Do-it-yourself security systems will cause some shifts in the residential security market as more than two million broadband homes will have a self-monitored system by year's end.
According to research by Parks Associates, 23% of the self-monitored systems are fee-based with an average cost this year of $9 per month while 22% also include home control. By 2024, the average monthly fees will slide down to $8.50 while 34% will have home control add-on services.
Home security systems seemed cutting edge when they were first introduced, but now the market is flooded with options that are available from the likes of ADT, AT&T, Ring, Comcast, and even chain hardware stores.
In order to better cash-in on home security services, Parks said the industry needs to find new drivers for the homes that currently don’t have such services.
"While smart home features may tip the scales toward acquisition, overall market drivers and inhibitors for home security are roughly the same as they have been for many years," said Dina Abdelrazik, senior analyst, Parks Associates, in a statement. "Parks Associates forecasts roughly 30% of US broadband households will have a security system by 2024, so the industry is in need of business models that can tap into the roughly 70% of households without a security system."
Artificial intelligence (AI) holds the promise of spurring innovation in the home security and monitoring sector, which in turn could attract a broader base of customers, according to Parks. Pairing AI with machine learning could lead to a reduction in false alarms, better detection of anomalous activity and performance of video analytics and better video verification and surveillance.
Making the switch to AI and ML-based security and monitoring systems would also cause current users to buy new systems.
"A complete value proposition based on AI benefits would require a full alignment of AI-enabled hardware, system software, and intelligent call center services," Abdelrazik said. "Vertically integrated or partially vertically aligned players are in the strongest position to deliver these benefits because they can optimize the whole system, assure quality control and user experience, and monetize each component."
Now that roughly 86% of the U.S. households have fixed broadband access, there's a large opportunity for subscribers to buy technology products from service providers, according to Parks.
In addition to professional installs, service providers also have the advantage of being the broadband providers into households that are considering home security or monitoring systems, which means those customers could get those services on their existing cable or telco bills.
Among the 27% of broadband households with security, 23% or 24 million said they have professional monitoring. By contrast, the majority of self-monitored security systems (75%) are self-installed.