The CEDIA/security overlap

There's talk of increased crossover, but is it happening?
Thursday, September 9, 2010

INDIANAPOLIS—When the CEDIA Expo opens in Atlanta Sept. 22, it is likely there will yet again be more security representation there than ever, or such is the conventional wisdom and anecdotal evidence.

“There’s no question there’s a convergence occurring across the board,” said CEDIA CEO Utz Baldwin, who used to run an electronic systems installation company himself. “The indicators started appearing years ago that I needed to start offering security. My builders and customers were really looking to turn to one provider for all the technology needs in the home.”

Thus, it’s not surprising that CEDIA and ESA have been collaborating more and more in recent years, culminating this past year in CEDIA offering education on the home systems and A/V marketplace at the ESX show, and ESA offering courses at this upcoming Expo on how to enter the security market.

However, the numbers CEDIA discovered in its bi-annual Benchmarking Survey may not indicate that it’s a trend for electronic systems guys to be approaching security.

In the survey of CEDIA members, conducted by third-party firm Brand Ubiquity, 62 percent of respondents indicated revenue from “security/CCTV.” That’s a sizable number, but it’s slightly less than the 66 percent who collected revenue from security/CCTV in 2007.

Further, respondents this year said security/CCTV represents just 5 percent of their revenue, a small decline from the 6 percent reported in 2007.

Admittedly, those numbers are likely within the margin of error for the survey, and you can say they stayed essentially flat, but there’s certainly no evidence there of an explosion of interest.

What’s going on? Though there’s no numbers available to support the conclusion, it may well be that security guys are interested in doing CEDIA work. The average project size of $37,000, which has remained stable since 2007, could very well be attractive. But what about the average net margin of just 3.5 percent? Are residential security guys going to be happy with that?

It’s hard to say, and Baldwin allows that the collaboration with ESA is as much about getting out ahead of market trends as it is listening to member feedback. “An association’s job is to be forward thinking and look at the market, and the make up of our association is quite a bit different than when it was first formed in 1989. Back then it was primarily A/V companies, small independent contractors that were trying to purchase consumer electronics directly from the manufacturers. We weren’t even a recognized channel.”