The “2006 Worldwide Video Surveillance” market report by J.P. Freeman Co. has been released with all the new developments driving the growing surveillance market.

Most of the information concerns the commercial and government (institutional) markets where the great majority of the sales volume has been for quite some time. However, J.P. Freeman Co. has also been watching the residential market carefully, since there are indications there is real, albeit early, market expansion.

Calls, Research Serve as Indicators
One of the indicators for J.P. Freeman Co. has been the consulting business itself, which is very active in the video area with all the work being done now in IP, intelligent software, smart chips, uncooled night vision, motion, miniaturization, durability, resolution and other areas. However, the most reliable indicator is Freeman’s research. The company is constantly in touch with hundreds of integrators, dealers, distributors and contractors in the various industries that service the American household.

It’s one thing to know what everyone else knows when a market becomes mature. But just like Wall Street, it’s too late by then to determine if there are investment opportunities that no one else is seeing yet.

Numbers Don’t Tell the Whole Story
From what I’ve seen in the video surveillance market, the door is opening wider each month in the residential field.

Clinically speaking, the charts below show the difference between early 2005 and early 2006 of the percentage of video security system users according to manufacturers. While the residential percentage only increased from 5 to 6 percent — and even if the one-point difference is within the standard deviation — the video market is growing at 20 percent a year. If the one-percent difference is statistically significant, that’s a 20-percent increase in share on top of a 20-percent increase in market growth rate.

The fact that there is so much of an increase in the government share of video purchases is no surprise given all the attention now paid to our national infrastructure. The same goes for other facilities like colleges, schools and hospitals that are government-related in some regulatory manner. Despite the growth in the commercial and government sectors, residential video should not be ignored. For example, the Feb. 9 edition of The Wall Street Journal reported on a “test” it conducted among five consultants who advised on how to protect residences in different geographical locations. In one case, a video monitoring system had been recommended for an eight-unit apartment building in New York City. Another consultant, a locksmith, recommended against it as “overkill.” But the point is that someone had recommended video for residential security purposes.

Although it is still early in the game, we believe these and other signals point to the newest trend in home security.

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