How the Recession Impacts Video Surveillance

By John Honovich, Published on Jul 19, 2008

The video surveillance market will take a beating regardless of the hope that security is recession-proof. This report reviews the key reasons and impacts of the recession with concluding recommendations

  • This recession is different from the last one
  • The debt market collapse will make users delay new purchases
  • Megapixel cameras will fare the best
  • DVRs will continue to decline slowly
  • A shakeout of NVR/IP Video software companies will occur
  • Video analytics will fare the worst

Different from Last Recession

In the last recession, the video surveillance market was held up by (1) the introduction of DVRs and (2) the global war on terrorism.

At the beginning of the decade, most users had no video recording and the ones that did mostly had VCRs. The value generation of going from nothing or a VCR to a DVR was very high, especially because it eliminated many manual tasks required for a VCR. The move from DVR to NVR does not provide the same value as that of nothing/VCR to DVRs. As such, you should not reasonably expect the same motivation by customers to move to NVRs in this recession.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

Secondly, the global war on terrorism boosted the last recession but cannot be expected to repeat now. For the past 7 years, both government and private sectors (think utilities, shipping companies, etc.) have funded an incredible amount of projects for homeland security. The US will to fund and fight a war on terrorism clearly seems on the way down. It is more likely that funding for video surveillance goes down than it goes up, especially given the bailouts the government will be engaged in for the next few years.

Delaying Purchases

In recessions, people delay buying new high priced items. Given that so many people already have video systems, it is easy for them to keep them a little longer. Yes, that DVR or analog camera is not the latest or greatest but it works for the most part. It is entirely sensible for organizations to delay.

The drive to delay will be enhanced by the tightening of the debt market. Stricter standards will make it harder for companies to obtain debt funding. Companies will rationally respond by eliminating or delaying new capital projects like video surveillance systems.

Megapixel Cameras will Fare the Best

Megapixel cameras work in the field. There prices continue to fall. They provide substantial increase in value over analog cameras and are offered by a small number of suppliers. All of this makes megapixel cameras likely to weather the recession well.

DVRs Decline Slowly

The recession should actually help DVRs somewhat. To the extent that it delays new projects to switch to NVRs, DVRs should benefit from service or replacement business. This is not to say that DVRs will continue to decline. Only that the decline should be slowed somewhat by the constrains a recession places on extensive change.

Shakeout for NVR/IP Video Surveillance Software

Way too many NVR/IP Video Surveillance Software companies exist. Easily 25 to 50 companies have developed and are marketing such solutions. Not enough differentiation exists between their products. Most of these companies are young and are not cash-flow positive. All of these factors indicate that many of these companies will fail. For the leaders in this space, this will actually be beneficial. However, customers need to be concerned about what systems they purchased because you may very well be left with an unsupported product from an out of business provider.

Video Analytics Will Fare the Worst

Video analytics demonstrates all the characteristics of a segment that will crash.

  • Most of the products work poorly in production use.
  • The products require buyers to find new budget
  • Most of the manufacturers basically offer the same solution
  • The companies are young and generally not cash-flow positive

I talk to industry leaders every day and the most common theme I hear is how disappointing video analytics have been. Underachieving products always far the worst during a recession. It is essenitally a “corporate Darwinism.”

Related Reports

AI Video Surveillance (Finally) Goes Mainstream In 2020 on Sep 03, 2019
While video surveillance analytics has been promoted, hyped and lamented for...
Infinova, March Networks and Swann H1 2020 Financials Examined on Sep 02, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
Video Surveillance History on May 06, 2020
The video surveillance market has changed significantly since 2000, going...
Lasers Impact on Surveillance Cameras Tested on Sep 25, 2019
Hong Kong protests have brought global attention to video surveillance and...
The 2020 Video Surveillance Industry Guide on Dec 20, 2019
The 300-page, 2020 Video Surveillance Industry Guide covers the key events...
China's SMIC Hit By US Trade Restrictions, Impact On Video Surveillance on Oct 13, 2020
US trade restrictions have hit Semiconductor Manufacturing International...
Dahua Revenue Grows But Profits Down, Cause Unclear on Oct 20, 2020
While Dahua's overall revenue was up more than 12% in Q3 2020, a significant...
Six Flags' FDA Violating Outdoor Dahua Fever Cameras on Oct 26, 2020
As Six Flags scrambled to reopen parks amid plummeting revenues caused by the...
VSaaS Will Hurt Integrators on Aug 06, 2020
VSaaS will hurt integrators, there is no question about that. How much...
Facial Recognition: Weak Sales, Anti Regulation, No Favorite, Says Security Integrators on Jul 07, 2020
While facial recognition has gained greater prominence, a new IPVM study of...
UTC Really Screwed Up The Interlogix Shut Down on Sep 27, 2019
UTC has made many mistakes in security over the years, however, the shutting...
Directory of 97 Video Surveillance Startups on May 20, 2020
This directory provides a list of video surveillance startups to help you see...
Directory Of 150 Video Analytics Suppliers on Dec 17, 2019
This directory provides a list of video analytics providers to help you see...
Top Manufacturers Gaining and Losing 2019 on Nov 18, 2019
2019 has been an explosive year for video surveillance, with the world's two...

Recent Reports

Motorola Solutions Total Revenue Down, Video Revenue Up on Oct 30, 2020
Motorola Solutions' total revenue is down, but video (both fixed and...
Recruiters Show 2020 On-Demand Recordings on Oct 30, 2020
Recordings from the 12 recruiter presentations are now available...
Consultants Show 2020 On-Demand Recording on Oct 29, 2020
Recordings from the consultant show are available on-demand at the end of...
Hikvision AcuSense G2 Camera Test on Oct 29, 2020
Hikvision has released their next generation of AcuSense analytic cameras...
Biggest Problems Selling Access Control 2020 on Oct 29, 2020
Access control can cause integrators big headaches. What practical issues do...
Taiwan Geovision AI Analytics and NDAA Examined on Oct 29, 2020
Taiwan manufacturer Geovision's revenue has been falling for years. However,...
Bedside Cough and Sneeze Detector (Sound Intelligence and CLB) on Oct 28, 2020
Coronavirus has increased interest in detecting symptoms such as fever and...
Fever Tablet Thermal Sensors Examined (Melexis) on Oct 28, 2020
Fever tablet suppliers heavily rely on the accuracy and specs of...
Verkada Fires 3 on Oct 28, 2020
Verkada has fired three employees over an incident where female colleagues...
Eagle Eye Networks Raises $40 Million on Oct 27, 2020
Eagle Eye has raised $40 million aiming to "reinvent video...
Hikvision Q3 2020 Global Revenue Rises, US Revenue Falls on Oct 27, 2020
While Hikvision's global revenue rises driven by domestic recovery, its US...
VICE Investigates Verkada's Harassing "RawVerkadawgz" on Oct 26, 2020
This month, IPVM investigated Verkada's sexism, discrimination, and cultural...
Six Flags' FDA Violating Outdoor Dahua Fever Cameras on Oct 26, 2020
As Six Flags scrambled to reopen parks amid plummeting revenues caused by the...
ISC Brasil Digital Experience 2020 Report on Oct 23, 2020
ISC Brasil 2020 rebranded itself to ISC Digital Experience and, like its...
Top Video Surveillance Service Call Problems 2020 on Oct 23, 2020
3 primary and 4 secondary issues stood out as causing the most problems when...