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Turbulence hits $12.5 billion Alarm Monitoring Market in Americas
The evolution of the alarm-monitoring market, from professionally monitored systems to connected systems, is partially driven by MSOs
Despite the increased pressure from do-it-yourself (DIY) systems, the professional alarm-monitoring market is expected to thrive over the next five years, as connected systems supersede traditional alarm-monitoring systems. Traditional alarm monitoring in the Americas region is expected to continue to expand in 2018, but it will start to decline in 2019, as more systems are converted into web-connected offerings.
Although security providers will continue to make up more than 80 percent of monitored systems through 2022, MSOs and DIY installations will begin to erode market share. This erosion is especially evident with MSOs, because over the next couple of years more MSOs in North America are expected to launch private systems outside the former Icontrol Networks platform, which was recently acquired by Comcast.
The evolution of the alarm-monitoring market, from professionally monitored systems to connected systems, is partially driven by MSOs. Collectively, MSOs and professionally monitored DIY systems — such as Frontpoint and LiveWatch (now being rebranded and folded into Brinks Home) — will account for 20 percent of professional alarm monitoring in 2022. In fact, MSOs in North America will be equal to half the total residential monitoring market in the Europe, Middle East and Africa (EMEA) region in 2022. The cable companies will accomplish this market growth through deep integrations with their existing platforms. Although combining television, internet, telephone and security is a natural transition for MSOs, some companies have struggled to gain share, but Comcast has been the exception, controlling 78 percent of MSO monitored accounts in the United States in 2017.
Since the systems provided by the DIY market and MSOs are mostly connected, security providers must continue to innovate and educate dealers, in order to convert existing accounts and demonstrate competitive value for new accounts. As a result, moving customers from a connected system with interactive security functions, to a full home automation system, will be the biggest hurdle to overcome.
-- Blake Kozak, smart home and security technologies, principal analyst, IHS Markit.
