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There's a bright side for traditional dealers with DIY/MIY, really

There's a bright side for traditional dealers with DIY/MIY, really UCC's Mark Matlock discusses opportunities in the market

First and foremost, I am careful not to plant any stakes in the ground regarding the future of this industry. I have been in the electronic security industry for 30 years, and I have never witnessed anything like the sweeping changes in the industry today, especially regarding DIY/MIY.

Never have so many new entrants from other industries entered this space. Never has technology advanced so much, so fast with so many new products flooding the market. It's tougher than ever for the independent alarm dealer to compete, and I do believe that it will get even tougher in the future. However, I also believe there will be ample opportunity for independents who adapt to change, who proactively stay in touch with their customers and who keep an open mind.

From 1990 to 2010, the industry dealt with a rock-steady 20 percent penetration rate in the residential market. Only in the past five years have we begun to break through that glass ceiling. I believe that there are millions of homeowners who were never going to buy a professionally installed alarm system from an alarm company. This is not conjecture: Those 20 years prove this point.

What I see is that DIY/MIY systems are very appealing to those millions of people who want security but don't want a professionally installed system. I also believe that press coverage about unethical door knocking companies has hurt traditional alarm dealers and opened wide the doors for DIY.

On the positive side—I'm an eternal optimist—I believe that the massive amounts of advertising dollars pouring into the industry from all these new entrants will raise awareness for security and home controls and will create opportunity for everyone; to borrow an old expression, “a rising tide floats all boats.”

I believe that the industry will continue to see a steady increase in residential monitored alarm systems, even of the professionally installed variety. And, I also see RMR going way up as home controls and interactivity become the norm on the majority of newly installed alarm/home control systems.

Regarding MIY, I don't believe these people were ever going to buy professional monitoring so I don't see any harm to the industry there. In fact, most MIY customers still pay a monthly fee to be on the provider's platform. In that regard, MIY is actually bolstering revenues and profits for the providers of the MIY services.

Lastly, I also believe the industry will see a massive sell-off from traditional alarm dealers who refuse to change with the times and who can no longer compete. This will make for great opportunity for aggregators.

Welcome to the Wild West of electronic security!

Mark Matlock is SVP for United Central Control, which is based in San Antonio.


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