Security Monitoring Fees for U.S. households have increased 15% since 2007

Home security companies have avoided the worst of the recession due to a stable core of consumers who have kept their monitoring services despite rising fees.

In a recent report Home Systems: Home Security - Analysis and Forecasts, Parks Associates finds the average monitoring fee for a U.S. household increased from $28.60 to $32 between 2008 and 2010. This rise has kept revenues from home security relatively stable, despite declines in overall sales due to weak home sales and catastrophic drops in new starts. This strategy relies on a group of existing customers who will retain their service despite rising monthly costs, which has been successful but has its limits.

IP technologies open the door on all industries to new, nontraditional competitors. Moving forward, the security industry must be careful not to raise monthly fees too quickly, or it risks accelerating entry of these new players. Continued aggressive fee increases may create short-term benefits but risk long-term turbulence. Instead, security companies need to reposition to win new customers, rather than expecting their existing customers to carry the burden.

Parks Associates finds monitoring revenues keeping home security industry afloat during recession

New report reveals monitoring makes up 75% of home security revenues --

Monitoring revenues are still the financial bedrock of the U.S. security industry, constituting 75% of all revenue, according to Home Systems: Home Security Update, which reports monitoring will cushion this market during the recession.

This new report from Parks Associates finds the number of monitored security households intending to cancel their service is only 4-8% higher than normal due to the economic downturn. The report also warns that the resilience of this service category will attract new competitors.

Home Systems: Home Security Update reports the number of monitoring service subscribers will not increase as quickly now as in past years due to the drop in new starts and the lower number of households moving into new residences. However, the current base of customers shows a predilection to keep their monitoring services and will even tolerate a small fee increase.

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