DirecTV will join the fragmented field of home security and automation services through the acquisition of Langhorne, Pa.-based LifeShield Security.
DirecTV spokesman Robert Mercer confirmed media reports saying that DirecTV plans to start marketing home security and automation services based on LifeShield’s platform to new customers by the first quarter of 2014. DirecTV isn't disclosing financial terms.
"With the acquisition, we'll be able integrate home security into the DIRECTV video experience, and with our national footprint, network of technicians and dealers, along with our marketing expertise, we see a significant opportunity to grow the business in this largely under-penetrated market; and create a strong value proposition for our customers and an incremental revenue stream to supplement our core residential business," Mercer said, in an emailed statement.
LifeShield, formerly known as InGrid, is focused on self-installed, wireless-based home security and automation systems. LifeShield's most popular package, the its Home Essential Kit, runs $34.99 per month and includes additional fire, carbon monoxide, and environmental (flood, freezing) monitoring, according to the company's product lineup. LifeShield CEO Mike Hagan will continue to run the security arm and report to DirecTV SVP Brad Bentley, according to Security Systems News.
The acquisition plunges DirecTV into a market that is also being pursued by a growing number of video service providers, including Comcast, Time Warner Cable, Cox Communications, AT&T and Verizon.
They are all adding home security and automation components as they seek out a new high-margin, revenue stream and a service layer that is viewed as both a churn reducer and an upsell opportunity. On Tuesday, TWC announced it would have its service, called IntelligentHome, deployed to 90% of its footprint by year-end following rollouts in Ohio and Wisconsin this month and in New York City this fall.
About 20% of U.S. homes currently use a home security service, led by ADT’s 28% share of the market, ISI Group said in a recent report. ISI estimated that Comcast, TWC, AT&T and Verizon could generate about $3.5 billion from home security/automation services if they were able to achieve a 5% service penetration rate over a five-year period. In a “blue-sky scenario,” ISI said the overall market could be worth $38.5 billion if the entire U.S. broadband subscriber base (80.3 million) subscribed to a standard level of home security, monitoring and automation services.
