DALLAS — A new report by Parks Associates reveals monitoring makes up 75 percent of home security revenues, providing a cushion for the industry during the current state of the economy.
Titled Home Systems: Home Security Update, the report finds the number of monitored security households intending to cancel their service is only 4 to 8 percent. While the cancellations are higher than normal due to the economic recession, the report warns that the resilience of this service category will attract new competitors.
“Traditional security providers must anticipate communications and entertainment service providers will introduce their own home monitoring systems,” says Tricia Parks, CEO, Parks Associates. “There have already been announcements in Canada and Europe for home monitoring using security as a primary application. It is reasonable to presume carriers will do the same in the U.S.”
The number of monitoring service subscribers will not increase as quickly as in past years due to the drop in new starts and the lower number of households moving into new residences, yet the current base of customers shows a predilection to keep their monitoring services.
Parks suggests that a slight increase in monthly fees will not cause current subscribers to abandon monitoring services.
“Security providers can use a minor fee increase to offset immediate losses due to slower market growth and increased competition,” says Parks. “What is critical, nonetheless, is understanding the exact amount of increase that customers can bear.”
