With many of the cable and telecom “big boys” deciding to entry the highly competitive world of home security, it was only a question of time before Time Warner got back in the game. I say “back in the game” because they were once engaged in the business of protecting homes and families; however, like most of their colleagues in cable and telecommunications, they exited the alarm space some time ago. But now they are back, following in the footsteps of Comcast, Cox, Verizon, Rogers (in Canada), and even AT&T. The alarm industry is watching these new entrants closely, and some significant players have taken an outspoken stance, as this article from Seattle demonstrates.
For decades, the only theft the cable industry worried about involved people trying to get MTV and HBO without paying for them. Now some of the biggest cable companies — including Comcast and Time Warner Cable — are looking to do more than just safeguard their signals from piracy. They want to use their broadband service to provide a home-security system that would protect your big-screen television, the couch in front of it and even the family jewels.
What is Driving Cable Companies to Home Security?
The cable industry is facing myriad challenges to its core businesses. The weak economy has led many consumers to cancel their pay-television service, while others are switching to competing video-delivery options, including satellite operators, telephone companies and the online services Netflix and Hulu. Finding new ways to keep subscribers hooked up is crucial. “The industry is increasingly looking to squeeze more juice out of their relationship with the customer,” said Rich Greenfield, a media analyst with financial services firm BTIG.
The fact is that the average home alarm customer stays around much longer than the average cable customer: by “bundling” these services, the cable giants believe they can stem the tide of cancellations on profitable services by adding an additional service with greater longevity – home security. My prior post on this topic offers some great background information.
More on Why
“All of our research said it was a good business to go after,” said Keith Burkley, Time Warner Cable’s senior vice president responsible for the company’s Intelligent Home security system. “The market is 20 percent penetrated, and we really believe it is going to grow to over 30 percent.”
In the past, even the most sophisticated home-security systems were clunky and costly, requiring lots of hard wire, typically connecting to a landline telephone. Now wireless allows for video cameras, motion detectors and door sensors. Even lights and the thermostat can be controlled from a remote wireless. “It’s taking the best of security and marrying it with the cutting edge of technology,” said Mitch Bowling, Comcast’s senior vice president and general manager of new businesses. At the same time, the price has dropped. A system that would have cost thousands of dollars to install less than a decade ago now runs only a couple of hundred bucks.
And nobody knows the pricing comparison better than FrontPoint – since we are known for having the most affordable systems around, both for the initial equipment purchase, and the monthly services.
Initial consumer reactions to cable providers offering alarms are mixed, with one web site affiliated with Consumer Reports fielding many comments that indicated a thumbs down. My favorite is this one, a simulated response from a cable company after an alarm event:
“We just received an alarm from your XFinity Security System. The police are scheduled to arrive between 9:00 am and 1:00 pm next Thursday. Please make sure someone is home to let them in. Or, if you prefer, you may choose the self-arrest option.”
As a “real” alarm company that is focused on protecting homes and families, FrontPoint welcomes the advertising budgets that these new entrants will bring to increasing public awareness of interactive monitoring services – exactly the advanced features that FrontPoint has offered since our inception in 2007. We also expect that the more people research their options, the more they’ll choose FrontPoint. As the leader in wireless home security, we specialize in the best protection: that’s why we’re the #1 ranked alarm company in the US. FrontPoint is safer, smarter, simpler, more affordable, and virtually impossible to defeat.