It's common knowledge that video surveillance cameras have penetrated the commercial market much further than the residential market. After all, just about any store, restaurant, or building lobby that you walk into will have video surveillance but the same can't be said for homes. While this huge discrepancy isn't going to change overnight, the residential video surveillance market is trending upward—and your business could potentially capitalize on it.

The residential video surveillance market is relatively small, yet there is a current demand for remote monitoring of the home. The demographic of today's customers wanting more control of their systems also will contribute to growth in residential video surveillance.

As is the case with most electronic innovations, it will take costs to come down on quality product before mass appeal will take hold. However, since you do not want your customers installing off-the shelf-systems and you especially don't want them getting taken by an unprofessional trunk slammer, residential video is yet another area you have to be knowledgeable in.

The residential Video Surveillance market

According to Parks Associates research, between 2% and 4% of U.S. housing units have video surveillance either via a PC camera or via professionally installed security system. Parks Associates also reports that professionally installed video surveillance cameras that are monitored by a central station are expensive and accordingly in few homes.

Sean Hamm, CEO of Five Alarm Security in San Diego , knows that residential video surveillance tends to be a higher end installation. “We've never done a residential video installation in a house that's smaller than 3,000 square feet. Most of it tends to be 5,000 or 10,000 square foot houses where people are away from their houses for protracted periods of time either because it's a second house—we've done some second houses—or where they have liability issues,” he explains.

“We've had a couple of high profile clients whose houses have been on television. They are concerned that having been on television people might be more interested, wanting to come by and get a little closer than they ought to,” he continues, “and for liability purposes they want to make sure that they're documenting that.”

Hamm has seen firsthand how price can often be the biggest barrier preventing a person from putting their home under video surveillance. He says that he gets a lot of calls from people who are interested in a camera system after seeing what's for sale at Wal-Mart or Costco. However, after he explains to them that it will cost a few thousand dollars to install a decent system, many decide that it's too much.

As for all the customers who do go for home video surveillance, Hamm says, “The one constant is that they're gone for periods of time and they want to be able to check in from anywhere on their house.”

A Hindrance or a Help?

So what about all of those cheap camera systems that people can buy in the store and set up themselves? Are they hurting the business of dealers who install professional CCTV systems for a few thousand dollars?

Hamm says they're a “double-edged sword.” While they do hurt his business, he also has had cases where he gets a customer because they've discovered—as a result of going to litigation—that their current DVR had erased six months of video surveillance and thus won't help them in a court of law. In such cases, he's been asked to come in, rip out the cheap stuff and do a professional install. Furthermore, Hamm says that Five Alarm Security will never install a cheap system—even when asked to.
As a Honeywell FirstAlert dealer, Hamm primarily uses Honeywell cameras and DVRs. Most of his home CCTV installs involve four cameras, but he has had some go up to six. The areas that customers tend to want monitored are their gate, driveway, pool or patio, and the front door, he says.

Approaching from another Angle

High tech home monitoring kits are undoubtedly on the rise and will compete with high-end CCTV installs for the dollars that people are willing to spend to know what's going on at their home when they're not there. Rather than putting the emphasis on capturing and recording high quality video over long periods of time, these home monitoring kits give users the tools to monitor temperature, carbon monoxide, the presence of water (i.e., a burst pipe), elderly who may need assistance, and more. iControl Network's products fall under this category, with their starter kit costing $400 and $15/month monitoring.

Reza Raji, president and CEO, iControl Networks, says that traditional security systems have about 20% of the residential market. However, he explains that iControl is focusing on the other 80%.

“There's nothing wrong with going after that 20% of the market that already has traditional security systems, but we think there's even a much bigger market for people who want that peace of mind but want it to be more of a content play” Raji suggests.

iControl Networks sells its products three ways, says Raji. One is to provide their service and platform to service providers, like telcos, ISP's and cable companies, for them to brand the product and offer it as another value-added service to their customers. The second way is that iControl is selling it directly to end users online. The third way is through a reseller program which Raji says will be finalized by the time of this printing.

“The idea behind the reseller program is for security dealers and home installers and integrators to be able to have another tool in their tool box for them to retain and acquire customers but more importantly to have a branded portal,” he says. “This is really key here. It's for the security dealer to actually have a branded portal that they can offer these services to their customers. It's a way for them to continue a relationship with that customer instead of just selling them a security contract and leaving.”

Raji has found three verticals in particular have “percolated to the top” of the residential video surveillance market. One is the family, he says. People want to know when and if their kids come home from school, what the babysitter is doing, etc. The second is elder care because many baby boomers want to know if their parents are doing okay—and delay a move to assisted living in a nursing home. Third on Raji's list is second homes—people want to know what's going on when they are away.

Interestingly enough, Raji adds that one of the things iControl Networks has learned from 2 years of beta testing is that users find still images “more compelling” than the video (even though his system offers both). While this finding surprised Raji, he now explains that a still image can be tied to an event, such as a door opening, and people usually aren't interested in watching lots of video every day.

Looking to the Future

When planning a business, so much simply comes down to what people are willing to pay for. Given today's technology and prices, very few homeowners are willing to shell out thousands of dollars for a top-notch video surveillance system.

However, Hamm envisions the residential video surveillance market growing as prices come down. He also would like to see a lot of the IT issues become more seamless. (A few months ago he spent 12 hours of his own time troubleshooting a customer's PC.) “I think we've got a little ways to go on the residential video surveillance market to make things really plug and play, so that you can literally plug your router into your network appliance and then it's just live,” explains Hamm , “instead of having to go through and r e-setting your Internet Explorer security settings and stuff like that.”

All things considered, the future of home monitoring, including video surveillance, is a bright one. Raji concludes, “People want real-time information about what they love the most and spend the most money on—which is their family and their homes.”