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Report: MSOs in best position to benefit from smart security

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11/18/2014

AUSTIN, Texas—Multiple-service operators—the cable companies and the telecoms—are leading the way in integrating security equipment and home automation at the future expense of traditional monitoring companies and high-end providers according to an IHS report.

Good news for security companies: Cable Guy’s customer service ratings fall to new lows

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Wednesday, May 21, 2014

Professional security companies proudly point to the good service they give consumers as an important differentiator between them and their giant cableco and telecom competitors. And a new consumer satisfaction survey suggests they don’t have to worry about losing that edge to the Cable Guy anytime soon—because it shows new dips for Time Warner Cable and Comcast, and AT&T and DIRECTV don’t fare too well, either.

The American Customer Satisfaction Index released its annual measure of the communications industries this week. The ACSI report measures consumer satisfaction in such categories as Internet service providers (ISPs), subscription TV service, fixed-line and wireless telephone service, computer software and cellphones, according to a news release. Ratings are done on a 100-point scale.

“Customer satisfaction is deteriorating for all of the largest pay TV providers. Viewers are much more dissatisfied with cable TV service than fiber optic and satellite service (60 vs. 68). Though both companies drop in customer satisfaction, DIRECTV (-4 percent) and AT&T (-3 percent) are tied for the lead with ACSI scores of 69. Verizon Communications FiOS (68) and DISH Network (67) follow.”

AT&T’s and DIRECTV’s dips in customer satisfaction are of particular note because I just wrote about how AT&T’s $48.5 billion plan to buy DIRECTV could impact Digital Life—AT&T home security/home automation offering—and the security industry.

Hmmm…a dip in customer satisfaction regarding any part of those companies’ businesses doesn’t seem like a positive—especially if they want to bundle services!

There’s also a $45 billion pending deal for Comcast to buy Time Warner Cable. Both of those companies have home security/home automation offerings but they’re not making customers very happy, at least when it comes to TV and Internet service, according to ACSI.

“Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5 percent to 60, while Time Warner registers the biggest loss and plunges 7 percent to 56, its lowest score to date,” the news release said.

The release also has a prepared statement from David VanAmburg, ACSI director: “Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories. Still, it's a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It's hard to see how combining two negatives will be a positive for consumers.”

Customers also aren’t happy with their Internet service from such providers, according to ACSI.

“High prices, slow data transmission and unreliable service drag satisfaction to record lows, as customers have few alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1 percent to 63, the lowest score in the Index, the release said.

“At an ACSI score of 71,Verizon's FiOS Internet service continues to lead the category, surpassing AT&T, CenturyLink and the aggregate of other smaller broadband providers, all at 65,” according to the release. “Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6 percent fall to 64. Customers rate Comcast (-8 percent to 57) and Time Warner Cable (-14 percent to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.”

However, customers are happy with their cellphones. That rating is “up for a second straight year, rising 2.6 percent to a new all-time high ACSI score of 78.”

The release said, “Steady growth in the use of smartphones, which have much higher levels of customer satisfaction, helps drive the overall industry gain. However, as data usage increases, costs to access overloaded networks are high, leaving customer satisfaction with wireless service providers stagnant at an ACSI score of 72.”

ACSI found that, “among wireless phone providers, Verizon Wireless separates from the pack after climbing 3 percent to 75. T-Mobile (69), Sprint (68) and AT&T Mobility (68) are tightly grouped behind. As smartphone adoption continues to grow, network demands increase along with costs to the consumer, each contributing to stagnant customer satisfaction.”

Also interesting were the ACSI POTS ratings. “Customer satisfaction with fixed-line telephone service dips 1.4 percent to an ACSI score of 73, but remains the most satisfying of all types of telecommunications. However, the score is due to shrinking landline usage. As more households abandon fixed-line service for cell phones, the customers that remain tend to be the most satisfied,” the release said.

AT&T to buy DIRECTV for $48.5b

Analysts: Deal could result in potential monitoring synergies, bundling opportunities
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05/19/2014

DALLAS, Texas and EL SEGUNDO, Calif.—AT&T plans to buy DIRECTV for $48.5 billion, the companies announced this week. The deal will allow AT&T to expand its broadband network to more than 70 million customer locations, the companies said.

Investor speculates on Monitronics outlook

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Wednesday, April 23, 2014

Greater visibility, broader market acceptance and (for some central stations) more wholesale monitoring accounts are just some of the benefits often mentioned in connection with the entrance of cablecos and telecoms into security.

A recent Wholesale Monitoring study by the Barnes Associates (co-sponsored by the CSAA and SSN) largely attributed the 19 percent growth the segment enjoyed in 2013 to the influence of the new entrants. To be sure, there seems to be a prevailing belief that the rangy, big-money advertising campaigns of such companies can be the proverbial “rising tide that lifts all boats.”

That’s not to say there’s no ambivalence. That was apparent enough in a recent SSN News Poll that dealt with the topic. A number of readers expressed concern about the long-term viability of smaller players in the home security space, given the influx of these major corporations who have already made inroads into the home through Internet and cable, and thus have that previously established “stickiness.”

That ambivalence was also reflected in a recent analysis by Rajiv Bhatia on Seeking Alpha, a crowdsourced platform for investment-based ideas, who discussed what the new market players could mean for Ascent Capital, the holding company of Monitronics. Bhatia acknowledged that the company faces “increased competition” from the large new cableco/telecom entrants, which he says are gaining traction despite unsuccessful forays into the market in the past.

Regarding Monitronics’ business model, Bhatia offered a mixture of encouraging and somewhat cautionary words:

“While management and sell-side analysts believe that Ascent is better insulated from competition via its dealer-only business model, Ascent faces upward pressure on the multiple it pays for its dealer contracts from competitors. Additionally, its growth through its internal channels is weakening.”

Those multiples, he noted earlier, are based on an RMR multiple of 50. Ascent faces “upward pressure on the multiple it pays to acquire contracts,” he said.

With more than 1 million subscribers, Monitronics trails only ADT in terms of marketshare in the alarm monitoring space. It will be interesting to watch what happens to the market presence of both companies as the cableco/telecom ads continue to appear on our television screens.

Readers warming up to stand-alone home automation

Most News Poll respondents say security companies should at least offer a smart home-only package
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08/07/2013

YARMOUTH, Maine—In June, Comcast, a relative newcomer to the industry, rolled out Xfinity Home Control, which allows homeowners to control lights and thermostats and remotely view rooms in their homes without what was traditionally the foundation of such a package: a home security system.

iControl woos app developers

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Wednesday, July 24, 2013

This week, iControl Networks, the software platform used by ADT’s Pulse, and a number of cable companies, including Comcast's Xfinity Home, Time Warner Cable's IntelligentHome and Rogers Smart Home Monitoring, announced that it’s launching an Android App Partner Program, called the “FastTrack App Partner Program.”

It’s an initiative that will “allows Android apps to be easily and quickly certified compatible with touch screens that support the iControl Converge deployment solution, which powers leading home solutions,” iControl said.

In a prepared statement, Jason Domangue, iControl's VP of ecosystem development, said that program opens a new distribution channel for app developers. "FastTrack makes it easy and seamless for app developers to team with leading cable service providers for in-home distribution, and increases comfort and convenience for consumers by providing unique, innovative apps tailored for the smart home."

IControl announced the first five members of the partner program: Life360, which provides location and communication for families; MapQuest, which provides maps and traffic information; News Republic, which provides customizable global news alerts; TuneIn, which provides online radio and music streaming, and the Weather Channel, which provides detailed forecasts and future radar.

An app developers kit is available on the company’s website. “Certified applications will live in iControl's marketplace and become accessible to millions of consumers around the globe,” the company said.

Does retail sell security short? Readers split on value of stores

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06/25/2013

YARMOUTH, Maine—Selling home security at retail stores is one of the hottest trends in the industry. Comcast, AT&T and Lowe’s are among the big players doing it, and some smaller companies are carving a niche there as well. But the majority of SSN poll respondents see it as something else: a fad that won’t be supported in the long run by customers.

Comcast’s new offering: Home control minus security

Xfinity Home Control is for customers who don’t want a security system but want home management features
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06/19/2013

PHILADELPHIA—A mantra in the industry today is that customers want more than a basic home security system—they want extras to control their lights and thermostats and remotely look in on kids and pets. But Comcast Cable believes there are customers out there who don’t want a security system but still would like those useful features—so it’s offering a new product just for them.

Time Warner going retail with IntelligentHome

The company is offering the home security/home management product in its stores nationwide
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06/19/2013

NEW YORK—Time Warner Cable is joining the new trend of retailing home security by offering IntelligentHome, its home security/home management product, in its several hundred retail stores nationwide, according to Adam Mayer, VP of IntelligentHome.

Meet the Class of 2013

More women, lots of interest in technology in this year's class
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06/12/2013

YARMOUTH, Maine—The editors of Security Systems News are pleased to present the “20 under 40” Class of 2013.

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