Residential security providers spent much of the past several years responding to a new form of competition. Video doorbells, networked cameras, and other smart home products gave consumers inexpensive ways to protect their homes without buying a traditional security system. System acquisition slowed, and standalone devices captured a growing share of consumer spending.

Traditional security providers responded by adding video devices and interactive systems with apps, along with DIY systems with more flexible monitoring options. Overall, home security is growing. Parks Associates research shows that ownership of a security solution – including both traditional systems and standalone video devices – grew from 41% of U.S. internet households in 2022 to 49% in 2025.

Despite growth in hardware, paid service uptake has been largely flat for several years, a trend that favors smart home-first manufacturers and puts security system providers on the defensive. Security providers are looking to AI, flexible monitoring, connected care, and broader safety services to expand the value of the customer relationship.

The Quick Take

• Traditional home security remains a large market, but growth in paid services has moderated.
• Security providers are moving into adjacent services that leverage existing strengths: trusted brands, installed devices, recurring service relationships, and always-on sensing.
• The winners will be companies that deliver value beyond traditional security across home automation, health, and energy.

AI Is Becoming Central to the Business Model

AI is now central to the next phase of residential security, but companies are utilizing different strategies – especially the smart home-first players. Eufy is positioning AI as part of the product itself, free of any service revenue. Its EdgeAgent approach processes events locally and uses on-device intelligence to detect, analyze, and respond to potential security events – appealing to consumers who want advanced features but resist recurring charges and cloud-based data processing.

Blink is taking the opposite approach. As Amazon's value camera brand, Blink keeps hardware affordable while using cloud-based AI features to create new subscription value. Video descriptions, single event alerts, known-face recognition, and unusual event alerts give consumers more reasons to pay for services on top of low-cost devices.

These two strategies show where the market is headed. AI features will quickly become commoditized – person detection, package detection, familiar faces, and event summaries will not remain premium differentiators for long. The real differentiation will be how intelligence is packaged: locally, in the cloud, as a subscription, as part of monitoring, or as a privacy-first feature.

For security providers, AI must do more than describe events. It must reduce false alarms, improve verification, and create better response. Parks Associates research shows strong consumer interest in video verification and AI-powered sensor analysis.

Connected Health Is the Biggest Adjacent Opportunity

Connected health may be the most compelling long-term growth opportunity for residential security providers. It builds on many of the same capabilities that define home security: trusted brands, professionally monitored services, installed sensors, mobile alerts, and emergency response. The same home that detects motion, doors opening, glass breaking, or smoke can also detect patterns that matter to daily living. Is someone up and moving at the usual time? Has activity changed? Did a fall occur?

Recent market moves show different paths into this opportunity. ADT's acquisition of Origin AI expands Wi-Fi sensing beyond intrusion detection, opening opportunities in occupancy awareness, wellness monitoring, and passive safety applications. Arlo's acquisition of Aloe Care Health brings caregiving and medical alert capabilities into its subscription platform. Wyze's BodyScan scale shows how health devices are becoming another endpoint in the connected home.

Connected health requires intelligence, and it needs to serve the right audiences – the individual who wants independence and the family member or caregiver who needs actionable insight. Notifications must be meaningful. Data sharing must be user-controlled. Privacy expectations will run higher than in traditional security.

Accuracy is also vital. Fall detection, mmWave sensing, Wi-Fi sensing, and AI-based behavioral analysis must work reliably across diverse home environments. Security companies entering this market will need to deliver quality service without overpromising what the technology can do.

Energy Management Builds on the Installed Platform

Energy management offers another route to service growth, particularly because security system owners are already more receptive to these capabilities than the average household. Most security systems sold today connect with thermostats, appliances, and other smart home devices – giving the platform an always-on connection, knowledge of occupancy, control of connected equipment, and an established application for alerts and routines.

Parks Associates research finds that 67% of security system owners consider monitoring for faulty wiring or fire hazards valuable, compared with 56% of U.S. internet households overall. Nearly two-thirds value appliance maintenance alerts, energy use data on individual devices, monthly bill tracking, and notifications when household consumption exceeds a budget. Vivint's HomeProtect Pro plan, introduced in November 2025, illustrates how energy can become part of the recurring service relationship.

The strongest opportunity is connecting energy management to capabilities the security platform already performs. Occupancy information can adjust heating and cooling automatically. Electrical monitoring can identify safety risks and inefficient equipment. And unlike security monitoring – purchased to manage events consumers hope never occur – energy management demonstrates value every month through lower bills, maintenance warnings, and greater control over household costs.

The Industry Still Has Untapped Growth Paths

Many providers are already expanding into video, AI, and connected care, but several strategies remain underdeveloped.

The industry has yet to fully productize flexible monitoring. Many consumers see monitoring as a binary choice: pay every month or self-monitor. The market is ready for hybrid options – on-demand professional monitoring during vacations, travel, or temporary caregiving needs.

Providers can also do more with household risk management. Consumers show strong interest in services beyond intrusion – fire and gas detection, water leak monitoring, vehicle safety, pet monitoring, and personal safety – all of which fit naturally into the security relationship.

The caregiving opportunity is similarly underdeveloped. Many families are piecing together cameras, smart speakers, wearables, medical alert devices, and apps to support aging parents or vulnerable family members. Security providers could simplify that experience with a trusted platform combining passive sensing, emergency response, family alerts, and professional escalation.

Finally, partnerships will matter. ISPs, utilities, insurers, healthcare companies, and tech platforms all have reasons to enter parts of this market. Security providers need to own the customer relationship and the trusted response layer – the best strategies will combine internal capabilities with partnerships that extend reach without diluting trust.