I’ve written before about major telco and cable providers who are testing the waters in home alarms, which does seem like a natural extension of the services they are already offering. However, other companies have tried before, and the results have generally not been pretty. In my last post I talked about Comcast, Verizon and even Canadian provider Rogers (no relation!). Today we’ll focus specifically on Comcast, since they are now making a major push into residential security. A recent article on the Comcast alarm platform provides plenty of detail.
Sound the alarm: cable is breaking and entering into the sleepy home-security market, and it has some pretty cool new tools up its sleeve. Among major broadband providers, Comcast is out in front in trying to tap into what analysts estimate is a $8 billion category. After offering home-security service in Houston for about a year, the nation’s biggest MSO last week said it is expanding Xfinity Home Security into six additional U.S. market areas.
Why Comcast (and Others) Are Adding Home Alarms
To those of us watching the alarm industry, it’s pretty clear why Comcast is making this move. They have unusually high cancellation rates in their “core” services (such as cable entertainment), which are very profitable. They know that the average alarm customer stays around longer than the average cable customer: by offering a “bundled” service that includes home security, they hope to increase customer retention, especially on the profitable services. It even makes sense to lose money on the alarm equipment and barely break even on the alarm services, if it means they make more over time on the other services – because remember, you can’t buy just the alarm portion. That’s the “gotcha” in the equation. Here’s the spin:
“We think it’s a natural integration with our other products,” Comcast Cable senior vice president and general manager of new businesses Mitch Bowling said. “The reason we’re doing this now is, the technology capabilities have just recently become something that isn’t a custom install.”
Another factor compelling broadband operators to offer home-security services is that they’re looking for new revenue streams as the growth of the high-speed Internet and telephony legs of the triple-play slows, Bill Ablondi of Parks Associates noted: “They’re asking, what else can I provide in the home on top of the broadband connection? For folks like Comcast and Time Warner Cable, this is the last billion-dollar market left.”
ADT Weighs In
ADT – which has 15,700 employees serving more than 6.3 million home and small-business customers – is responding to the incursion on its home turf by the likes of Comcast, Time Warner Cable and others. “We have mammoth monitoring capabilities versus the competition,” ADT director of public relations Bob Tucker said. The firm has been in the security space for more than 135 years and claims to have 95% brand awareness.
Would You Trust a Cable Company to Protect Your Home?
“We believe based on our own research, and based on consumer feedback, that we are the right company to provide service, said Comcast’s Bowling.” Cable does suffer from lower-than-average customer satisfaction, but the industry is in no worse shape than others in the competitive environment, according to Parks Associates, who closely follow the alarm industry.
Initial consumer reactions to cable providers (and Comcast in particular) offering alarms are mixed, with one web site affiliated with Consumer Reports fielding many comments that indicated a thumbs down. Here’s the link, and my favorite is this one, a simulated response from the service provider 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.”
We’ll keep an eye on the competitive landscape for you, and post the particulars when we see something of interest. We do know that alarm systems have evolved, and that FrontPoint was way ahead of the pack when it comes to interactive monitoring.We’re the leader in wireless home security, and the #1 ranked alarm company in the US – and we earned that spot with technology, pricing, and customer satisfaction that leaves the others far behind. That’s why smart shoppers choose FrontPoint: safer, smarter, simpler, more affordable, and virtually impossible to defeat. Just read the reviews, and you’ll want a FrontPoint system too.