February 14, 2012
Home Monitoring a Bright Spot for MVPDs
By Kaylee Hultgren
As recent home security product launches from Time Warner Cable, Comcast, AT&T and Verizon indicate, home security has become an emerging business for MVPDs. For instance, Comcast’s Xfinity Home Security (soon to be renamed Xfinity Home) offers police and fire alarm safety features to about a dozen markets where it’s currently available. But it also provides a network to manage home devices, such as lights and thermostats, as well as a touchscreen monitoring panel with access to live streaming videos from wireless cameras—all from your smartphone, if you’ve downloaded the app. Sophisticated stuff, and a bright spot for cable operators. CableFAX spoke with Bill Horrocks, VP of Product Management, Security for New Businesses at Comcast, about the strategy behind entering the home security services market, the process of getting it up and running and where it’s headed next.
What are the regulatory hurdles for installing home security systems? And what challenges do they present?
It’s a state-by-state, municipality-by-municipality set of regulatory requirements. In some states you have to be licensed to do installs, and in other states you have to be licensed in sales and installs. And those licensing requirements can vary, from being fingerprinted and [asked to] fill out an application, to actually [doing] two days worth of mandatory training. On the technical side, in some states there are QA requirements. A quality assurance person who’s got lots of industry experience behind him maintains the quality and follow the state or local regulations.
There are other regulations for fire. For example, in Texas you have to submit something that looks like a system plan—that has to be approved and then inspected once it’s installed. Local permitting requirements are required in a lot of cases. We’re working with most of the municipalities [to create] mechanisms that are operationally scalable for us and also meet the local requirements. In some states, like Pennsylvania, when you do any work in the home, you have to be a licensed contractor. It doesn’t really matter what you’re doing—you have to be registered with the state. In Texas, in order for a third party to install a thermostat, you have to be a licensed HVAC technician—which is not insignificant. It’s similar to being a licensed electrician.
So the primary investment up front is training?
It’s certainly time-consuming and requires taking people out of their roles as call center rep or as an installer or service tech to be trained. So obviously there’s a cost associated with that. For the most part, the capital is all success-based. We’re riding over our existing infrastructure and using our existing operational capacities in order to be able to deliver the service. It’s about trying to get the operations capable of servicing and installing this new platform. There’s really no other cost—no network preparedness. Even though it is a broadband service, it can ride right on top of our high-speed data service.
Have you hired new staff, or are you just training current reps?
We hired folks depending on where we needed particular expertise—a lot of regulatory compliance folks. We brought in some in the field and some at the corporate headquarters. We brought those resources in to make sure we were complying across the board.
Is the actual installation similar to cable? Will customer service be affected?
It leverages the skills of our high-speed data techs, so if you can do a triple play install you can most likely do a security install. There are networking technologies used on the platform, and it’s wireless, so most of our techs are very familiar with connecting devices into the home network. It was actually a fairly straightforward transition for us to train these folks in the installation and support of home security. We also use contractors—the same contractors that do our triple play installs are supporting us in the home security business.
What’s your target market? Just existing subs?
We’re certainly targeting our existing customers, but we’re also looking at new customer acquisitions. Sell-in for home security is at move time, since it’s a life change event. Traditionally, home security has gotten most of their customers on a move event, so when we transfer a customer either within our footprint or from outside of our footprint, we look at that as a great opportunity to offer our home security.
A lot of MSOs are getting into home security. Why is it important to operators?
Home security is important to us for a couple of reasons. One is that it’s a service that homeowners are familiar with. It’s something that doesn’t take much explanation as, for example, a home automation and control solution does. So it’s important that there’s a base there, an existing market—and there’s an opportunity to leverage that knowledge. It’s also something that we think is the hardest part of this equation to do. Our objective is to get out there and do this well, and we can always add a lot of services and capabilities onto the platform. So let’s establish ourselves as a home security player and do a really good job of delivering that service—and then work our way up from there.
What else besides training and regulations makes it difficult?
You have more requirements. There are UL listings [for security standards compliance] for the devices, and it has to be installed in a manner that’s appropriate for a life safety system. The robustness and reliability of the system has to be a lot more reliable than say, a home webcam solution or thermostat remote control. So we built the robustness into the core of the platform, which will only make anything we add on top of it that much better.
We are in the process of changing our name from Xfinity Home Security to Xfinity Home, and that plays into the whole view of ours—which is, this is a platform capable of a lot of services. But we did want to get in the market and establish home security as a core competency. While you’ll still see home security as kind of a key feature and capability of the solution, we’ll start to talk more and more about the control and video monitoring and energy management capabilities of the platform in all of our marketing and messaging.
Do you think home security is going to be a strong market for operators across the board?
I do. I think we bring a lot of new capabilities to an industry that’s really not changed much in the last 20 or 30 years. Our customers use their smartphones for a significant amount of interaction with the system. I think it’s by far the most used method of interacting with the system. A full smartphone app for iPhone and Android users allows them to have complete control. There’s a tremendous amount of capability here and so much more value for a similar price point to a traditional security system.