Video Analytics to be $1 Billion in 2012

•Published Dec 19, 2009 00:00 AM

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An extremely bullish but wildly misleading projection for the video analytics market has been made. V/B Research claims that video analytics will generate more than $1 Billion in 2012 revenue up from an estimated $556 Million in 2009. Of course, this analysis counts all revenue from products running video analytics - meaning a DVR with two channels of perimeter detection is counted for $5,000 or $7,000 rather than the $500 - $700 the analytics alone cost. Likewise, this would make a Pelco Sarix running ObjectVideo count for $1500 rather than the $300 premium the OV enabled Sarix camera has over the non-video analytic version.

The upside is that if you want a 3rd party to provide a big number justifying video analytics growth and size, now you have one from V/B Research [link no longer available].

On the other hand, there are some other obvious and important flaws in V/B analysis:

V/B claims that OV and ioimage believed that retail would be a big adopter despite ioimage not even having a retail video analytic solution. While OV does offer retail oriented analytics, OV has continuously been clear that security has and is their major market.
V/B cites Southwest Florida International Airport claiming a 5 month ROI on their video analytic systems as proof of 'real ROI'. However, this airport's use is a niche case involving wrong way exit monitoring [link no longer available]. While this may be a solid application, it is incredibly narrow and only applicable where regulations apply to controlled movements in indoor areas. This shows nothing about the use in the more commonly desired outdoor perimeter scenario.

The one point we do agree with is that video analytic only providers have shifted into selling 'solutions' or bundles of cameras plus analytics or DVRs plus analytics. While this may be the best option for video analytic startups currently, it is a reflection of a failure to succeed at the primary and initial strategy rather than the ideal market approach. Video analytics manufacturers moving into the DVR or camera market now need to compete head to head against establish incumbents with only minor differentiation from their analytics.

[Update 2012: Video analytics growth has been poor over the last 3 years, with more companies exiting the market then entering it.]