Smart Video Now Anchors Smart Home Technology

Smart video products are undergoing a major transformation, as artificial intelligence, interoperability standards, and service-based business models reshape how value is created and captured across the ecosystem. This is directly impacting the smart home, including video doorbells, networked cameras, and floodlights with cameras.

AI has shifted from a supporting feature to the defining competitive axis in smart video, but demand remains resilient, with U.S. smart video unit sales approaching $25 million in 2025 and projected to surpass $30 million in 2030. According to Parks Associates’ research, more than half of smart camera and video doorbell purchases occur online, reflecting broader consumer shopping trends; however, professional installation continues to play a meaningful role, especially as households deploy multi-camera setups.

AI is transforming cameras from passive witnesses into proactive security agents capable of engaging visitors, triggering alarms, or contextualizing what they see. Product launches reflect this shift, with increasing emphasis on intelligent event classification, descriptive alerts, pet tracking, stranger interaction, blind spot monitoring, and active deterrence.

Parks Associates’ latest consumer research shows that 57% of smart video product owners and intended buyers express interest in AI systems that can proactively interact with people at the door to understand intent or deter unwanted behavior.

As hardware differentiation fades, vendors must compete on AI performance, automation integration, and service tier innovation. The ability to deliver more relevant, contextual notifications is particularly vital. Alert relevance strongly correlates with customer loyalty, with helpful alerts producing Net Promoter Scores in the 60s vs. 30s or 40s for poor-quality alerts.  

Subscriptions Take Center Stage

Smart video economics are shifting from hardware sales to RMR. A majority of smart video product owners pay for a service either through a security system or a stand-alone subscription attached to a camera or doorbell. Paid services for stand-alone video device products (networked camera, video doorbell, and floodlight with camera) now represent one quarter of the entire home security services market.

Video doorbells show the strongest monetization, with a 66% paid attach rate. Outdoor camera owners also subscribe at higher rates than indoor-only owners, reflecting stronger use-cases for storage and analytics.

Cloud storage is the dominant model, with consumers spending $11 to $13 dollars per month on average. Major platforms such as Ring, Google Nest, and Alarm.com have introduced price increases or premium tiers offering 24-7 recording, expanded storage, AI analytics, or deterrence features.

At the same time, hybrid local-plus-cloud models represent a growing opportunity for privacy-conscious consumers or those concerned about subscription fatigue. Local storage also serves as an assurance mechanism as some vendors sunset legacy devices.

Ecosystem Competition Intensifies

Smart video hardware is increasingly just one node in a broader sensing and automation platform. Many camera makers lean on major ecosystems such as Apple HomeKit Secure Video, Google Home, or Matter-capable platforms to enable storage, AI analytics, device orchestration, and automation.

The launch of Walmart Onn cameras powered by Google Home, as well as the willingness of brands such as Aqara, Eufy, Eve, and Logitech to offload video storage to iCloud, illustrates a continued shift toward platform alignment rather than standalone device management.

Matter 1.5 is a major milestone, bringing IP camera support into the universal smart home standard for the first time. This update simplifies device onboarding and integration, defines consistent requirements for streaming and controls, and reduces siloing across brands. While this creates a better consumer experience, especially for mixed-brand homes, it also raises the stakes for ecosystem providers. As cameras drive subscription revenue, the battle for platform dominance shifts from hardware ownership to service layer ownership, with recurring revenue models becoming the primary competitive battleground.

Bundling Opportunities

Smart video devices increasingly serve as anchors for broader smart home bundles; in fact, 86% of smart home video device purchase intenders want to pair video cameras with other devices, especially motion sensors, smart door locks, lighting, and additional cameras. This consumer-led bundling reflects a shift away from traditional security panels and toward flexible, component-based security solutions.

Pet owners also emerge as a high-value segment. They adopt smart video devices and security systems at higher rates and are more interested in features such as smart search and generative video tools. However, they also experience more false alerts, underscoring the importance of context-rich AI.

This article is an excerpt from the Parks Associates' new research study Smart Video Products: Business Models & Features, published in December 2025.