The value of pro monitoring still strong despite recent challenges

Professional monitoring revenue forecast to reach $19.22B by 2024
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Wednesday, June 3, 2020

DALLAS—Parks Associates' Research Director Brad Russell shared some additional research with Security Systems News from Parks' “IoT: Extending Professional Monitoring for New Revenue” study that shows the value of professional monitoring is still strong despite recent challenges.

The research addresses how innovative companies are driving new revenue by extending professional monitoring services and offerings within the connected home.

Diving deeper into the numbers, monitoring revenue will reach $15.74B in 2020, an estimated slight decrease from $15.98B in 2019 due to “increases in attrition driven by economic downturn and decreases in net adds due to new account sales barriers,” Russell told SSN.

Overall, though, revenue grew from $10.69B in 2015, increasing at an 8 percent CAGR between 2015-2020, Parks noted.

While the growth rate is estimated to slow slightly in the coming years, Parks estimates that professional monitoring revenue will reach $19.22B by 2024, growing at a 5.1 percent CAGR between 2020-2024.

“Central monitoring is a high-margin business, and many stations have excess monitoring capacity, driving the industry to expand its value proposition beyond the standard security offering,” Russell said. “As more aspects of daily life get connected, and as people spend more time in the home, new opportunities emerge that cross multiple industries, including energy usage monitoring; risk mitigation from flood and fire; monitoring the health and safety of aging relatives; tracking of valuables; and appliance maintenance monitoring.”

Smart home services, which account for $1.2B in monitoring revenue, will continue to grow as “it’s one of the leading drivers of ARPU [average revenue per user],” Russell said.

He noted other services driving additional revenue on top of legacy systems, including:
•    Interactive services (basic remote connectivity);
•    Smart home control services (home automation);
•    Video services (cloud storage, live streaming, analytics, video verification); and
•    PERS services may be bundled with security or purchased as standalone, not included in the total revenue figure.

When asked what some of the more successful monitoring companies are doing to stay relevant and profitable, especially during these challenging times, Russell noted that they are:
•    Adding or improving their direct to consumer security offerings;
•    Optimizing their on-line sales process;
•    Adding or improving self-install options with do-it-with-me support;
•    Promoting independent living solutions for elder care; and
•    Personal mobile monitoring, such as what ADT has rolled out, for individuals and for gig economy company workers, such as Lyft and Doordash.

Looking at how innovative companies are driving new revenue and RMR by extending professional monitoring services and offerings within the connected home, Russell said, “The report discusses a variety of targets for monitoring, including: appliances, safety sensors (smoke, fire, water, gas), tracking beacons for personal property, PERS and other forms of personal safety inside and outside the home, pets, and more.”