Study: CCTV to continue rapid growth
Oct 1, 1999 12:00 PM
ACCESS CONTROL & SECURITY SYSTEMS INTEGRATION STAFF
In the past four years, the CCTV industry has doubled its size, reaching $1.3 billion in factory and service revenues in 1998. The industry will continue its rapid growth due to rising user demand, the Internet, non-security applications and lower product and communication costs, according to the 1999 Report on the Closed Circuit Television Market conducted by J.P. Freeman, Management Services Consultants, Newtown, Conn.
Video transmission is in the early stages of a transformation from what was "closed-circuit" to a mix of methods that will progressively widen into hard-wired, phone line, TV cable, and wireless link systems. These innovations will significantly expand user demand, new product opportunities and channels of distribution - and will expand the way in which other communications services are used.
EXPANDING CAMERA USE Small users are installing camera systems for the first time while large users are expanding their use of CCTV through digital systems that can be integrated with other security and non-security systems. The strong economy is permitting many large users to upgrade their legacy systems as stand-alone or integrated CCTV, access control and burglary systems.
Most product advancements are incremental rather than quantum leaps and are focused on the use of digital, microprocessor-based technology. Software control will become more commonplace in mid- to large-size CCTV systems. The value of high-resolution images will expand the use of broad band transmission media and standardized communications protocols. This, in turn, will drive the development of new products that can process, analyze, and store high-resolution video material for yet more advanced and efficient user applications that can identify individuals by their personal characteristics.
THE FUTURE IS NOW The high-tech future of the industry predicted in the 1995 Freeman CCTV report is now occurring. Advances in digital and communications technologies have produced a variety of innovations that have significantly expanded the potential uses of CCTV systems. High-capacity video transmission systems, wireless communication systems, Internet video communications, and new video storage and retrieval methods have expanded the use of CCTV systems with security and non-security systems.
While these innovations have been created by video products companies of all sizes, a number of them have arrived from manufacturers whose revenues are concentrated more in the consumer market than in the commercial CCTV industry. Indeed, many commercial video innovations can be traced to developmental work conducted by these large corporations to expand their consumer businesses.
The 1999 report reveals the beginnings of market overlap between what had been strictly commercial CCTV products for security purposes and the consumer market for filming, recreation and family archiving purposes. It also reveals the rapid rise in importance of the integrated systems sector of the commercial marketplace. While digital and communications technologies have enabled these advances and have virtually guaranteed a continuing stream of system innovations into the foreseeable future, an important market factor remains unaddressed: For true integration compatibility to occur in the marketplace, supplier partnering among CCTV and access control companies has to grow.
DIGITAL'S IMPACT The advent of digital technology has substantially changed the value orientation of the CCTV business through the efficiencies that the technology enables. Faster production cycles, miniaturization, interoperable signal compatibility, higher levels of environmental endurance, and greater reliability are all now available to the user through the application of digital technology to new CCTV products.
In addition to these improvements in product attributes, one of the greatest contributions that digital technology makes to the marketplace is the economics of CCTV purchases. Systems are now more affordable than ever through price reductions across many product lines and higher levels of functionality in many new products.
Cameras are driving the CCTV industry in terms of a growing share of industry sales. As rapidly as the camera category is growing in revenues, unit sales are growing even faster due to lower costs and price reductions.
Beyond widening desire that so many commercial, institutional, and industrial organizations have for video systems to monitor and control events, the sheer economic attractiveness and versatility of CCTV systems will drive the growing demand ever higher.
A somewhat parallel development exists in the mechanical and electronic markets that comprise the access control industry. Recognizing that their hardware industry is "going electronic," large mechanical lock companies have begun to acquire electronic door hardware control companies.
Looking into the future, these mergers facilitate the integrated system partnering problem at the portal level, since mechanical and electronic access control companies can become single "almost one-stop-shop" suppliers. The way that CCTV companies cope with this simplification process at the field level, however, has not yet become clear.
Access control manufacturers tend to be smaller firms relative to video companies and hardware companies. They could represent the "companies in the middle," i.e. the next round of companies to be acquired as part of the overall consolidation now reshaping the security industry. Which kind of company acquires them - CCTV or hardware - will have a great deal to do with the efficiency of marketplace partnering to serve the demand for integrated CCTV systems.