How Competitive is Megapixel Against Analog Cameras?

By: John Honovich, Published on Nov 19, 2010

If analog is to be replaced, IP must provide superior value across the market. Historically, that has not been the case. While most believe that higher resolution is the key driver from analog to IP, megapixel's price premium has been quite substantial.

In this note, we look at the current competitiveness of megapixel vs HD and how that has changed since 2008. In less 3 years, the competitive positioning has changed dramatically. The value of megapixel is surging due to declining product and system costs plus improved offerings.

Let's start with 2008 where megapixel, beyond niche applications, was hard to justify. In our July 2008 article on the Top 5 Problems of IP Cameras, we noted how even SD IP cameras were twice as expensive as analog and how megapixel storage was a significant problem (only MJPEG at that time). With MJPEG, storage costs could easily run $300-$500 more per camera. Equally concerning, megapixel cameras at that time where even more expensive with a price range of $700 - $900 or higher (online pricing). Finally, with only a dozen or so manufacturers, megapixel camera supply was quite constrained.

In 2008, the megapixel premium over analog was about $600 - $1000 per camera. That's a huge amount of money that is hard to justify unless you (a) really needed to replace multiple cameras in a single location or (b) were extremely demanding on your image quality needs. Both of these were niche applications. This was reflected in a relatively small global market size of about $100 Million USD.

Now, in 2010, the market is likely 400% larger than it was in 2008 - doubling each of the past two years.

Megapixel's improved competitiveness in less than 3 years is nothing short of staggering:

  • H.264 is the norm now (with MJPEG only cameras becoming rare)
  • $300 - $500 online pricing for megapixel cameras is becoming quite common. There are now 50 megapixel cameras listed for under $500 in our Camera Finder.
  • The number of suppliers has at least quadrupled with literally every camera manufacturer around the world now offering megapixel
  • Storage prices dropped in half or more; Though expected, still a benefit to megapixel

Because of these changes, the premium of megapixel over analog is now about $150 - $200 per camera. Here's a straightforward example:

Sony's recently introduced 1.3MP box camera (the SNC-CH120) has an online price of about $460 (including lens). The equivalent form factor/imaging from Sony's analog lineup is the SSCE453 which has an online price of about $150 [link no longer available] (add a lens for $50) - total price about $200. With analog, encoding must be done separately. Using the most cost effective option, a DVR, the cost will be about $125 per camera (the premium of a DVR with an analog encoder card over an NVR appliance). 1.3MP runs $460 vs SD analog at $325, a premium for megapixel of $135. Add in the additional cost of storage (about $50 given H.264 and lower hard drive costs today) and the total premium is under $200.

Optionally, if you choose to use a NAS like QNAP or Synology or Milestone Essential at $50 per channel plus a COTS PC, the premium of megapixel over analog would drop further (under $100 per camera).

The economics will work similarly with many of the other sub $500 megapixel cameras. The competitiveness is accelerating as many of the Fall 2010 releases feature low cost cameras - such as the Arecont H.264 compact cameras, the Avigilon H.264 ONVIF cameras [link no longer available], HD domes from Grandstream, GVI and Vivotek, etc.

We've gone from a $600+ MP over analog premium in 2008 to a sub $200 premium of MP over analog in 2010.

First, this should make it easy to understand why megapixel adoption has surged. It is not primarily better education or more informed end users -- the products are simply much more competitive.

Second, we are reaching the point where justifying HD over analog gets pretty easy. When the total cost of a project nearly doubles (as it did in 2008), the market is fairly limited. When the total cost goes up only 20%, that's much easier especially when the visual benefits are dramatic in the overwhelming majority of applications. In a 16 camera job, if you eliminate 2 or 3 cameras, megapixel pays for itself. Even if you eliminate no cameras, the significantly higher captured details are likely to help solve a number of cases that analog quality would have missed (clearer images of suspect faces, license plates, etc.).

Undoubtedly, analog will be around in significant quantities for many years, primarily driven by the long lifecycles of CCTV systems (repairs, small expansions, etc.). However, for new deployments, the competitiveness of analog CCTV is collapsing due to the surge in low cost, widely available megapixel cameras.

1 report cite this report:

Low Cost Professional IP Cameras Comparison on Oct 23, 2011
"Too expensive" is probably the most frequent complaint about IP cameras. While IP cameras have clearly come down in price in the last few years,...
Comments : Members only. Login. or Join.

Related Reports

HD Analog vs IP Guide on Jul 16, 2019
For years, HD resolution and single cable signal/power were IP camera advantages, with analog cameras limited to much lower resolution and...
2020 Camera Book Released on Jan 10, 2020
This is the best, most comprehensive security camera training in the world, based on our unprecedented testing. Now, all IPVM PRO Members can get...
Video Surveillance History on Jul 19, 2019
The video surveillance market has changed significantly since 2000, going from VCRs to an emerging AI cloud era. The goal of this history is to...
Hikvision HDTVI Power Over Coax Tested on Feb 05, 2019
After years of delay, Hikvision's Power Over Coax (PoC) HDTVI models are finally shipping, aiming to make HD analog installs as simple as PoE, with...
Axis Supports HD Analog on Apr 15, 2019
In 2017, Axis declared 'Everything is IP': Now, in 2019, Axis has released support for HD analog, with their new encoders.  Why the change?...
Verkada False Allegations Against Avigilon Exposed on May 08, 2019
Verkada has leveled false allegations against Avigilon, as part of their aggressive marketing tactics against the 'dinosaurs' in the 'ancient'...
Fujifilm Expanding Into Video Surveillance on Jul 26, 2019
While Sony continues to fade out of the video surveillance market and Canon continues to make huge investments into acquiring video surveillance...
Online Video Surveillance Sales Comparison - Amazon, B&H, CDW, LTS, Super Circuits, More on Jul 31, 2019
IPVM has uncovered the key trends and top options being offered across commonly used surveillance sellers. How has the market shifted since we...
Axis HD Analog Encoder Tested on Oct 11, 2019
Two years after declaring "Everything is IP", Axis has released their first HD analog encoder, the P7304, with support for AHD, CVI, TVI, and SD...
Top 2020 Trend - AI Analytics on Nov 22, 2019
170+ Integrators answered: What do you think will be the top industry trend in 2020? Why? For the 4th year in a row, AI/video analytics was...

Most Recent Industry Reports

Dahua CEO Is Out on Feb 28, 2020
Dahua CEO Li Ke has resigned less than 3 years after he was brought in from Huawei to professionalize management. Inside this note, we examine...
Hazardous & Explosion Proof Access Control Tutorial on Feb 27, 2020
Controlling access to hazardous environments requires equipment meeting specific ratings that certify they will not start fires or will not...
Motorola / Avigilon Drops ISC West on Feb 26, 2020
Motorola Solutions has pulled out of ISC West 2020 effective immediately, because of coronavirus concerns, IPVM has learned. This is done amidst...
Cancel or Not? Industry Split Over ISC West on Feb 26, 2020
The industry is split, polarized, over whether ISC West 2020 should run or be canceled. New IPVM survey results of 400+ respondents show heated...
Coronavirus Hits Sony, Bosch Says Switch on Feb 26, 2020
Sony's fall in video surveillance has been severe over the past decade. Now, they may be done. In this note, we examine Bosch's new...
Video Surveillance Cameras 101 on Feb 25, 2020
Cameras come in many shapes, sizes and specifications. This 101 examines the basics of cameras and features used in 2020. In this report, we...
Favorite Video Analytic Manufacturers 2020 on Feb 25, 2020
Video analytics is now as hot as ever, driven by the excitement of advancing deep learning offers. But what are actually integrator's...
Latest London Police Facial Recognition Suffers Serious Issues on Feb 24, 2020
On February 20, IPVM visited another live face rec deployment by London police, but this time the system was thwarted by technical problems and...
Masks Cause Major Facial Recognition Problems on Feb 24, 2020
Coronavirus is spurring an increase in the use of medical masks, which new IPVM test results show cause major problems for facial recognition...
Every VMS Will Become a VSaaS on Feb 21, 2020
VMS is ending. Soon every VMS will be a VSaaS. Competitive dynamics will be redrawn. What does this mean? VMS Historically...