The traditional home security business, with its slow-growing, contract-based, monthly revenue business model, faces significant challenges during the next five years. Equipped with a wealth of new and innovative technology options for both home security and home automation, homeowners are eschewing new contracts and fees. Instead, many are opting to design, install and monitor home security systems that they can customize to meet their needs and budgets, according to a recent report from ABI Research’s Smart Home Market Research.
The challenges that ABI highlights are also faced by telecom service providers that have ventured into the home security market.
The report, Home Security Services Evolution: Staying Relevant in the IoT World forecasts that up to 15 million households will account for new growth in the connected home security market between now and 2020. Home security vendors that hope to thrive, instead of merely survive, during this time period will have to find ways to enhance their core service offerings and make other necessary adjustments to their business models.
For example, they can partner with smart home services such as call-center monitoring as a plug-in service, or they can bring home video monitoring to their call centers, according to Jonathan Collins, Principal Analyst. Partnering with smart home players of all types will enable home security providers to offer turnkey solutions to homeowners that do not wish to DIY their home security, and cause some who do to think twice about it. New partners also get home security providers up to speed quickly about new security options and trends, as well as the evolving needs of their customers.
The ABI report makes it clear that self-install and self-monitor solutions pose a threat to standard business models and it won’t be easy for traditional providers to imagine living without their monthly recurring revenues. However, the shift does present them with the opportunity to re-invent their businesses and make the most of good relationships that they have built with their existing customers over many years. A true willingness to change and partner with others, combined with their deep knowledge of the home security business to date, will give home security providers – including telcos that offer home security — more than a fighting chance to come out on top.