Rev Up - Remote Video RMR
November 1, 2007
Since Sept. 11, 2001, a host of industries previously thought fairly benign by a complacent society have become terrorism targets.
Fertilizer and chemical plants, airports and even biotechnology laboratories contain products that can be misused by terrorists as weapons. Add to this possible threats from protest groups and activists, disgruntled employees and disturbed teenagers, and the need for verifiable security is growing.
Strained police and fire resources and budgets also are putting pressure on the need for verification. Security dealers and systems integrators practically have their marketing work done for them by society itself.
The two most persuasive arguments for remote video monitoring by central stations cited by dealer/integrators and central station operators interviewed for this article are the need for visual verification to prevent false alarms â€” which is mandated in some municipalities â€” and the ability to pinpoint the exact location of a security breach.
Besides those two sales arguments, Tony Wilson, president of Criticom Monitoring Services (CMS), Longwood, Fla., sees additional ones.
“We can save the customer money by reducing their live guards and going to remote video guard tours,” Wilson points out. “There’s a whole laundry list of other services that are available. We can save them money helping them manage their business.
“We had somebody who wanted us to watch barges on the Ohio River at night,” Wilson recalls. “They don’t want to pay a guard full-time to watch what the asset may be.
“Another one that comes to mind is a fast-food retailer that wanted us to install a camera over the counter and watch the cash transactions,” Wilson remembers. “What I’ve learned about convenience stores and fast food â€” I’ve never been in the retail world â€” they always have at 20 percent of their stores some kind of management issue, such as internal theft. They always have stores that are problems.”
Remote video monitoring also is used by retailing customers of SDA Security, San Diego, to verify traffic in stores, such as at the end caps of aisles, where the space is sold at a higher rate.
Security salespeople who can discover innovative services to offer customers that solve their problems will be the ones whose sales and RMR will grow.
HOW BIG A MARKET IS IT?Gerald Vento, chairman and CEO of video monitoring specialist Westec InterActive Inc., West Des Moines, Iowa, reports his company has grown at more than 30 percent a year since 2005.
“We really do believe that IP network video monitoring is going to grow at more than 30 percent annually, and could grow 50 percent in the near term,” Vento predicts. “The residential market is growing at 7 to 8 percent. From what we see, it’s probably going to constitute 50 percent of the video surveillance market going forward.
“Just the video monitoring tours, escorts, and everything that is comprised in that, this year alone is up 22 percent from last year,” Vento maintains.
Sonitrol Corp., Berwyn, Pa., which offers video in addition to its original audio monitoring service, is similarly optimistic.
“Video sales make up approximately 25 percent of our product placement mix,” estimates Gregg Groenemann, Sonitrol’s vice president of marketing. “As a company, we’re growing at about 30 to 40 percent a year, with video growth at upwards of 70 percent. I think in general the industry has adopted video, but monitored video is really the next evolution of CCTV.”
The privately-held company founded approximately 50 years ago by a police officer is most recognized for its audio monitoring capability used to detect break-ins and other emergencies. But video is rapidly becoming a major component of its business.
“Much of our indoor video installations are intended to complement our verified audio alarms,” Groenemann notes. “…Listening to suspects’ conversations gives us a clear indication of their intent to commit a crime. The majority of our video monitoring is done outdoors, because that is where video verification becomes critical.”
Other security dealers, systems integrators and central stations are reporting more modest gains in remote video monitoring.
“It’s a small but growing percentage,” concedes Shandon Harbour, SDA Security’s president, about remote video monitoring. “If we have 6,000 accounts online and most are burglary, fire, that sort of thing, we still only have about 50 remote video accounts.”
Brett Springall, central station IT director for Security Central, Statesville, N.C., reports that video verification has been moderately successful.
“Video verification for dealers who request it over the last five, six years has grown slowly,” Springall concedes. “There has been no major marketing push on it. Our platform here hasn’t been ready to do a lot of video.”
He estimates that of the company’s 240,000 accounts, approximately 50 use video. “We’re on the cusp of being able to offer it mainstream as a service,” Springall declares, adding, “240,000 is a large market potential.”
Matrix Security Group Inc., Turnersville, N.J., has been offering remote video monitoring for approximately three years. “We have 50,000 monitored accounts, and out of that, I’d say we may have 100 video-monitored accounts,” estimates Jerry Harmon, regional manager.
WHICH MARKETS ARE USING VIDEO?SDA Security’s customers in the biotechnology industry use remote video monitoring for guard tours to provide security from animal rights activists and other such groups.
Fertilizer warehouses are another source of remote video monitoring sales opportunities because of their need for perimeter protection and guard tours, points out Paul Chandegra, an account representative (sales) for SDA.
SDA also uses remote video monitoring to protect auto dealerships, public utilities, water reservoirs, gravel companies, school district technical centers, a copper tube company, heavy equipment, high-value electronics items and specific paintings in museums.
“What we’re finding more anecdotally from my conversations with the sales reps is more interest in remote video monitoring for false alarm reasons than previously thought because of non-response issues, and the feeling the police will respond faster if they have more information, such as if they know a window is broken or the person is onsite,” Harbour notes.
Matrix’s primary remote video monitoring customers have been retail establishments, Harmon notes. “We’ve tried targeting hospitals, medical centers and property management groups recently, and we’re hoping that is going to pan out,” he reveals.
“Another group that we’ve started targeting is actual law enforcement themselves,” Harmon reports. “Some of the police departments have a lot of remote stations. In some of the low-income housing areas, there may be a unit there that’s like one of the housing units.
“Police are stationed there and patrol the area and have a little mini-base with security and cameras, and they have a dispatcher always there,” Harmon explains.
“Convenience stores, fast-food retail and car dealerships are the three current applications in which we’re starting to see some movement,” reports Wilson, whose previous company, CMS, merged with Criticom International.
Vertical markets in which Sonitrol is installing its remote video monitoring include education, distribution areas such as lumber yards or tire storage areas, health care, restaurants and even non-profit organizations such as the Salvation Army.
“Unfortunately, people steal quite regularly from nonprofit organizations,” Groenemann reveals.
Westec’s traditional market has been quick-service restaurants, jewelry and retail stores, but Vento says the company now is branching out to all industries.
WHATâ€™S THE PRICE?The price of remote video monitoring varies widely and in some cases is still being determined by the market. “Initially, everyone was going out there with crazy RMRs, like $500-$700 monthly, but that’s not realistic because the price of the equipment is coming down,” Harbour points out.
SDA tried a $200 monthly RMR for an 8-channel DVR connection. “The market wasn’t bearing that much, so we’ve come down to where we’re able to sell it,” Harbour concedes.
Tick explains, “We made a huge investment in monitoring software which can do video, so we don’t have to build a video center and train specific, video-oriented dispatchers, and we don’t have to recover the cost of the video center by charging a huge amount of RMR.
“We start at a base of $50 on top of our regular burglary monitoring, which is $35,” Tick notes. The price of additional video services is determined on a case-by-case. “Because we have so few installations, we’re looking to codify that more,” reports Dan Tick, SDA’s central station/technology manager.
SDA charges for guard tours on a per-minute basis. “Those are all very customized solutions,” Harbour cautions. “They don’t fall in that $50 category â€” those can go into four figures in terms of RMR based on those requirements.”
Groenemann comments, “I would say the average industry monitored video market price that I’ve been able to track is about $80 per month, and that’s where we are, too.” That $80 is added onto whatever other monthly monitoring charges a company is paying.
Matrix charges for remote video monitoring by the number of cameras, so the monthly fee varies. But the monthly video charge averages approximately $40, which is added to the regular monitoring fee, Harmon calculates. Those fees are in addition to the cost of any additional equipment installed to provide the video service.
As a central station, Criticom does not set prices for dealers’ customers, but Wilson thinks, “For some of these higher-end services, the end user could be paying several hundred dollars per month based on the amount of times we go in and look and so forth.”
AN EASY SELL?Vento thinks video monitoring has to be easy for salespeople to sell. “It’s got to be simple to buy, easy to use, and they’ve got to be able to go and make this sale as easily as they do burglar and fire,” he emphasizes.
Wilson thinks there will be more remote video monitoring when the price becomes lower. “The challenge we’ve had in the past, when you look at these proactive services, you get these several hundred dollars per month per site,” he comments. “We’ve got to figure out a better way to offer the service at a lower cost.
“In commercial, there’s a huge opportunity for integrators who are already in with those customers, but they need to give the service side of it some thought,” Wilson recommends. “It’s a matter of really understanding your customer’s business and understanding where remote monitoring can benefit them.”
Sidebar: Are Guard Tours Cost-effective?Security Central, Statesville, N.C., does not do guard tours, reports central station IT director Brett Springall.
“We found it very difficult to sell guard tours because it doesn’t seem cost-effective,” Springall complains. “What we pay an operator works out to more than the cost of sending that guard around.”
The fees and equipment along with broadband connections that video guard tours require make it hard for Springall to see how they are cost-effective.
“When we price it up, it doesn’t work out,” he insists. “In addition, the logic behind video guard touring doesn’t seem very advantageous to me. Why would someone want me to look at a corridor every hour, when you can’t tell what happened immediately before you looked at it or 10 minutes before?”
Sidebar: Commercial or Residential?Most companies contacted for this article only do commercial video monitoring. Sonitrol Corp., Berwyn, Pa., is no exception, but the company reports that it will provide residential video monitoring when it is requested for the homes of its commercial clients or police officers who are familiar with the company’s services, reports Gregg Groenemann, Sonitrol’s vice president of marketing.
Tony Wilson, president of Criticom Monitoring Services (CMS), Longwood, Fla., agrees. “Although we’ve had requests to monitor inside of homes, which we shy away from if possible, we’ve had a couple applications monitoring outside the house of some executive-type homes.
“When somebody trips a driveway beam, we watch the traffic going in and out of the house,” Wilson relates. “In a couple of instances, we’ve done tours of these executive homes, but that’s literally a handful of customers.”