The cable industry has entered the Smart Home business in a big way, especially in home monitoring and security. Cable operators already have existing relationships with consumers and capabilities in home technologies. However, many have traditionally not been in the business of producing Smart Home products and services themselves, and will continue to rely upon strategic partners to build a full service offering with compatible and innovative solutions.
With their own branded Smart Home solutions, cable operators have a great opportunity to enhance existing and future customer relationships and increase ARPU by offering a diverse menu of value-driven, subscription-based service offerings.
While few services beyond security have yet to emerge that command monthly payments, expectations for a smarter future remain high. According to a Smart Home survey by Coldwell Banker, some 60% of Americans think that for a home to be considered smart, it needs at least three categories of smart products – and most said buying their first Smart Home product made them more likely to buy another one.
So how do cable operators monetize the Smart Home? Here are several service model strategies that should be considered:
-Professional Monitoring. While a primary service of a Smart Home solution, there is great opportunity for cable operators to generate additional ARPU by offering premium levels of on-demand, 24x7 professional monitoring with options for both broadband/WiFi and cellular backup connections.
-Smart Home Analytics. Consumers are growing more accustomed to free apps, but by aggregating and processing the right kind of data from a unique combination of devices, a Smart Home-based analytics service could deliver insights, such as energy usage, valuable enough to warrant a monthly service fee.
-Home Services. Smart Home platforms that integrate with home repair and warranty providers could generate referral fees. The consumer problem is disaggregated providers with various levels of reliability, availability and specialization. Activation of a service provider could be automatic (triggered by events such as water detection) or homeowner directed.
-Home Energy Management. For a monthly service fee or a percentage of energy savings, the right kind of application could analyze data and recommend cost reductions, by changing behavior, automating certain on-site functions or recommending the replacement of inefficient appliances or devices.
-Basic Support. Cable operators should be a one-stop shop to assist customers with their respective Smart Home systems. While not a revenue-generating offering, basic support through a self-service portal, for example, will help keep customers engaged and educated on new features.
-Installation Services. This presents a one-time revenue opportunity for any Smart Home brand or existing team of field technicians with the right skills to support non-DIY customers and/or deploy new devices that traditional installers (HVAC technicians, for example) may not support. A state-of-the-art app could allow customers to select products, and schedule and manage installation times.
-Concierge Support. This service would enable the set-up, support and repair of products and services. Possibly overlapping with support for in-home WiFi networking from other service providers, the value proposition is peace of mind. Business models include recurring monthly fees with all incidents covered or per-incident models with a deductible charged for every incident.
-Cyber-Security. Related to professional monitoring, operators should seriously consider this valuable revenue-generating service to help protect customers’ home networks from intrusion from hackers.
The time is right for cable operators to assess various home management strategies that go beyond a single device and its related application. By framing Smart Home products and solutions within the context of these complementary strategies, cable operators are more likely to position them as high-value services, sustainable over time.
Kevin Garton is Chief Marketing Officer at Zonoff, a company that provides an enterprise-scale consumer IoT platform.