Growing Connection

Working with DIYers can provide another source of revenue, and make sure the job is done right

  • By Robert Ogle
  • Mar 01, 2016

The industry is starting to see a growing connection between existing home security and home automation providers and their DIY counterparts. Major security companies who have spent years building their brands are beginning to grow their businesses by acquiring or partnering with DIY providers and products.

At first, it seems counterintuitive that established “incumbent” companies would seek DIY acquisitions or partnerships. Along with powerful non-security players like Google, Samsung and Amazon, DIYers have traditionally set their sights on disrupting the security industry, offering security and smart-home solutions to customers who, for whatever reason, have traditionally been unwilling or unable to work with existing providers.

TALKING ABOUT DEALS

A number of deals in recent months show that existing security companies are firmly entertaining the notion that offering or integrating DIY alternatives can help grow their customer base and RMR. Monitronics Security was one of the first to recognize the trend with its purchase of LiveWatch in March 2015.

As a standalone subsidiary of Monitronics, LiveWatch sells a variety of wireless security and smart-home products direct to consumers under its Plug & Protect brand. The systems are ordered online, preconfigured, and sent to the customers. They “install” and activate the systems, and Live- Watch is available for support and advice.

Unlike many other DIY systems, LiveWatch offers live around-the-clock monitoring as well as self-monitoring alerts to mobile devices and emergency contacts using its proprietary ASAPer service.

Jeffery Gardner took the reins as CEO of Monitronics in September 2015, and quickly understood the importance of LiveWatch as part of a broad spectrum of customer options. On one hand, Monitronics has always had a robust dealer program in which integrators can offer products and services from a wide selection of well-known brands. LiveWatch covers the other side: People who want protection and home automation without going through a traditional dealer.

“It’s a good time to be in that space,” Gardner said. “Our industry is evolving so fast that there’s not a lot of time to ride the status quo. Live- Watch gives us a foothold and a strong engine for growth in the DIY market, and it’s always better to be the disruptor than the disrupted. We have to be able to lead change in the industry instead of just reacting to it.”

GOING LIVE

LiveWatch is separate from Monitronics’ dealer network, and Gardner is quick to underscore the network’s importance. “As things evolve, I’m very committed to our dealer program,” he said. “Regardless of anything we do to change Monitronics, it’s not going to get in the way of building a stronger dealer program. That’s been the foundation of this company for a long time, and we’re not going to lose sight of that as we plan for the future.”

Another game-changer for security industry incumbents has been the evolution of DIY technology as well as the involvement of larger companies who are getting involved. DIY had been largely available through a couple of big box chains and a scattered selection of devices and ideas, financed either through venture capital or through crowdfunding websites like Kickstarter and Indiegogo.

Google’s purchase of Nest in January 2014 for $3.2 billion marked a huge turning point in that paradigm, increasing the sense of urgency for other major brands to keep up. Now we’re seeing all sorts of strategic alliances, most recently between alarm.com and Apple; alarm.com and Amazon; Samsung and LG (which is going heavily into the DIY market), Panasonic and Honeywell, and (of course) Nest with a growing list of new partners and distributors, including energy companies.

Now the word is out: Whether it’s established security providers or huge companies that are competing for the high ground in home automation and security, ignore the DIY concept at your own peril.

“Monitronics is a good business, and it’s easy to say that we shouldn’t change things and that everything’s fine,” Gardner said. “But you have to be innovative and you have to adapt to the marketplace. That’s why the best companies today are very good about constantly evolving faster than the competitive environment that’s evolving around them.”

This article originally appeared in the March 2016 issue of Security Today.

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