24/7 video recording is the top reason to purchase a subscription
According to the latest Home Automation Ownership & Usage Report from NPD’s Connected Intelligence, 41% of consumers who purchased security cameras, security systems, or smart doorbells at retail choose to pay for a subscription service to access premium features. With unit sales of these products expected to grow nearly 20% through 2023, according to NPD’s Future of Tech report, this creates an opportunity for smart home manufacturers to appeal to consumers for supplemental revenue.
NPD’s latest data reveals that consumers who purchase these subscription service plans after buying their devices at retail are often individuals under the age of 35, who have a household income over $100K, are more likely to have young children, and are also more likely than non-subscribers to live in multi-unit buildings or townhomes. Additionally, subscribers are more invested in smart home technology, with 41% owning five or more different types of smart home devices, while only 25% of non-subscribers do.
“Smart home subscription services have long been seen as a path to profitability for smart home manufacturers, but creating offerings that are appealing to consumers – from both a features and financials standpoint – will be key to creating a loyal base,” said Jill Aldort, director, industry analyst for The NPD Group.
Of the consumers who subscribe to these services, 29% reported that 24/7 continuous video recording (CVR) is the most compelling reason to pay these additional fees. This is nearly double the 16% of respondents that cite access to an extended history of video clips as the top reason.
“Features like CVR have become a competitive differentiator for brands, as have packages that offer coverage for multiple devices, rather than paying a fee for each device,” noted Aldort. “Monetizing beyond hardware sales is important for manufacturers, especially as smaller tier brands gain traction in the marketplace and pressure leading brands to rethink their product and pricing strategies.”
The NPD Group Connected Intelligence Home Automation Ownership & Usage Survey is based on consumer panel research that reaches over 5,000 U.S. consumers, aged 18+ from diverse regions and demographical backgrounds. The survey was fielded between March 17 – March 31, 2021.
NPD’s Future of Tech Report is based on forecasted sales of technology products captured in The NPD Group Retail Tracking Service point-of-sale data.
About Connected Intelligence
Connected Intelligence provides competitive intelligence and insight on the rapidly evolving consumer’s connected environment. The service focuses on the three core components of the connected market: the device, the broadband access that provides the connectivity and the content that drives consumer behavior. These three pillars of the connected ecosystem are analyzed through a comprehensive review of what is available, adopted, and consumed by the customer, as well as reviewing how the market will evolve over time and what the various vendors can do to best position themselves in this evolving market. For more information: http://www.connected-intelligence.com.