what it means to offer true peace of mind to homeowners, but also have demonstrated expertise in supporting and integrating these services: companies like FrontPoint!

More Old News for the Better Alarm Companies

Gaining attention with customers looking to save energy are new “smart home” features, sold alongside security options, allowing customers to control the thermostat, lights, and appliances through their smartphones or computer. The systems are highly customizable and customers can request text or e-mail alerts be sent when certain security and home features are accessed. Many of the larger firms in the $15 billion US security system industry have already rolled out many of the same features.

Many of the larger firms? That's a bit of an exaggeration, but certainly the best home security companies have already integrated these advanced services.

Here’s the Rub for Cable Companies

Corporations best known for entertainment and Internet services, and in some cases customer service issues, may encounter marketing challenges promoting their expertise in the security arena.  Time Warner and Comcast, for example, ended up as #3 and #4 on a recent list of “most hated” companies in America, which isn’t much of a selling point.

Is this the company you want protecting your home and family? Many shoppers for peace of mind say no.

Time Warner Takes it on the Chin

Time Warner has been a public relations disaster for at least a decade. Blunders include usage caps, fees increasing each year faster than inflation and fraudulent business acts and bad services. In June 2011, a lawsuit was filed against Time Warner for refusing to make closed captioning available on CNN's online videos after being notified by disgruntled consumers. Recently it also aired pornography on children’s channels. For a long time, cable companies in general lacked incentives to improve their customer satisfaction, as they enjoyed sole franchise agreements in many cities. With competition from satellite companies, they are being forced to address service issues — but they have a ways to go. Time Warner has decreased two points since the previous year.

Comcast not Much Better

Complaints include poor communication of upgrade and billing changes, lost channels for customers who didn't upgrade to digital box or digital-ready TV, long waiting times for technicians and price hikes.

Public Reaction

Initial consumer reactions to cable providers offering alarms are mixed, with one web site affiliated with Consumer Reports fielding many comments that indicated a thumbs down. My favorite is this one, a simulated response from a cable company after 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."

As a “real” alarm company that is focused on protecting homes and families, FrontPoint welcomes the advertising budgets that these home alarm wannabees will 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: safer, smarter, simpler, more affordable, and virtually impossible to defeat.

 

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Comments
Alan Draper
February 27, 2012 at 5:01 AM
Based on my experience as a Frontpoint customer for over 4 years, yeah, I think this can only be good news for you guys. With your laser focus on best technology, pricing, and just as importantly customer service, you are clearly differenited in this market from everything I can tell. I think you definitely offer the best true value proposition of anything I'm aware of, and I looked hard a few years ago, and am not compltely divorced from it even now as it's still an interest. I think it's safe to say your current subscribers won't be going anywhere else in any material way, so you have defenses covered and offense seems to be as potent as ever. Thanks for the excellent wrap-around service Frontpoint continues to provide, and also for your dogged blog posts, the majority of which I find quite interesting... especially these "inside the industry" type posts. Keep up the great work Peter... and everyone at Frontpoint in general, thank you!
Peter M. Rogers
February 27, 2012 at 1:50 PM
Interesting tidbit here: we heard that Comcast had forecast about 50,000 new alarm customers by now, but they have closer to 10,000. Just industry scuttlebutt, mind you, but if true may it be an indicator that getting consumers to trust you to protect home and family is not that easy. Thanks, Alan.
Alan Draper
February 27, 2012 at 5:01 AM
Based on my experience as a Frontpoint customer for over 4 years, yeah, I think this can only be good news for you guys. With your laser focus on best technology, pricing, and just as importantly customer service, you are clearly differenited in this market from everything I can tell. I think you definitely offer the best true value proposition of anything I'm aware of, and I looked hard a few years ago, and am not compltely divorced from it even now as it's still an interest. I think it's safe to say your current subscribers won't be going anywhere else in any material way, so you have defenses covered and offense seems to be as potent as ever. Thanks for the excellent wrap-around service Frontpoint continues to provide, and also for your dogged blog posts, the majority of which I find quite interesting... especially these "inside the industry" type posts. Keep up the great work Peter... and everyone at Frontpoint in general, thank you!
Peter M. Rogers
February 27, 2012 at 1:50 PM
Interesting tidbit here: we heard that Comcast had forecast about 50,000 new alarm customers by now, but they have closer to 10,000. Just industry scuttlebutt, mind you, but if true may it be an indicator that getting consumers to trust you to protect home and family is not that easy. Thanks, Alan.
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