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Good news for security companies: Cable Guy’s customer service ratings fall to new lows

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Wednesday, May 21, 2014

Professional security companies proudly point to the good service they give consumers as an important differentiator between them and their giant cableco and telecom competitors. And a new consumer satisfaction survey suggests they don’t have to worry about losing that edge to the Cable Guy anytime soon—because it shows new dips for Time Warner Cable and Comcast, and AT&T and DIRECTV don’t fare too well, either.

The American Customer Satisfaction Index released its annual measure of the communications industries this week. The ACSI report measures consumer satisfaction in such categories as Internet service providers (ISPs), subscription TV service, fixed-line and wireless telephone service, computer software and cellphones, according to a news release. Ratings are done on a 100-point scale.

“Customer satisfaction is deteriorating for all of the largest pay TV providers. Viewers are much more dissatisfied with cable TV service than fiber optic and satellite service (60 vs. 68). Though both companies drop in customer satisfaction, DIRECTV (-4 percent) and AT&T (-3 percent) are tied for the lead with ACSI scores of 69. Verizon Communications FiOS (68) and DISH Network (67) follow.”

AT&T’s and DIRECTV’s dips in customer satisfaction are of particular note because I just wrote about how AT&T’s $48.5 billion plan to buy DIRECTV could impact Digital Life—AT&T home security/home automation offering—and the security industry.

Hmmm…a dip in customer satisfaction regarding any part of those companies’ businesses doesn’t seem like a positive—especially if they want to bundle services!

There’s also a $45 billion pending deal for Comcast to buy Time Warner Cable. Both of those companies have home security/home automation offerings but they’re not making customers very happy, at least when it comes to TV and Internet service, according to ACSI.

“Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5 percent to 60, while Time Warner registers the biggest loss and plunges 7 percent to 56, its lowest score to date,” the news release said.

The release also has a prepared statement from David VanAmburg, ACSI director: “Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories. Still, it's a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It's hard to see how combining two negatives will be a positive for consumers.”

Customers also aren’t happy with their Internet service from such providers, according to ACSI.

“High prices, slow data transmission and unreliable service drag satisfaction to record lows, as customers have few alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1 percent to 63, the lowest score in the Index, the release said.

“At an ACSI score of 71,Verizon's FiOS Internet service continues to lead the category, surpassing AT&T, CenturyLink and the aggregate of other smaller broadband providers, all at 65,” according to the release. “Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6 percent fall to 64. Customers rate Comcast (-8 percent to 57) and Time Warner Cable (-14 percent to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.”

However, customers are happy with their cellphones. That rating is “up for a second straight year, rising 2.6 percent to a new all-time high ACSI score of 78.”

The release said, “Steady growth in the use of smartphones, which have much higher levels of customer satisfaction, helps drive the overall industry gain. However, as data usage increases, costs to access overloaded networks are high, leaving customer satisfaction with wireless service providers stagnant at an ACSI score of 72.”

ACSI found that, “among wireless phone providers, Verizon Wireless separates from the pack after climbing 3 percent to 75. T-Mobile (69), Sprint (68) and AT&T Mobility (68) are tightly grouped behind. As smartphone adoption continues to grow, network demands increase along with costs to the consumer, each contributing to stagnant customer satisfaction.”

Also interesting were the ACSI POTS ratings. “Customer satisfaction with fixed-line telephone service dips 1.4 percent to an ACSI score of 73, but remains the most satisfying of all types of telecommunications. However, the score is due to shrinking landline usage. As more households abandon fixed-line service for cell phones, the customers that remain tend to be the most satisfied,” the release said.

AT&T to buy DIRECTV for $48.5b

Analysts: Deal could result in potential monitoring synergies, bundling opportunities
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05/19/2014

DALLAS, Texas and EL SEGUNDO, Calif.—AT&T plans to buy DIRECTV for $48.5 billion, the companies announced this week. The deal will allow AT&T to expand its broadband network to more than 70 million customer locations, the companies said.

Readers ponder effects of ADT small business strategy

Most readers say tailoring solutions to specific verticals is the way to go
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05/07/2014

YARMOUTH, Maine—When it comes to commercial business, an overwhelming majority of readers—90 percent—says it’s best to provide security solutions that are distinct from security and automation packages offered for the home.

Guardian brings in former central station leader at AT&T

Jason Bradley says ASAP to PSAP is 'high on the deployment list'
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04/28/2014

WARRENDALE, Pa.—Jason Bradley, the newly hired director of central station operations at Guardian Protection Services, was drawn to the company in part because of the management team’s vision of the central station as a centerpiece of its message to customers and dealers.

AT&T Digital Life expands to 75 markets in its first year

The telecom also offers free install and equipment for new customers and is touting its retail store strategy as it marks the first anniversary of the home security/home automation service
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04/24/2014

DALLAS—After launching one year ago, in April 2013, AT&T’s new home security/home automation service, Digital Life, has expanded across the nation to a total of 75 markets, the company recently announced.

Investor speculates on Monitronics outlook

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Wednesday, April 23, 2014

Greater visibility, broader market acceptance and (for some central stations) more wholesale monitoring accounts are just some of the benefits often mentioned in connection with the entrance of cablecos and telecoms into security.

A recent Wholesale Monitoring study by the Barnes Associates (co-sponsored by the CSAA and SSN) largely attributed the 19 percent growth the segment enjoyed in 2013 to the influence of the new entrants. To be sure, there seems to be a prevailing belief that the rangy, big-money advertising campaigns of such companies can be the proverbial “rising tide that lifts all boats.”

That’s not to say there’s no ambivalence. That was apparent enough in a recent SSN News Poll that dealt with the topic. A number of readers expressed concern about the long-term viability of smaller players in the home security space, given the influx of these major corporations who have already made inroads into the home through Internet and cable, and thus have that previously established “stickiness.”

That ambivalence was also reflected in a recent analysis by Rajiv Bhatia on Seeking Alpha, a crowdsourced platform for investment-based ideas, who discussed what the new market players could mean for Ascent Capital, the holding company of Monitronics. Bhatia acknowledged that the company faces “increased competition” from the large new cableco/telecom entrants, which he says are gaining traction despite unsuccessful forays into the market in the past.

Regarding Monitronics’ business model, Bhatia offered a mixture of encouraging and somewhat cautionary words:

“While management and sell-side analysts believe that Ascent is better insulated from competition via its dealer-only business model, Ascent faces upward pressure on the multiple it pays for its dealer contracts from competitors. Additionally, its growth through its internal channels is weakening.”

Those multiples, he noted earlier, are based on an RMR multiple of 50. Ascent faces “upward pressure on the multiple it pays to acquire contracts,” he said.

With more than 1 million subscribers, Monitronics trails only ADT in terms of marketshare in the alarm monitoring space. It will be interesting to watch what happens to the market presence of both companies as the cableco/telecom ads continue to appear on our television screens.

Security industry share of smart home market to be cut in half by 2019, report says

Early mover advantage that security companies now have will give way as telecoms, cablecos gain more market share, ABI Research says
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03/19/2014

NEW YORK—Monitored security companies will stay at the top of the U.S. managed smart home market for the next five years, but their market share will drop more than 50 percent by 2019 as competitors such as telecoms and cablecos leverage their own strengths in the space, predicts a new report from ABI Research.

AT&T awarded for innovation at Mobile World Congress

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03/06/2014

DALLAS—AT&T’s Digital Life scored an award at the Mobile World Congress, held in late February in Barcelona, Spain, the telecommunications company said in a Feb. 26 news release.

AT&T’s Digital Life starts 2014 with market expansion

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Wednesday, February 19, 2014

It hasn’t been a year yet since AT&T in April 2013 launched Digital Life, its home security/home automation product, but the telecom has lost no time in making the professionally monitored, professionally installed service available. As of this Friday, Digital Life will be available in a total of 63 markets around the nation.

The company will launch in four new markets that day: Albany, N.Y.; Dayton, Ohio; Grand Rapids, Mich.; and Wichita, Kan., according to an AT&T news release.

As of Feb. 21, customers in those markets can receive a live demonstration and buy Digital Life in company owned retail stores or make the purchase online. The company has 1,378 retail stores around the nation where the product is available, AT&T said.

The Dallas-based telecom had set a goal when it first launched Digital Life to have the service in 50 markets by the end of 2013, but surpassed that goal this past October.
And AT&T is predicting even more growth for Digital Life in 2014.

Kevin Petersen, president of Digital Life, said in a prepared statement: “This year is going to be exciting for AT&T Digital Life and the connected home industry. We’re going to expand our footprint and add features to the platform while being aggressive in the market to show customers how convenient it is to control your home with our easy-to-use technology.”

Also this year, the release said, “AT&T Digital Life joined the AllSeen Alliance, a nonprofit consortium dedicated to driving the widespread adoption of products, systems and services that support the Internet of Everything with an open, universal development framework supported by a vibrant ecosystem and thriving technical community. The alliance is a broad cross-industry consortium aimed at advancing adoption and innovation in the “Internet of Everything” in homes and industry.”

According to the news release, “AT&T Digital Life makes customers’ lives easier by simplifying the management of their home, offering security, convenience and peace of mind, in a customizable and easy-to-use experience from a smartphones, tablet or computer.”

Packages for Digital Life range from Simple Security, for $29.99 a month plus $149.99 for equipment, to Smart Security, for $39.99 a month plus $249.99 for equipment. Automation packages, such as camera or energy packages, can be added to the Smart Security for an additional monthly cost.

Digital Life, Imperial Capital join PPVAR

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Wednesday, January 15, 2014

Several organizations recently joined PPVAR’s growing membership roster, but two of the new additions are particularly striking. Digital Life, a home management platform from AT&T, is now on board, according to Keith Jentoft, an industry liaison for PPVAR. This comes about seven months after Digital Life earned CSAA Five Diamond certification.

Investment bank Imperial Capital also joined the organization. This is doubtless an interesting development as well, with Imperial being the organization's first member from the private investment side. In a certain sense, an investment bank showing interest in video verified monitoring seems unsurprising, given signs of the technology's more mainstream direction, plus the technology’s ability to drive higher average revenue returns per customer. Additionally, when a private investment bank allies itself with a best-practices organization, it suggests their interest in the value proposition runs fairly deep.

The group also added The Illinois Alarm Association and the Michigan Association of Police Chiefs as members—both organizations the likes of which we've become more accustomed to seeing engage with PPVAR, an organization focused on pooling knowledge from members in both public and private sectors.

As PPVAR forges ahead toward its goal of written standards for video verification, I’ll be keen to see what kind of bearings its new members have on the organization’s direction. Will the addition of Digital Life compel other cablecos and telecoms to join? And with respect to Imperial Capital, I’m curious to see what kind of role they play in promoting PPVAR’s cause. Will their membership generate further interest in video verification from other private investment groups?

The organization is convening in the coming days, Jentoft said. After they do, I hope to get a clearer picture of where the organization is at this stage of the process.

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