How Big Is Custom Installation Market?
CE Pro estimates residential custom installation market ranges from $5.7B to $12.1B, depending on how narrow you want to define integrator dealer base.
One of the most common questions we get asked at CE Pro (primarily by outside research entities and investment bankers) is: “What is the overall market size of the custom installation industry?” The straight answer is… ”We don’t exactly know.”
CE Pro has never done a true “CE industry market sizing study” of that sort. Indeed, the exact total revenue dollar figure for the industry would be nearly impossible to determine, especially since the custom installation channel is made of multiple types of installation contractors, from those centered around audio-video, electrical, security, homebuilding and even retailers with installation services. Remember, there isn’t even a government Standard Industrial Classification (SIC) code for the custom installation industry, so it’s not like you can just check with the IRS based on the tax returns from our market.
However, using recent data from the 2018 CE Pro State of the Industry Study and cross tabulating it with CE Pro’s overall subscriber base, we can create a “leap-of-faith” estimate by extrapolating medians across the entire market.
Here Is Our Estimate:
The median custom installation company had total revenues of $1,079,103 (equipment + labor + recurring revenue) in 2017. Most of those revenues came from equipment and installation labor (89 percent) while 11 percent came from recurring monthly revenue (RMR) sources.
Extrapolating that median across the total number of integration companies is the next step... and that is where it gets a bit tricky.
How many custom installation companies are there? Do you count security companies that also do A/V and home automation? Do you count electricians that also do low-voltage? Do you count homebuilders with installation divisions for A/V and control? What about retailers with installation operations?
If you count all those low-voltage markets, which CE Pro does for its audited publication and website, there are 11,245 separate executive managers of installing companies … and those are just the ones that subscribe to either print or online to CE Pro. That number is de-duped for companies that might be partnerships with multiple executive managers. Also, there are certainly integrators who may not subscribe to CE Pro, so the total number of low-voltage installation companies is likely even higher.
Using the 11,245 figure and the median revenue data puts the overall “CE Pro market” revenue size at $12,134,513,235 ($12 billion).
But what if you want to just count AV-centric integration companies only (excluding security dealers, electricians and others)… what some might defined as the more narrow “CEDIA channel” so to speak? That total number of CE Pro executive management companies is 5,268.
Using the 5,268 figureand the median revenue data puts the overall market revenue size at $5,684,714,604 ($5.7 billion).
Breaking Out by Product Category
The 2018 CE Pro State of the Industry Study also breaks down the market by equipment type, so we can also extrapolate total custom installation market size for the uber equipment categories: Of course, the data is based on sampling from our 2018 State of the Industry Study, which has 308 total respondents. I once heard a good joke in this regard: “If you don’t believe in sampling, the next you go to the doctor for a blood test, ask him to take all of your blood.”
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at [email protected]
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