For decades Parks Associates has tracked adoption of home systems and security systems. Recently we changed the way we asked about security solutions given the major entrance of DIY solutions changing the market dynamics. Ultimately, the market is expanding. Our view we believe reflects a more accurate portrayal of the market, especially in looking at the growth of the market.

Parks Associates' most recent update of its Residential Security Tracker assesses the residential security market, offering insights on security players' expansion into the MDU market and the latest trends and industry news.

Home security has been dominated by professional security providers for years, with robust system offerings. As smart home devices have entered the market, the players have changed offerings and strategies to meet new demand, and introduce new solutions at different price points, installation options, and monitoring offerings.

At year-end 2021, Parks Associates research shows that 34-36% of US internet households or approximately 38 million internet households own a home security system, up from 26% in Q4 2016.

In addition to the coming of age for DIY systems, recent introductions of professional monitoring for self-installed single-category devices provide consumers new options and new competition for traditional security companies. These single devices are used as follows:

• Add-ons to professionally installed and monitored systems
• Add-ons to professionally installed but self-monitored systems
• Self-installed systems or devices that are professionally monitored
• Self-installed systems that are self-monitored
• Self-installed standalone devices that are self-monitored
• Self-installed standalone devices that optionally work with other devices or systems

Consumers now have a wide array of choices along the spectrum of self vs. professional installation, self vs. professional monitoring, number and choice in different types of safety and security devices, and pricing bundles that best suit their needs. Smart home devices and other adjacent categories create new onboarding ramps for both professional and DIY subscription security services.

The short- and long-term growth forecast for the residential security market depends upon multiple factors:

• Residual impact of COVID-19 and views of “safe enough”
• Increased use of interactive services
• Diversified mix of professional monitoring services
• Success in expanding market via innovative services and video analytics

In Q2 2022, consumer research featured in the Residential Security Tracker reveals that nearly 40% of US internet households reported owning some security solution, such as a home security system, networked cameras, or a video doorbell. Seven percent of US internet households, approximately seven million households, own a network camera or video doorbell but no security system.

Together, these smart home products add to the market for security solutions, as millions of households find a camera solution is 'safe enough' for their needs. The current market for residential security solutions is a mix of devices, systems, installation methods, and attached services that offer consumers more choice than ever before.

In the firm's July 2022 survey, Parks Associates expanded its definition of home security services to better capture fee-based self-monitoring and video storage services. Thirty-one percent of internet households reported owning a security system, and 18% of US internet households reported subscribing to a professional monitoring service.

Parks Associates research captures substantially more fee-based self-monitored households than prior survey findings and is in line with our current view of the market. Installation trends continue to hold where self-installed systems and pro-installed systems account for a similar portion of the market.

Security solutions have enjoyed high demand, even under the economic uncertainty of the pandemic, but it's unclear if growth will continue with higher pricing and tighter consumer wallets. After a spike in DIY installation during COVID-19 shutdowns, professional installation rebounded to its current rate. However, price hikes for security monitoring may impact adoption rates throughout the rest of 2022 or shift market share to less costly competitors.

For more information on Parks Associates research, visit www.parksassociates.com Thanks for your support of our research. Reach out to me directly for questions about our services: we would love to be your business intelligence provider of choice. Reach me at eparks@parksassociates.com

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