Study: Monitoring Fees Drive 75% of Resi Alarm Revenue

According to Parks Associates, 75 percent of the revenue in the residential security industry comes from monitoring fees, not installation fees.

That's a little more evidence for those integrators who still don't see the value of recurring monthly revenue.

"Parks Home Systems: Home Security Update" says account attrition has only been nominally affected by the recession with a 4 percent to 8 percent increase in residential account cancellations.

CE Pro has been documenting the value of RMR to integrators in terms of cash flow and company valuation and the recession-proof nature of security.

The study also says:

• New residential security accounts will slow down dramatically due to the slowdown in housing starts
• A slight rise in monthly monitoring fees does not seem to affect subscribers

"A slight rise in monthly fees, such as from $25 to $26.95, will not cause current subscribers to abandon their services," says CEO Tricia Parks. "Security providers can use a minor fee increase to offset immediate losses due to slower market growth and increased competition. What is critical, nonetheless, is understanding the exact amount of increase that customers can bear."

Total U.S. Home Security Market Revenues