IHS: Video doorbells could be gateway for greater adoption of video verification

Jan. 31, 2017
Increasing consumer familiarity with cameras to help raise awareness, lower privacy concerns

As municipalities and law enforcement agencies have looked to clamp down on false alarms in recent years, some have adopted policies that prioritize calls based on whether or not there is video evidence that a crime is actually occurring on the premises. But while many homeowners have been reluctant to install cameras in their residences due to privacy concerns, a new report from IHS Markit says that the recent introduction of video doorbells in the marketplace may pave the way for greater adoption of video verification in home alarm systems.

According to Anna Sliwon, residential security analyst for IHS, a video doorbell is the first experience of many homeowners with an IP camera. The process of installing it, setting up the accompanying app and then later using it to view something remotely all help to build consumers’ familiarity with network cameras, which subsequently raises consumer awareness and lowers privacy concerns, two of the main barriers responsible for slowing adoption of video in the home in the past.

Sliwon said this also has the potential to lead to increasing demand for integrating video doorbells with home alarm systems. A rise in the popularity of video integration with intruder alarm systems potentially creates new product development and marketing opportunities, according to the market research firm, as it enables integrators and installers to upsell cameras as part of their standard offering and gives manufacturers a unique selling point to market.

In addition, cloud storage services offer another opportunity for revenue generation, which professional monitoring companies could try to integrate with their existing service offerings, Sliwon said.

However, increased consumer preference for video cameras could result in less spending on traditional intrusion equipment like PIR detectors, magnetic contacts or break glass sensors. In the short-term, IHS believes cameras would likely be adopted as an add-on to the existing system, thus strengthening the abilities of the traditional equipment and the system overall. But, as video analytics continue to improve, Sliwon said it remains to be seen how this trend could affect demand.

In 2015, 1.1 million (21 percent of) residential connected professional monitoring service contracts included some form of video monitoring service in the American region, according to IHS. This proportion is forecast to increase, particularly with the emergence of facial and object recognition, promising to further enhance the future functionality of video verification. This functionality offers potential savings both to consumers and providers of monitoring services through lowering false alarm rates, Sliwon said. 

Future Opportunity for Video Doorbells

Professionally installed alarm solution providers such as Vivint, Comcast and Alarm.com are adding video doorbells to their offerings. Currently, however, the typical profile for a buyer of a video doorbell (young and tech-savvy) is also closer to that of one who would purchase a DIY alarm system rather than a professionally installed system. Sliwon said it is therefore likely that in the short-term, the DIY market will feel these proposed effects first if they are to become apparent.

With a global market size of $78 million in 2015, video doorbells are only just beginning to gain traction among residential consumers. Their adoption is still largely limited to the U.S. and despite many new entrants; market supply is currently concentrated with a few larger suppliers such as Ring, Sliwon said. As competition increases, demand will accelerate and prices will fall, according to IHS. However, the primary barrier today remains price. A normal, non-video-capable doorbell costs less than $20, while video doorbell costs often exceed $150.

IHS forecasts that the global market for video doorbells will experience a 28 percent CAGR over the next five years. As the market continues its rapid ascension, partnering with video doorbell providers could prove lucrative for home alarm manufacturers and service providers.

Another option, according to Sliwon, would be to work with third-party integration software providers like IFTTT and Stringify to build a clean, easy-to-use integrated solution.