Comcast expands into home security biz

Comcast is getting into the home security business.

The company plans to announce tomorrow that it's expanding its Xfinity Home Security service. Last year the company began testing the service in Houston. Now it's adding six more cities. Additional cities that will get the new service include parts of Philadelphia; Portland, Ore.; Jacksonville, Fla.; Sarasota/Naples, Fla.; Chattanooga, Tenn.; and Nashville.

The Xfinity Home Security service offers traditional home security features, such as police and fire alarm protection with 24-hour monitoring. It also offers some home automation functions, such as the ability to adjust thermostats and lights remotely. And when people are not home, they can also watch live video streams from wireless cameras that are positioned in and around their home.

The technology behind the system is slightly different from traditional home security systems from companies, such as ADT. The Comcast Xfinity Home Security system works over a broadband connection rather than a phone connection. And as a result it's able to offer the video service and remote management. The company uses cellular networks as a back up to the broadband connectivity to ensure uptime.

The home security market is worth about $8 billion annually, according to Parks Associates. Comcast executive Mitch Bowling wouldn't say how big he expects the new home security business to be for Comcast in particular. But he said that Comcast sees it as its fourth anchor business, alongside cable TV, broadband, and voice services. That said, the company doesn't expect to sell Xfinity Home Security as part of a quadruple play bundle.

Instead, Bowling said Comcast sees the business as an opportunity to expand its business into areas that are adjacent to its existing core businesses. A good idea considering that Comcast, like other cable operators, has been losing basic cable TV subscribers. In the first quarter that ended in March, Comcast reported it had lost 39,000 basic cable subscribers, bringing its TV subscriber total to 22.6 million.

Bowling said only a fraction of the company's customer base today already uses a home security system. He hopes that Comcast can win over these customers. But he also believes the company can expand the business and win new customers, who may not consider traditional home security systems.

"We are targeting existing home security customers," he said. "But we're also looking to expand the market."

Bowling said that it's too soon to talk about penetration rates. But in Houston, where the service has been available for almost a year, 50 percent of its sales have been to existing home security customers switching to the Comcast service. And the other 50 percent have been customers, who have never had a home security system.

Bowling believes that the system will appeal to people interested in conserving energy as well as gadget-savvy people who just want more control of what happens in their homes when they aren't around.

The service costs $39.95 per month. This price includes a touch-screen control device, four window/door sensors, and a key chain remote control. Additional monitors can be purchased.

Customers can also get a free iPhone and iPad app that allows them to access the features remotely, including the video stream. The touch-screen control panel that comes with the service not only allows for the service to be managed, but it also includes widgets to get the latest weather, news, traffic, and sports scores.

Customers can customize the settings for the service to receive e-mails or text message alerts based on certain events. For example, if a parent expects her children to come home from school between 3:15 p.m. and 3:45 p.m., she can write a rule that the system sends her a text alert if the front door is not opened sometime in that time period.

Comcast is requiring all customers signing up for the service to agree to a three-year contract. The early termination fee starts at $1,110 and is prorated after every quarter.