Issue link: https://read.dmtmag.com/i/31501
SECURITY SYSTEMS NEWS APRIL 2011 www.securitysystemsnews.com their accounts. Furthermore, the wholesale monitoring business is controlled by fewer than 100 companies, and about 50 percent of the accounts are held by the top five wholesale monitoring companies. “This meant that this relatively small universe of monitoring companies had an incredibly detailed view on the year-over- year activity of the half of the market that was most difficult to survey accurately,” Barnes said. The survey asked wholesale monitoring companies for the total number of accounts monitored and the number of alarm com- panies served from 2007-2010. Virtually all of the large players and many of the smaller ones participated in the study. “We were able to get insight into millions of accounts associated with approximately eight thousand alarm compa- nies, and were even able to fine tune the results for such events as APX (now Vivint) moving from utilizing whole- sale monitoring services to operating their own central station,” Barnes said. is also probably a bit conservative as there are strong indications that average RMR per account was up slightly during this period,” Barnes said. Adding in the reported results of the larg- Acadian Monitoring operations director Kenny Savoie The results clearly showed “the total number of monitored systems was up by approximately 6 percent over the last two years. This is about as good of a proxy for RMR and related service revenues as one can get for this huge slice of the industry. It est companies and applying that rate to their share of the market yields an overall indus- try growth rate of approximately 8 percent over the last two years, Barnes said. Only the percentages are being published this year. An agreement with participants to release rolled-up gross numbers is expected to be in place for the 2012 study. Kenny Savoie, director of operations at Acadian Monitoring, a network of four UL-listed central stations, said Acadian has noticed that “while some areas of the country have a slightly higher attrition rate due to the economy, other regional areas, like the Gulf south, are com- pensating for that loss and our net gains are balanced with our bud- geting forecasting. In addition, being diverse, with the ability to offer a variety of monitoring solutions, puts us in a unique position that we can now assist many more dealers with an array of new RMR streams.” What Savoie has heard from dealers “is that their credit lines have shrunk and they are now having to refocus on their business model, along with some of the smaller deal- ers being forced to sell some accounts just to stay in business, but overall we continue to see net gains of both organic and inorganic account growths.” The percentages reported in the Barnes/SSN study ring true to both Savoie and Josh Garner of AvantGuard Monitoring, which has two hot-redundant central stations and monitors 110,000 accounts for more than 300 deal- ers. “As a wholesale central sta- tion our growth comes from two sources,” Garner said. “Growth from existing dealers, and growth from capturing more market share—dealers switching from another central station to us. If we just look at the growth from our existing dealers, then these numbers indeed ring true, and may be a bit on the conservative side.” Savoie said he’s heard from dealer and integrator partners about various peaks and valleys over the past two years, but there was no single time period where everyone was experiencing a downturn or an upturn. Savoie believes that one reason for SPECIAL REPORT 29 Josh Garner new margins that dramatically affect his RMR, yet he did not have to move any gear to make more money,” and hosted services in general, which he said are an easier sale for dealers “since there is no need for the end user to invest in software, hardware, PC’s, servers, DVRs. They just pay a monthly service fee.” Savoie and Garner both said the statistics generated by this study are useful to wholesale monitoring companies and the industry in general, and the rolled-up numbers that will likely be available from the 2012 study will be useful as well. “Our business is predicated on RMR and the [Barnes Associates/SSN] statistics basically verify that our business model works,” Savoie said. increased RMR at the same time that sales and installations decreased is that many dealers are offering new technologies and services that allow them to realize new RMR streams without having to install new equip- ment. He said Acadian has seen “tremen- dous growth in remote video monitoring,” where the dealers can “achieve significant Garner pointed out that the wholesale monitoring industry has not previously had a good mechanism to report growth trends. “We’ve pretty much been in the dark, or had to guess as to how we measure up to industry averages. So this kind of data is incredibly help- ful. It helps us know how we’re performing in relation to the rest of the industry,” he said. Garner said he’s looking forward to seeing additional information in the 2012 study. “I cannot see the risk in sharing rolled-up numbers. If anything I think it helps raise awareness of the wholesale segment. I imagine investors and bankers would find this kind of data very helpful.” SSN Wright Brothers First Flight, NC—1903 Vision is the ability to see today what will be taken for granted tomorrow. —Anonymous IT TAKES VISION. In 2000, Alarm.com started developing the first interactive services for the security industry. Today, with thousands of authorized dealers, hundreds of thousands of customers and billions of messages delivered, Alarm.com is the industry leader in interactive services. Partner with the company who has the vision for the future. Visit www.alarm.com to learn more. Stay Secure. Stay Connected. © 2011 Alarm.com. All rights reserved.