Roundtable participant Dennis Dop heads marketing at Videofied, which has developed an integrated PIR sensor with video camera; the company approaches video in the home as a way to verify alarm signals.
Fredrik Nilsson is general manager for Axis Communications, a company that has worked with service providers to offer the option of network cameras in the residential setting. He says the market has been stuck in the "early adoption" mode for at least 10
Jonathan Klinger oversees marketing of residential systems for Honeywell Security and Custom Electronics. He believes there will be strong adoption if the market reaches a point where professional quality video systems can be offered to home security user
In 2007, there was more talk than ever about the potential of video surveillance applications for residential security. Companies were showing new solutions for residential camera systems, some of which integrated into residential alarm systems. Some systems were designed around the ability to instantly verify intrusion alarms; others were set up for homeowners to generally "look in" on their properties.
It's hard to tell if a consistent vision for the future of video in the residential market has been created, but we went out to three vendors - a camera vendor, a top alarm systems provider, and a company specialized in alarm verification - to get their input on what the market would hold and what some of the top hurdles would be. One thing is for sure -- there's no silver bullet that's going to create instant market penetration for residential video surveillance; it's going to take time for video cameras to become as essential to home security as an alarm keypad - if it ever becomes that common.
Three vendors participated in the roundtable, and we're pleased to note that they offer diverse backgrounds and viewpoints. Here's who you'll hear from: Jonathan Klinger is director of marketing for residential systems at Honeywell Security and Custom Electronics; Dennis Dop heads marketing at integrated camera/intrusion sensor firm Videofied; Fredrik Nilsson is general manager for network camera manufacturer Axis Communications.
These vendor's responses represent what we at SIW think is some of the best thinking about how to approach video surveillance for home security. Enjoy their diverse opinions as you contemplate how your security business can tap this potential market.
Are we at the "early adopters" stage of this potential technology revolution yet?
Dennis Dop/Videofied: I would say that this is not so much of a technology issue with "early adopters" buying into it, but it is more a question of residential customers seeking greater security and faster police response.
Jonathan Klinger/Honeywell: We're seeing dealers using residential video as an up-sell opportunity for their traditional burglar install or to augment a "smart-house" type of installation. Many of their customers are using video to look into their homes, to track their children's comings and goings, to monitor their vacation or second homes, and to provide a greater sense of awareness of their concerns and security for their property and assets. In addition, we see an increased number of home owners installing a traditional commercial multi-channel DVR solution in the home to record events, particularly if there is concern of vandalism, theft or other property crimes. We're also seeing more requests for a video solution that would allow adult children to look in on their elderly parents, although this market is still emerging as prices fall and installation complexities lessen.
Fredrik Nilsson/Axis Communications: We are in the early adopter stage and we have been in that stage for quite some time. Axis had our first bigger project for home video monitoring back in 1998, with a Belgian telecommunications company focusing on home surveillance over the Internet. Since then we have seen a lot of activity in this field, both in terms of vendors with systems and products, as well as a number of roll-outs, some more successful than others. In Mexico, TelMex has been successfully running a service for more than two years with thousands of cameras installed, but the market has definitely not moved into mass market yet.
Privacy seems to be the main objection, especially with managed and monitored systems, where theoretically a monitoring professional could look in on your home without anyone knowing. How do you get beyond the privacy issues? Do you think the majority of the public is ready to overcome those privacy objections?
Nilsson: I agree; privacy is an issue. Do you really want to have a camera in your home when you know an unknown person is monitoring it? There are a few ways around it, for example to have the camera only viewable when there is an alarm, or making sure that only the user can monitor the live and recorded video.
Dop: Privacy is a huge issue and unless it is addressed adequately, I believe that video will never move into the private, residential living space. Videofied deals with this issue by separating surveillance and security. There is no "look-in" or nanny-cam option with our video security system. The camera is activated by the motion sensor, and the motion sensor is only on when the system is armed. Thus, our cameras are only on during an alarm. This is much different than a system based upon IP cameras. IP cameras are always filming and wireless IP cameras are always filming and broadcasting - a difficult sell for privacy. We think the "guaranteed privacy" approach is the absolute best way to deal with this.
Klinger: We need to confront the issue of customer concerns regarding strangers gaining access to their secure video solutions. We don't do ourselves any favor by having some dealers encouraging end-users to use DIY video solutions that don't have the type of security, authentication and encryption that more established security product manufacturers can provide. We can move beyond these issues by really educating consumers about the security features that are available on high quality video solutions manufactured by Honeywell and others. In other cases, installers need to become more educated on how to deploy safer and more secure solutions. Recent advances in technology now make it possible to deploy very secure systems that will thwart even to most arduous hackers. In addition, the whole industry needs to be able to talk intelligently to customers about the protections -- from both a policy perspective and a technology perspective -- that exist to prevent a rogue employee from being able gain unauthorized access to their secure video solution.
Price is probably going to be the second objection, since there is a perception that video surveillance is very expensive. Is there a price point where this technology could be quickly adopted by the middle class, not just the wealthy? As an industry are we yet at that price point or are we even close?
Klinger: Obviously a difficult question, as there are so many choices and options that effect price... We believe that a "typical" system that costs under $2,000 professionally installed with at least two cameras, which provides local or remote event archiving and logging and is viewable from outside the home, can be a successful residential solution for large groups of end-users. However, we should acknowledge that price can vary widely depending on quality, features, number of cameras, etc.
Dop: We also believe that a video security system complete and installed for less than $2,000 is viable right now, especially in markets with slow police response. There is, however, a much larger market once the price drops below $1,000.
Nilsson: Network camera today cost as little as $100, but the biggest cost normally is the monitoring service which can cost from $10 to $25 per month. I think the price is less of an objection at this point, I have seen some services where a camera is given for free if the user signs up for a two-year monitoring contract of $10 per month, and I believe that is the right price point to address the mass market.
What do you feel is the best model for revenue on this residential video technology? Do you see a recurring monthly revenue model in the works?
Nilsson: Some kind of monthly monitoring fee is what customer have become used to with alarm monitoring, and I think we will see the same model with video monitoring.
Klinger: Professional security installers can use residential video to increase their monthly monitoring fees and really provide a service that will help reduce attrition. We find that end users who have a video solution installed typically are very satisfied with the convenience and comfort that it provides. Very few of those customers that ultimately have these systems installed would ever choose to live in a home without the feature.
Dop: We see that video security monitoring is selling for around $10/month in incremental RMR. Because there are no DVRs or special operator training, this type of video security requires very little extra effort or cost at the central station and can be a real money-maker. The alarm comes in with the 10 second video of what caused it - that simple.
In your opinion, how much of a factor will alarm verification play into adoption of residential video surveillance? Wouldn't that effectively require a camera near every sensor?
Dop: Depending upon the legislative pressures it may very well require a camera per sensor. This is obviously the ideal solution. In fact, that is what we provide at Videofied. A camera is integrated into every motion sensor; every motion sensor is verified by video.
Nilsson: It would require a camera near every sensor. Alarm verification has been discussed for a long time, and if it happens it will drive home monitoring.
Klinger: Although we're examining the role of residential video in alarm verification, we typically don't see many dealers adopting widespread video surveillance as a solution - because of technology limitations and privacy concerns. We're looking at next generation video solutions that would lower costs for installing more cameras in the home and would expect future generations of alarm consumers to have less qualms about privacy concerns.
Is there a point where we hit information overload on the consumer -- where they have too many technologies vying for their time?
Nilsson: Typically when someone installs a video monitoring service they will look at the video a few times a day. After a while it is down to only a few times a month. In a smart system with sensors and intelligent video, no one would really be required to monitor the video. Technology will always get more and more advanced, providing us with more options but it also aims at simplifying our lives. We all have more information that we can deal with at our fingertips; the challenge is to get the right information at the right time, and intelligent video can help accomplish that,
Klinger: A lot of times, we bombard customers with buying options at a time when they're least able to make a decision - for example, when they're buying a house, when they're moving, when they've suffered a break-in. We see different technologies being important to consumers at different points in their lives. As an industry, we should determine those life events that cause consumers to consider buying an alarm system or installing a residential video solution and support and inform them during that period.
That being said, the buying profile is gradually evolving to the segment commonly referred to as "Generation Xers." These individuals have grown up with technology, and typically use it as an important component to their everyday lifestyle. Generally classified as "first-time home buyers", this group will demand more technology in their homes, and are most likely to forgo granite countertops and solid wooden cabinets in favor of high-tech gadgets to enhance and their lifestyle and provide new types of information at their fingertips.
What were once considered "options" or "upgrades" are beginning to evolve into standard offerings builders use to differentiate their communities to the targeted audience. Technology has become more affordable, and user-friendly. We are truly on the cusp of the residential technology revolution.
Dop: I think that this "information overload" issue is more problematic with complex solutions integrating multiple products and multiple vendors. It really is not an issue with a single device that sends video of what caused the alarm. It is simple to explain and simple to demonstrate.