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Comcast Enters the Home Alarm Market, but Can They Deliver?

Comcast Enters the Home Alarm Market, but Can They Deliver?

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By: Peter M. Rogers

September 7, 2011

Comcast Enters the Home Alarm Market, but Can They Deliver?

I’ve written before about major telco and cable providers who are testing the waters in home alarms, which does seem like a natural extension of the services they are already offering. However, other companies have tried before, and the results have generally not been pretty. In my last post I talked about Comcast, Verizon and even Canadian provider Rogers (no relation!). Today we’ll focus specifically on Comcast, since they are now making a major push into residential security. A recent article on the Comcast alarm platform provides plenty of detail.

Sound the alarm: cable is breaking and entering into the sleepy home-security market, and it has some pretty cool new tools up its sleeve. Among major broadband providers, Comcast is out in front in trying to tap into what analysts estimate is a $8 billion category. After offering home-security service in Houston for about a year, the nation's biggest MSO last week said it is expanding Xfinity Home Security into six additional U.S. market areas.

Why Comcast (and Others) Are Adding Home Alarms

To those of us watching the alarm industry, it’s pretty clear why Comcast is making this move. They have unusually high cancellation rates in their “core” services (such as cable entertainment), which are very profitable. They know that the average alarm customer stays around longer than the average cable customer: by offering a “bundled” service that includes home security, they hope to increase customer retention, especially on the profitable services. It even makes sense to lose money on the alarm equipment and barely break even on the alarm services, if it means they make more over time on the other services – because remember, you can’t buy just the alarm portion. That’s the “gotcha” in the equation. Here’s the spin:

"We think it's a natural integration with our other products," Comcast Cable senior vice president and general manager of new businesses Mitch Bowling said. "The reason we're doing this now is, the technology capabilities have just recently become something that isn't a custom install."

Another factor compelling broadband operators to offer home-security services is that they're looking for new revenue streams as the growth of the high-speed Internet and telephony legs of the triple-play slows, Bill Ablondi of Parks Associates noted: "They're asking, what else can I provide in the home on top of the broadband connection? For folks like Comcast and Time Warner Cable, this is the last billion-dollar market left."

ADT Weighs In

ADT - which has 15,700 employees serving more than 6.3 million home and small-business customers - is responding to the incursion on its home turf by the likes of Comcast, Time Warner Cable and others. "We have mammoth monitoring capabilities versus the competition," ADT director of public relations Bob Tucker said. The firm has been in the security space for more than 135 years and claims to have 95% brand awareness.

Would You Trust a Cable Company to Protect Your Home?

"We believe based on our own research, and based on consumer feedback, that we are the right company to provide service, said Comcast’s Bowling." Cable does suffer from lower-than-average customer satisfaction, but the industry is in no worse shape than others in the competitive environment, according to Parks Associates, who closely follow the alarm industry.

Initial consumer reactions to cable providers (and Comcast in particular) offering alarms are mixed, with one web site affiliated with Consumer Reports fielding many comments that indicated a thumbs down. Here’s the link, and my favorite is this one, a simulated response from the service provider 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."

We’ll keep an eye on the competitive landscape for you, and post the particulars when we see something of interest. We do know that alarm systems have evolved, and that FrontPoint was way ahead of the pack when it comes to interactive monitoring.We’re the leader in wireless home security, and the #1 ranked alarm company in the US – and we earned that spot with technology, pricing, and customer satisfaction that leaves the others far behind. That’s why smart shoppers choose FrontPoint: safer, smarter, simpler, more affordable, and virtually impossible to defeat. Just read the reviews, and you’ll want a FrontPoint system too.

Comments

Alan

September 8, 2011

Very interesting, Peter. I depend on you and your blog to keep abreast of the most important security industry trends. Will be interested to see where this goes. They better provide an affordable wireless option for it to be viable at all. For me personally, if I was searching for a new security company, having to bundle to get a decent deal on the alarm service would be a no go. If they can't provide a good stand-alone service, forget it. It would appear you guys have little to worry about from these guys. These cable companies have dismal customer satisfaction ratings, though Comcast has bumped the needle slightly in the past few years with much internal effort. Still though, they've only gone from mediocre to slightly better... it's no USAA or Nordstrom's to be sure, and probably never will be even remotely close.

Peter M. Rogers

September 14, 2011

Alan - could not agree more on the bundled concept. Unfortunately for Comcast and other companies, the cancellation rates are just too high for them to ignore, especially on the high-profit services (like cable): that's why they have to link the alarm services (which are more reasonably priced) to those other services. But I think for most people the real issue is going to be peace of mind: there just is not a lot of trust out there for some of these companies as service providers for non-critical products, and that makes it hard for many to place their homes and families in the hands of anyone other than a "real" alarm company - like FrontPoint.

Alan

September 8, 2011

Very interesting, Peter. I depend on you and your blog to keep abreast of the most important security industry trends. Will be interested to see where this goes. They better provide an affordable wireless option for it to be viable at all. For me personally, if I was searching for a new security company, having to bundle to get a decent deal on the alarm service would be a no go. If they can't provide a good stand-alone service, forget it. It would appear you guys have little to worry about from these guys. These cable companies have dismal customer satisfaction ratings, though Comcast has bumped the needle slightly in the past few years with much internal effort. Still though, they've only gone from mediocre to slightly better... it's no USAA or Nordstrom's to be sure, and probably never will be even remotely close.

Peter M. Rogers

September 14, 2011

Alan - could not agree more on the bundled concept. Unfortunately for Comcast and other companies, the cancellation rates are just too high for them to ignore, especially on the high-profit services (like cable): that's why they have to link the alarm services (which are more reasonably priced) to those other services. But I think for most people the real issue is going to be peace of mind: there just is not a lot of trust out there for some of these companies as service providers for non-critical products, and that makes it hard for many to place their homes and families in the hands of anyone other than a "real" alarm company - like FrontPoint.

Alan

September 8, 2011

In my opinion, you guys are in the same pack with USAA and Nordy's. I've been a customer since January 2008, and could not be happier with everything, including the technology and customer service!

Peter M. Rogers

September 14, 2011

Thanks, Alan - High praise indeed to be grouped with Nordstrom, a legendary home of great customer service! You are the model FrontPoint customer: tech-savvy, loyal, and always thinking of ways to derive the most peace of mind from your FrontPoint system.

Alan

September 8, 2011

In my opinion, you guys are in the same pack with USAA and Nordy's. I've been a customer since January 2008, and could not be happier with everything, including the technology and customer service!

Peter M. Rogers

September 14, 2011

Thanks, Alan - High praise indeed to be grouped with Nordstrom, a legendary home of great customer service! You are the model FrontPoint customer: tech-savvy, loyal, and always thinking of ways to derive the most peace of mind from your FrontPoint system.

Larry

August 30, 2012

I have had the comcast system for only three weeks and the system has only fully worked 3days. The cameras don't work as the connection to the interface is lost often. A technician came out to the home and the problem was solved for two days and the cameras still are not working. I have been on the phone for three hours trying to get someone who is competent to fix the problem and still not resolved. Redundant competence is how I would explain Comcast home security. Oh by the way if I discontinue my service because it's not working, I have to still pay a early termination fee!!!!!!! DON'T DO COMCAST HOME SECURITY- DON'T DO IT!!!!!!!!

Peter M. Rogers

August 30, 2012

Larry - Thanks so much for the comment here. I have been checking the Comcast forum for general reactions to their security offering, but have not seen much: I think that is partly caused by the fact that Comcast has not had anywhere near as many takers as they expected for the bundled security services. There has been quite a bit written (especially in the security industry press) about the fact that it's much easier for alarm companies to expand into video and home automation services (the way FrontPoint has), as opposed to trying to expand from entertainment and connectivity services to include home security. Cable companies are just not geared to providing prompt and reliable service - though some are certainly better than others - but Comcast in particular is generally considered the poster child for poor service. That's not what people are looking for when protecting their homes and families - they want peace of mind. When you throw in the issue of whether the equipment even works, then it's a losing proposition all together. We are sorry to hear of your frustration - but make sure you let them know. Its interesting to note that the same types of complaints are being registered by Verizon customers who signed up for Verizon's self-monitoring services: things don't work, and the employees are not much help. Can't wait until AT&T jumps in as well - all these companies are learning the hard way that it's really hard to do what FrontPoint does so well. Thanks again for the warning.

Larry

August 30, 2012

I have had the comcast system for only three weeks and the system has only fully worked 3days. The cameras don't work as the connection to the interface is lost often. A technician came out to the home and the problem was solved for two days and the cameras still are not working. I have been on the phone for three hours trying to get someone who is competent to fix the problem and still not resolved. Redundant competence is how I would explain Comcast home security. Oh by the way if I discontinue my service because it's not working, I have to still pay a early termination fee!!!!!!! DON'T DO COMCAST HOME SECURITY- DON'T DO IT!!!!!!!!

Peter M. Rogers

August 30, 2012

Larry - Thanks so much for the comment here. I have been checking the Comcast forum for general reactions to their security offering, but have not seen much: I think that is partly caused by the fact that Comcast has not had anywhere near as many takers as they expected for the bundled security services. There has been quite a bit written (especially in the security industry press) about the fact that it's much easier for alarm companies to expand into video and home automation services (the way FrontPoint has), as opposed to trying to expand from entertainment and connectivity services to include home security. Cable companies are just not geared to providing prompt and reliable service - though some are certainly better than others - but Comcast in particular is generally considered the poster child for poor service. That's not what people are looking for when protecting their homes and families - they want peace of mind. When you throw in the issue of whether the equipment even works, then it's a losing proposition all together. We are sorry to hear of your frustration - but make sure you let them know. Its interesting to note that the same types of complaints are being registered by Verizon customers who signed up for Verizon's self-monitoring services: things don't work, and the employees are not much help. Can't wait until AT&T jumps in as well - all these companies are learning the hard way that it's really hard to do what FrontPoint does so well. Thanks again for the warning.

Al

August 30, 2012

Interesting article Peter. I for one sadly have ADT for now and for 2 more years stuck with them. Although I have strongly considered paying off their much demanded 75% to get out of the contract due to their poor customer service. I'm am truly am very confident that Comcast will do very well in Florida, at least, if not for their more advance security system all together then for their much more elevated customer service focused. I have them for TV and Internet and when I have any issue it get resolves with a smile...a great attribute in a company with millions of customers. Something that ADT will need to greatly improve on to even be considered a competition. ADT's greatest advantage is that they have been a large player in the security alarm industry. The worse part is that they authorize just about any shmoe to sell and install their systems. For us the consumers, competition is a great thing because it pushes all companies to improve in all areas of their industry. Now we have a real choice. and that's a great thing. I have had ADT and from 1 to 10 I would give it a 2 at best!..(and..I'm being very generous) . Thanks for the article.

Peter M. Rogers

August 30, 2012

Al, thanks for weighing in here, and you are most welcome. Sorry to hear that you are so unhappy with ADT that they only rate a 2/10: I wish they would get their act together with good service, since their lackluster reputation is actually not good for the alarm industry at large. One way you can tell how alarm company customers feel is by cancellation rates: ADT reports a cancellation rate of 13.2%, higher than the industry average. That means they lose about one out of every 7.5 customers every year, and have to create over 700,000 new customers a year, just to stay level – no wonder they advertise so much! And you are right about the ADT Authorized Dealer program - there are certainly some interesting characters in that cast. As for Comcast, time will tell. Of all the comments I have received here (or read elsewhere), your positive experience stands out as a notable exception, and I'm genuinely happy to hear that they have done well for you. It is true that Comcast service levels vary from region to region, and even office to office, so it stands to reason that there would be areas where their performance is at least acceptable, if not downright good. The "take" rate on the Comcast alarm services is reportedly well below forecast, which may explain why I have not seen much in terms of customer reaction - positive or negative. But we'll be watching! Thanks again.

Al

August 30, 2012

Interesting article Peter. I for one sadly have ADT for now and for 2 more years stuck with them. Although I have strongly considered paying off their much demanded 75% to get out of the contract due to their poor customer service. I'm am truly am very confident that Comcast will do very well in Florida, at least, if not for their more advance security system all together then for their much more elevated customer service focused. I have them for TV and Internet and when I have any issue it get resolves with a smile...a great attribute in a company with millions of customers. Something that ADT will need to greatly improve on to even be considered a competition. ADT's greatest advantage is that they have been a large player in the security alarm industry. The worse part is that they authorize just about any shmoe to sell and install their systems. For us the consumers, competition is a great thing because it pushes all companies to improve in all areas of their industry. Now we have a real choice. and that's a great thing. I have had ADT and from 1 to 10 I would give it a 2 at best!..(and..I'm being very generous) . Thanks for the article.

Peter M. Rogers

August 30, 2012

Al, thanks for weighing in here, and you are most welcome. Sorry to hear that you are so unhappy with ADT that they only rate a 2/10: I wish they would get their act together with good service, since their lackluster reputation is actually not good for the alarm industry at large. One way you can tell how alarm company customers feel is by cancellation rates: ADT reports a cancellation rate of 13.2%, higher than the industry average. That means they lose about one out of every 7.5 customers every year, and have to create over 700,000 new customers a year, just to stay level – no wonder they advertise so much! And you are right about the ADT Authorized Dealer program - there are certainly some interesting characters in that cast. As for Comcast, time will tell. Of all the comments I have received here (or read elsewhere), your positive experience stands out as a notable exception, and I'm genuinely happy to hear that they have done well for you. It is true that Comcast service levels vary from region to region, and even office to office, so it stands to reason that there would be areas where their performance is at least acceptable, if not downright good. The "take" rate on the Comcast alarm services is reportedly well below forecast, which may explain why I have not seen much in terms of customer reaction - positive or negative. But we'll be watching! Thanks again.

Kevin L.

September 17, 2012

I too am having serious issues with my camerasand motion detectors! Larry couldn't have said it better. My system was installed a month ago and I may have only used the online iPad/ iPhone service for a total of 2 days combined. My cameras are down as I write this post lol. Comcast will be out tommorow morning for the 4th time within this last month. It seems as though it's much of a guessing game on behalf of tech support and the actual installers! Even while the installers are here trying to resolve issue they go through the same exact trouble shooting procedures I did over the phone in the first place which led them to my home all the other times. Even after that they are still baffled! Second issue is if I set my alarm on away... I get a call reporting an alarm in progress every 45 minutes on the hour because for some reason its sensing motion in the home. I dont own any pets not even a mouse. So the problem is if the alarm is going off and my camers are down how could I answer the first question they ask me.. "Is this a false alarm?" I just received my first bill for the home security system.... The sales rep promised that the $300 installation charge would be broken down over a period of 3 months but here it is plain as day on my current bill due in October! Then there is a $49.99 charge listed for the monthly service which I have been totally unable to utilize in its entirety. Totally disappointed in this service and would not recommend it to anyone.

Peter M. Rogers

March 27, 2013

Kevin - Thanks for your comment. We are hearing more and more stories like this regarding not just Comcast, but also the other "new entrants" to the alarm industry. It seems that these cable and telecommunication companies just have not grasped the fact that people want peace of mind - and it's not at all the same thing to sell entertainment services as it is to sell the protection of a home and family. While we are watching the new players in our space with interest - and a little caution - we have not seen them taking any market share away form existing alarm companies. In fact, it may be just the opposite: all those advertising dollars and all that customer education about interactive services may in fact be driving new customers to the established companies who do a good job of selling and supporting these advanced services - companies like FrontPoint. Thanks again.

Kevin L.

September 17, 2012

I too am having serious issues with my camerasand motion detectors! Larry couldn't have said it better. My system was installed a month ago and I may have only used the online iPad/ iPhone service for a total of 2 days combined. My cameras are down as I write this post lol. Comcast will be out tommorow morning for the 4th time within this last month. It seems as though it's much of a guessing game on behalf of tech support and the actual installers! Even while the installers are here trying to resolve issue they go through the same exact trouble shooting procedures I did over the phone in the first place which led them to my home all the other times. Even after that they are still baffled! Second issue is if I set my alarm on away... I get a call reporting an alarm in progress every 45 minutes on the hour because for some reason its sensing motion in the home. I dont own any pets not even a mouse. So the problem is if the alarm is going off and my camers are down how could I answer the first question they ask me.. "Is this a false alarm?" I just received my first bill for the home security system.... The sales rep promised that the $300 installation charge would be broken down over a period of 3 months but here it is plain as day on my current bill due in October! Then there is a $49.99 charge listed for the monthly service which I have been totally unable to utilize in its entirety. Totally disappointed in this service and would not recommend it to anyone.

Peter M. Rogers

March 27, 2013

Kevin - Thanks for your comment. We are hearing more and more stories like this regarding not just Comcast, but also the other "new entrants" to the alarm industry. It seems that these cable and telecommunication companies just have not grasped the fact that people want peace of mind - and it's not at all the same thing to sell entertainment services as it is to sell the protection of a home and family. While we are watching the new players in our space with interest - and a little caution - we have not seen them taking any market share away form existing alarm companies. In fact, it may be just the opposite: all those advertising dollars and all that customer education about interactive services may in fact be driving new customers to the established companies who do a good job of selling and supporting these advanced services - companies like FrontPoint. Thanks again.

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