Video Surveillance Reality Check: Part 2

[Editor's Note: asked four industry notables to blow away the hype, roll up their sleeves, get their hands dirty and not pull any punches when it comes to where they see the video surveillance industry today. The result was honest, open takes on our business. Their columns will be appearing consecutively on Part 1 featured Bosch's Dr. Bob Banerjee. Part 2 begins below and features the words of Ari Erenthal, who handles video surveillance systems sales for products distributor B&H Photo Video in New York. As a little background, Ari has seen 40 percent of his sales move into the IP video space. In subsequent parts, each written by a different guest columnist, we'll link all these stories together and promote the heck out of them on the site (all will appear on the "columns and features" segment of our Video Surveillance section; click the "products" navigation drop down and choose "video surveillance"). We hope we stir up some feelings. The comments area is open, so share your perspectives, too!]

For those of us in the surveillance industry who have survived the financiapocalypse, 2009 is ending on a note of hope. Yes, we've all had a hard year, the hardest since the early '90s. I, however, remain optimistic. I predict that several of the trends that have emerged this year will cause the industry to not only carry on but to grow. In the future, we'll all remember 2008 and 2009 as the years that changed everything.

The most visible trend, of course, is the increasing professionalism of the industry. The most obvious manifestation of that professionalism is the adoption of standards. Instead of the hodgepodge of proprietary standards and closed systems we've been saddled with since the earliest days of the DVR, we can foresee a future where customers can buy an IP device knowing that it will work with all the cameras they already have and all the cameras they will buy in the future.

It doesn't matter which standard wins, or even if neither does. Microsoft and Apple are two de facto 'standards', and users initially have to choose either Apple or Microsoft for their computer systems. Once they commit, they can go out and buy whatever software they want from whichever vendor they please, without having to even consider compatibility beyond looking for a logo on the box. Several people who attended either the PSIA or ONVIF events at this year's ASIS described just how different things are with standards. One well known industry blogger described how a company called Synectics walked in with an NVR which worked with all the cameras present. This was noteworthy because the blogger had never heard of Synectics. Neither had anyone else attending the event. As the blogger put it, "(t)hat's right, a random company downloaded the spec, implemented it, and then just showed up and made things work. Pretty cool."

In 10 years from now, I will be training some industry newbie, and I'll retell this story -- and I love telling the rookies good war stories -- and the newbie will be completely unable to wrap his or her mind around the concept that this was somehow novel in 2009.

"What kind of industry," the newbie will ask, "would allow the horrible waste of time and resources that comes with each company using their own proprietary standards? That would be as stupid as Ford cars only using Ford tires and Ford gas and only driving on Ford highways."

And I will have to laugh and agree and then tell the newbie that when I started, we were still convincing customers that DVRs were better than VCRs.

The next major trend, and one that is even more significant in growing market share, is falling equipment cost. Partly in response to falling component costs -- a 500GB hard drive costs about $50 nowadays, at retail prices -- and partly in response to manufacturers trying to woo skittish customers with slashed security and capital improvement budgets, manufacturers were forced to cut margins. The big companies were cost conscious, but the guys in the middle of the pack were very sensitive in their pricing. And some of us learned that it is better to make $5/unit and sell 1,000 units than make $50/unit and sell 50 units. Without naming names, some of the brands we carried priced their units extremely aggressively and the market definitely responded.

Why is this trend significant? Simple. The cheaper CCTV gets, the more ubiquitous it will be.

We're already approaching 100 percent penetration in small retail applications. To open a candy store, newsstand, or gas station and not install CCTV is nearly unthinkable now, especially in high-crime areas. But as CCTV gets cheaper, more flexible, and easier to use, more and more market segments will open up. Already, a large chunk of my business comes from non-traditional uses. An IP camera is just a way of broadcasting video over a network, after all. The camera itself doesn't care what you use the video for. And so I've had inquiries from churches seeking to broadcast services, museums wanting to showcase their artifacts on display, and even artists doing visual arts installations.

All of these present new markets. That not only affects the manufacturers but also the integrators, who may increasingly become more than system mechanics. They will become concept consultants who explain how inexpensive, small cameras can solve problems in applications which we may as well just mark as being in the category known as "other".

What customers really want in CCTV

I know there is a lot of marketing hype out there, but based on my personal experience, here is what your customers really care about:

First and most important is image quality. Customers don't really know "lines of resolution", or "megapixel", or any of the other hair-splitting buzzwords. They want the picture to look pretty; that's all.

This is frustrating for salespeople just getting into the industry because it goes to the basics of video. No amount of talking will make a customer satisfied with a red that looks orange. Customers do not care what your lux rating is but they care very deeply if the image is so noisy it looks like there's a snowstorm inside the warehouse. And that goes back to the salespersons' knowledge of lenses, light, compression, frame rates, and other fundamentals.

Customers will not pay for buzzwords, but they will pay extra for benefits. Saying "H.264" won't impress anyone, but saying "you can squeeze more video onto the same amount of hard drive space without sacrificing image quality" is worth an extra hundred bucks.

Megapixel is intriguing to the customer, especially since the customer thinks that when shopping for a point-and-shoot digital camera, more megapixels equates to a better camera. Some may understand the megapixel concept, but "digital PTZ" and "forensic video" using "rectilinear lenses" are all hefty concepts that have to be introduced and explained. And if you don't explain those, the customer may just decide that VGA is good enough.

Everyone who is looking for analytics, video management and storage management is chasing a chimera. None of my customers care about analytics or PSIM but they all care very deeply that the system can identify unknown subjects in a court of law. Buzzwords serve a noble purpose, which is to pad sales literature with lots and lots of numbers and acronyms, but at the end of the day, all the customer wants is a good, usable image.

About the author: Ari Erenthal works at electronics retailer/distributor B&H Photo Video in New York where he handles video surveillance sales for large and small customers. He is a blogger (see his blog) and a very active Twitter user (ari_erenthal) and has been a long-time member of the SIW Tech Corner discussion forums.

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