New players are entering the security industry in a mass market fashion, with a solution that provides more than just a traditional home security system. Is that wrong?
Many of our readers will remember when Brink’s Home Security, in the mid-1980s, created and began marketing the concept of an affordable home security system. Priced to produce a loss on the installation, but a profit on the long-term monitoring contract, it was a new concept in the industry and other security dealers soon began to imitate the business model on a local, regional or even national basis. The outcry from around the industry, however, was “unfair”! Many dealers that sold traditionally priced security systems pointed out that it devalued their services and would put them out of business.
In fact, the opposite occurred. The millions of dollars spent on marketing and advertising low-cost home security systems only served to raise the water level for the industry as a whole, as it showed consumers that a wide range of options and prices existed to suit their needs. When Brink’s opened that door, others walked through it in the years that followed, including telecom giants and non-traditional entities such as energy utilities. Some succeeded; others did not.
Now there is a new wave of home and small business security competitors — cable giants such as Verizon and Comcast — with a new twist that incorporates security in a broader package of home control and monitoring, in some cases self-installed and self-monitored. In our coverage of this issue, which begins on page 70, contributing writer Maggie McFadden Shein quotes Greg Roberts of iControl Networks, the company that provides the backbone for some of the offerings, as saying, “Each individual company wanted to enter the security industry in a mass market fashion with a solution that provides more than just a traditional home security system.”
And again, some are crying foul while others believe it is fair competition given the fact that there is plenty of available market share to be had in residential security.
“Competition is competition,” voiced George De Marco, chairman of ESX, in the article. “The industry needs to take note of new players, assessing their strengths and weaknesses, just like they are doing to you. Traditional alarm companies need to reassess their business models and operational expertise, allowing them to compete at a higher level, no matter who the competition is, today or tomorrow.”
De Marco is correct. Home security is trending towards an integrated system that encompasses home control, energy management, and video surveillance. Simply put, if your company is not up to the task of responding to today’s consumer desires, then competition will take its natural course.
EDITOR’s NOTE: We look forward to seeing those of you attending ISC West in Las Vegas later this month. Please consider adding SDM as a stop on your agenda. We’ll be in booth 7147. A special ISC West preview may be found on page 30 of this