A couple weeks ago, you may have read a press release we posted about a new program from ADT called "Custom Gold Home Service" that was designed to offer custom security and automation services to high-end homeowners - the kind of homeowner with the home that might have a great deal of value in its furnishing, be owned by persons of notable interest, or which may be established in an estate setting, or perhaps be a second home for the wealthy. According to Tim McKinney, the director of custom home services for ADT in North America, ADT looked at this type of homeowner and recognized that these homeowners often need a different level of security, remote access and automation than the rest of us.
SecurityInfoWatch.com caught up with McKinney during the recent Consumer Electronics Show to speak about the wave of change hitting the high-end residential market and how it's shaping the future for a top security provider. Video, of course, is at the core of the system, augmenting traditional intrusion detection systems, but also offering the ability to cast a watchful eye on standard house management issues. As McKinney notes in his interview below, you can use video for security but you can also use it to find out if packages have arrived on the doorstep. The Gold Service is currently being rolled out nationally via ADT directly, and here's what McKinney had to say about the new "Gold" program and the security industry's move toward residential automation:
SIW: In his keynote at the Consumer Electronics Show (CES), Microsoft's Bill Gates spoke about his vision for the wired home. What have you been watching that space?
Tim McKinney: I think all the buzz that's coming out this morning at CES about what's taking place out there with internet video and being able to watch TV on your cell phone, that's really cool. It's really one of the coolest things that's happening right now in residential. As you know we've got 6 million customers and are the oldest and largest security company, so we have to stay out there on the cutting edge, continually bringing new technology into the home. It's important for us to be that premier provider.
In terms of the technology, it provides ADT an opportunity to ride the digital revolution that's happening in the home. With all of the convergence that's happening now in terms of the ability to bring data into and out of the home with a broadband connection - whether it's a cable connection or DSL - it allows us new opportunities.
If you look at video as an example, it allows us to remotely transfer that video to wherever the customer may be. We have a new product in that area which we refer to as Safewatch VideoView, and it simply allows that customer with an IP addressable camera system to bring that video to the person or anywhere they might have access to a website. So they pick up video from their beach house or their mountain home.
Do you see video as being the dominant driving factor of this part of the market?
I see video as addressing a major application that has found its way in multiple different scenarios. From a security and safety standpoint, I think video addresses the needs of the customer very well. It could be the pool in the backyard; it could be the notification that someone is coming up the long driveway and they can see exactly who it is. It could be that the FedEx driver is dropping off some packages and you want to make sure they are in a spot where they're not going to be damaged by the weather. So there are multiple applications for the VideoView product that we see in this high-end residential market.
Is network video part of the plan?
I think down the road it's possible. Right now we're at the point where we have to ask what is it that customer is looking for. It could be a traditional alarm scenario where we're then able to bring frames of video back to the monitoring center as a reference to know is it a good guy or a bad guy scenario. Those are the things that are happening today.
Would this program be rolled out by ADT's existing network of dealers, or is it a special segment within that group?
Initially the VideoView component of this is being launched what we refer to as the direct channel. When you look at the residential component, that's over 2,500 dedicated residential sales people, and over 4,000 dedicated residential installers. So it will start there, but certainly a product like VideoView will eventually be offered through the dealer channel as well.
The Gold program mentions home automation. How does that fit in?
Right now we've looked at our strengths and core competencies, and when you look at security and you look at safety, there are a lot of other systems and subsystems that are happening in the home. Lighting is one of the key subsystems. So, as we speak, we're talking to national providers of lighting systems that can help us bring that solution and particular product line to our team that's out on the street every day, who can then bring lighting solutions to the consumer. We're talking to other providers who have some very interesting home automation products and technology, and they look at our distribution capabilities and our sales teams and it's very attractive. I can't disclose names at this point, but the ADT model that is focused on safety and security, and other technology providers - whether in the cable space or the telephone space or even retailers - create some interesting scenarios for bringing those together.
ADT provides the monitoring to the home, and it stands to reason that automated home systems could benefit from having monitoring. Is one of the models that ADT would be the monitoring for these systems and would be interface for remote access?
One ADT advantage is that we operate state-of-the-art customer monitoring centers - five in the U.S. and two in Canada - that are fully redundant with each other. As example, there was the big snowstorm in Denver over the past two weeks, we were able to move the signals from that facility to other facilities in a seamless fashion. The ability for us to monitor anything in the home, whether that's diagnostically, or bring that remote video.
Certainly the capabilities of bring voice, video or data is something we can do easily. And again, it's a very attractive entr,e for other providers to know that we have that capability.
In servicing the high-end residential market, security and safety has been a bit of a given. But home automation has faced a bit of a challenge in that you've got a low-voltage segment and a high-voltage segment and there's not always cross-over in terms of the ability to install both. What are your thoughts on how our industry can get beyond that so home automation can really happen?
That's a great question. What's interesting is if you take a look at the Geek Squad from Best Buy, or Firedog.com, now all the consumer electronics retailers are bringing installation expertise to the home, to be able to simplify the convergence of what's happening to the home. And I think that even the lighting manufacturers, Lutron and some of the others, are bringing wireless line-carrier type solutions that require minimal 110-volt AC work, and thus make it easier. I think that there will be a convergence in the home of all these disparate keypads and controls. The proliferation of flat-screens and LCDs and plasma might become the hub or central point where one can easily control all these subsystems. It's fascinating to watch that, but I think the high-voltage and the low-voltage systems are coming together in the home much quicker now.
Is it being aided by standards for communications between these control devices?
From what we're watching over the hill, more of the major players are beginning to partner up and bring together the power of the various brands to accomplish that. To your point, yes, the protocols and the standards are coming together a little bit tighter.
Can you share a potential vision for what the Gold program could do for a homeowner?
There was a great point I heard recently that formerly when you made a telephone call you were calling a location, and now you're calling a person. I think everything is moving that way. For 100-plus years, ADT protected properties. Now we've taken the security umbrella from the property to the person and to their vehicle. It's a complete umbrella versus just providing protection for the home. The broadband connections and the easier transmission of voice, video and data along that path, and the key thing we've seen is to keep it very simple and not try to overcomplicate things. As to the point we made earlier, the buzzword of "home automation" has been around for years, but no one has fully been able to drive that home in a mass market. We see the technology, pricing and service all coming together now to make it very affordable for the affluent market.
A typical scenario would be that I could bring up my security console on my PDA, Blackberry or TV with the same look as if I was standing at the keypad in the kitchen. I can bring up that same keypad and arm or disarm, check appliances, remotely take a look at the beach house, and be able to fully operate all of my sub-systems from an easily controlled web portal. I think that's really where we're looking. I don't think that's so much an idea for the future, as I think it's here today and we're working through that as we speak. Just as we see that convergence happening on the commercial side, we also think it's happening very quickly on the residential side.
When you look at the Custom Group in particular, we're very proud of this because we're taking all the expertise we've acquired over years in the commercial space and are going to be able to continue to brand across the residential channel. We feel like we're the only current national provider that's able to offer this with a dedicated team, dedicated sales people, dedicated installers, dedicated monitoring centers, to offer a very high-level concierge type service to that end-user. As an example, we provide one phone number that is answered live 24/7 for whatever questions that customer may have related to the security side of the equation, so we really try to customize it for them.
How do you set up the pricing?
In the custom space on the installation we have a la carte pricing and it's contingent upon the size of the application. But back on the monitoring side, we do have some preconfigured service offerings that cover things like the VideoView, flood monitoring, critical conditions monitoring (low/high temp situations) as well as intrusion, fire and carbon monoxide. People are seeing that it could be in the range of $40 to $45 per month, and then many of them may pick up the extended service. So within $50 to $60 per month range - a very comfortable monthly range for these affluent homeowners - they get full service. That range could include the VideoView; it depends on how they choose the elements.
I understand you have a facility in Kansas City. Is this going to be dedicated to the Home Gold service?
It is. The key factor for us, of course, is redundancy. We can move signals out of Kansas City if we need to, but we use a dedicated group in Kansas City for the Gold monitoring platform, so we have to apply market science up front to identify who is custom and who is a custom prospect. And then we identify them from the inception and we move them through a very unique process flow, where we service and monitor them from Kansas City using our Gold preferred monitoring team. It's kind of like a frequent flyer or the Marriot Gold program. Those consumers who are familiar with the operating systems and who have higher needs complexity, those are the folks that we bring into the Gold service.