How it works around the home
- By Keith Jentoft
- Apr 01, 2015
Market pressures continue to squeeze the residential alarm
business with attrition and alternative solutions. Monitored
outdoor protection, adding a layer of perimeter security
around an existing indoor alarm, delivers tangible value to
actually grow and stay ahead of evolving markets.
The alarm market is changing.
Home Automation RMR is declining as consumers discover free alternatives
sold at big box stores for interactive lighting, locks and thermostats.
New DIY alarm systems seek to displace the installer as customers buy direct.
A similar wave of self-monitored systems sold through Amazon and
BestBuy seek to displace Central Station monitoring. The sky is not falling.
Residential dealers now have a new tool to drive up RMR and resign multiyear
contracts and deliver greater value with increased protection.
What is best is that the “solution” is still squarely security and not an
HVAC upgrade. Perimeter security with priority police response is a strong
selling point to enhance alarms where the police respond slowly, if at all.
Except for residential, outdoor perimeter security is mainstream and
literally everywhere—and it is based on video. Outdoor cameras protect
cities and public buildings. Sophisticated surveillance systems with elaborate
VMS have become standard at large commercial facilities where a
single guard at a command post can supervise hundreds of cameras and
Securing the perimeter is an important and growing market for the large
commercial integrators but is also moving downstream to smaller facilities
and into smaller commercial applications. Adding an outdoor camera
to a commercial install is the norm. IP cameras and analytics becoming
increasingly common and backend improvements in VMS help in outdoor
applications. In contrast, outdoor protection for residential applications,
meaning single family homes, is still uncommon for mainstream customers
of home alarm systems. Outdoor solutions are too expensive, too complicated
to install, and too expensive to monitor to gain much traction.
Outdoor Perimeter Kit
Homeowners have longed for perimeter protection, but the options didn’t
make sense, to either the owner or the alarm dealer. While dealers can install
door and window contacts on every opening there is no warning of
someone trespassing or prowling outside; there is no alarm, siren or police
response until after the criminal is actually inside the dwelling. The
residential market requires the same perimeter protection as municipalities
and commercial property, but at a scale and cost that made sense.
Cumbersome installation and expensive monitoring barred the way to a
mass market residential perimeter system. New solutions built on wireless
installation and filtered monitoring have overcome these barriers and residential
perimeter security is now a point of differentiation to drive growth
and reduce attrition for alarm dealers. The opportunity is huge. All residential
accounts—internal residential customers as well as a competitor’s residential
accounts—every existing residential alarm customer is a prospect
for a stand-alone monitored perimeter protection kit.
The indoor alarm continues to secure indoor areas. The outdoor kit secures the perimeter as an entirely separate system with its own smartphone controls; incremental protection that works regardless of the current alarm provider.
The Central Station and monitoring revenue, recurring monthly revenue
(RMR), is crucial in the residential market. Monitoring is what delivers police
response in the event of a crime. Commercial integrators make their
living on selling/installing hardware and delivering a working system to
their clients. While these integrators collect their money and move on to
the next job, residential alarm dealers install a system and collect a monthly
fee for monitoring.
Professional monitoring is the differentiator between the “alarm business”
and the integrator.
Historically, integrators provided unmonitored outdoor products and
monitored alarms stayed indoors, not by choice but by necessity. Outdoor
sensors and devices are more active than indoor detectors. More can happen
outdoors and that means more false alarms to a Central Station. More
false alarms mean that outdoor monitoring costs are 5X higher (or more)
than typical indoor monitoring.
While it may work in certain commercial markets, expensive outdoor
monitoring costs kill the business model. The only residential option
was unmonitored surveillance cameras that do not deliver either police
response to the owner or RMR for the installer. The monitoring process
needed to evolve before dealers could provide outdoor residential protection
and filtered monitoring makes that happen.
“Filtered monitoring” is a new concept that enables the homeowner to
filter outdoor video alerts and only send real events to the central station
for response. Unless videos of the events are delivered to the homeowner
for review, it really is impossible to filter anything. Video sent to smartphones
and other mobile devices like iPads make this possible. This perimeter
system builds uses a smartphone as the control device for video alerts,
arm/disarm, and remote look-in to the battery-powered camera.
For the alarm dealer, there is no question that smartphone interactivity
creates stickier residential customers and reduces attrition. This
perimeter kit can be armed/disarmed from a smartphone independently
from the existing indoor alarm—as a separate layer of outdoor protection.
The perimeter system sends video alerts of activity directly to the
homeowner’s smartphone for immediate review. Filtered monitoring
means that after reviewing the video the owner decides what action to
take: disarm, ignore or dispatch.
Only after the owner pushes “dispatch” does the alarm and video clip
go to the central station for police response. Filtered monitoring eliminates
the excessive false alarms that drive up monitoring costs. Filtered monitoring
changes the business model. If the homeowner determines that police
response is necessary, a push on the “dispatch” button delivers the videos
to the central station where the operator becomes a virtual eyewitness of
the crime. The central station remains the crucial link that delivers priority
police response to actual crimes.
Filtered monitoring also expands the utility of the OMVs to deliver video
alerts that are not necessarily security related. Package deliveries, kids
returning home from school, the arrival of the lawn service personnel; the
homeowner can monitor activity and either “disarm” the system to prevent
additional alerts or “ignore” the alert to send it to the archive.
Dealers can add indoor detector/sensors for indoor alerts where the
battery powered devices can be placed inside the drawer with the jewelry
or other valuables, or inside the liquor cabinet or gun closet to generate a
video alert of any activity, not necessarily a burglary. Because most existing
indoor alarm systems are “blind” and not connected to cameras, the
perimeter system with filtered monitoring delivers another layer of value as
a bridge or transition for a dealer to move video verification indoors. Pushing
the “dispatch” button on an indoor alert still delivers priority police
response to a video verified alarm.
Adding an indoor layer is ideal in cities like Detroit and San Jose where police
only respond to verified alarms. Alarm dealers can leave the existing indoor
alarm intact and add a separate layer of verified protection indoors and out.
To be practical, perimeter security must be wireless. If we only consider
alarm systems, 90 percent of new residential installs are exclusively wireless.
Wireless installation was responsible for expanding the residential
alarm market from a 5 percent penetration of wired systems in expensive
homes to 20 percent penetration and growing. The residential business
model depends on efficient installation and wireless delivers higher margins
with less disruption in the home.
“Wireless” here means no cables and battery powered, not Wi-Fi, because
Wi-Fi needs power cables. After resolving the monitoring issues,
wires and cables are the main reasons perimeter protection isn’t workable
in mainstream residential. Technology improves and wireless options now
exist. A new generation of wireless outdoor sensor/cameras called Outdoor
MotionViewers (OMVs) create a battery-powered outdoor ecosystem that
works for residential applications. A color video camera, infrared illuminators
for true night vision and PIR detector all fit into a waterproof device
the size of a coffee cup.
In contrast to a Wi-Fi camera, the OMV really has no wires; and radio
inside has better range. Like the 900 MHz first responder radios that still
communicate when a police officer enters a structure, the OMV uses 900
MHz to penetrate through walls from the perimeter outside. The detector/
camera can operate several years on four lithium AA batteries, depending
on duty cycle. A narrow “vertical curtain” pattern on the PIR motion
sensor minimizes needless activations and limits the detection area for
residential applications such as front door/back door, deck, outside pool,
detached garage, and perimeter hot spots.
Obviously, when it comes to police response, faster really is better. The arrest
rate on the typical indoor alarm is 0.04 percent. Beyond attempting to
contact a few people on a call list, there was little a central station could do
to confirm if an alarm was an actual crime or not.
These alarms receive priority 3 police response because even after the
central station works the call list, over 95 percent are still false alarms. Video
verified alarms, and especially video alarms with filtered monitoring,
change the entire paradigm.
Monitored video verified alarms receive priority 1 response and deliver
more arrests. Once the owner pushes the “dispatch” button and the operator
sees the video, filtered monitoring means police treat this call from the
central station as a crime-in-progress. Video verified alarms have documented
arrest rates in double digits and arrests remain the best deterrent.
Moving this outside only makes sense.
This article originally appeared in the April 2015 issue of Security Today.