#1 IP Camera Problem

Author: John Honovich, Published on May 06, 2013

Cost was, far and away, the number #1 cited problem in going to IP cameras / video. We asked over 100 integrators to name the "3 biggest problems / barriers" they found, allowing them to name whatever they wanted. Over and over, the top one entered was cost.

Here's how the answers roughly broke down:

Some of the color provided included:

  • "Price Price Price" listing it for all 3 reasons
  • "The only reason is cost"
  • "Cheap prices of analog system is attractive for many customers"
  • "Although IP cameras are coming down in cost, analogue is still much less expensive generally."
  • "Expense of having to replace legacy head end equipment such as analog DVRs or making an investment to a pure VMS system."

Indeed, most people simply listed just a single word - 'cost' or 'price'.

By contrast, the overwhelmingly top cited benefit was megapixel / high pixel count.

Key Takeaways

On the positive side for IP cameras, unlike a few years ago, there is no doubt that it is 'better' than analog. Higher pixel counts, panoramic imaging, edge recording, far improved low light performance, the wealth of form factors and manufacturers to choose from all make IP cameras the clear choice for high end surveillance.

On the negative side, it is clear that especially at the lower end of the market, that analog suppliers, typically newer Asian based entrants, are successfully selling extremely low cost analog kits (e.g., 4 cameras and a recorder for $400 or $500, or a 16 channel DVR in that same range).

For us, these survey results help identify areas where we can better focus our resources in identifying low cost offerings. For suppliers, this should help reaffirm the importance of developing new products that bring down overall cost.

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Comments (75)

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systems should be sold on solutions and not price... with that being said it comes down to qualifying potential customers on the benefits of megapixel vs analog, this is the responsibility of the dealer...

i would be interested to see if it is just the dealers that see the cost as a hurdle and shy away or if it is from customer feedback...

Keefe, that is one area that I think IPVM can help - more in-depth analysis of entry level quality analog system vs MP/IP one. We did a DVR vs VMS comparison 2 years ago that showed how good one entry level DVR had become but we can certainly do more.

When installers say that cost is an issue with IP Video they actually say 'i do not understand how to make money on other things as on HW'.

The reality is that when IP manufacturer x lower his price to whatever the installer will probably not give this back to his client. Am I right?

Most installers have to start accepting that the days of making your money on HW are gone. And that's in essence where they complain about. Its not price what they name the '#1 IP Camera Problem' its 'not understanding' ip video.

There are so many great possibilities with all these connected security devices, with all that data coming out of devices. Think about what mobile will do to security or the cloud, That are the new business models.

Most IP Cams have a reasonable price when you take in consideration all the stuff that is build in, and what you can do with a device like that.

The new reality is here and it will be here faster as many of us expect. Start focussing on 'services' 'data', not on the cam pricing or your HW costs. A good exercise is stop thinking about 'the picture'. We all know that we can get xxx Megapixel. but what do we see in that picture, whats the story. And what sort of services I can build around that.

Its not about the picture anymore but about the data and information in that picture, how to share this info with the right people and the story around that picture.

"Most IP Cams have a reasonable price when you take in consideration all the stuff that is build in, and what you can do with a device like that."

Perhaps, but how does all that extra stuff tie into a customer's value proposition?

To leverage something as simple as video/cash register synchronization requires us to upgrade cameras, VMS, cabling (RG6U to Cat5e or better), cash registers (from stand alone to integrated), and back office integration (otherwise where does all that front-end integration go?). Pretty soon the cost is perhaps around $50K or so.

Where is the value added to a Mom and Pop establishment that grosses well under $1M/yr?

It would be nice to see value-added use cases called out more clearly. For example, we're frequently discussing technical and surveillance market issues, but compelling business cases for surveillance are discussed much less frequently. Perhaps it's just assumed that surveillance will sell? Obviously at some level that is true, but this does not assure that it justifies the price premium of IP upgrade and holistic system integration, particularly for cases in which the customer already has an adequately functional analog system.

One might answer that IP upgrade is becoming less of a price premium, although that sidesteps the question of the surveillance business case.

For example, I found Michael Ladegaard-Pedersen's post here very very interesting. It would be interesting to see follow up details hypothesizing what such surveillance/business process matches might look like. Without getting specific to a particular customer, one wonders what sort of generalizations might be relevant across various types of businesses?

I have been selling and installing IP camera systems since 2005. We are a commercial systems integrator specializing in the healthcare, education, government, and industrial manufacturing markets. For me my general observation has been this, my large customers with deeper pockets clearly prefer IP VMS systems. For my smaller and medium size customers I often propose an IP and an analog solution and unless their needs determine that they need megapixel resolutions, 9 out of 10 times they choose the analog solution and cite cost as the reason for their decision, and it is not because they do see the potential benefits of IP. The fact is most small and medium sized business make decisions based more on cost as compared to my larger customer who makes decisions based more on capability and quality.

I have a client with very deep pocket and I was able to convince him to go for Sony MP cameras, but it wasn't easy. Price is definitely the #1 factor, next for me is the complexity as it involves the client's network in which everything that goes wrong with it I get to be blamed. Their internet access became unstable thereafter and they blamed me, actually accusing me of tampering with their network. They ended up hiring an IT firm to take over their home-based network.

@Ronald

"They ended up hiring an IT firm to take over their home-based network."

And that IT firm focussed NOT on the HW but on a stable network, and for sure some service contracts.

@undisclosed

Sure, but I was put aside (discredited). I'm not hearing from that client even though he still owes me installation $, not HW $.

So, analog cameras are easier to deal with.

We buy a FullHD Vandalproof Dome for 120 Dollar and sell it for 649 Dollar regular price and often we make a discount about 20%. It is only a little bit more expensive than analoge but it is easy to show the client the diffrence and he will mostly go FullHD. I would never buy from Axis, or Mobotix or another company who think I buy with 30% Reseller Discount :-) We make that to get money and I think the money has be won over the products too. Because if the client already spend alot of money for the procucts, he is not willed to pay alot for the work too. I try to do all with IP, but we still keep some nessesary cameras and DVR`s on stock. If you think my prices are crazy, I am in Switzerland ;-)

@Ronald: sure it's "cheaper" and "easier" up front to use an existing network, but as you found out, that caused other problems in the long haul. Building your own network is almost universally recommended for all but the smallest systems, and when you really think about it, it's not necessarily any more complicated than running analog: you wire direct from the camera to the head-end, with the only functional difference being, you're plugging into a switch instead of directly into a DVR.

What I find amusing, really, are the ones who balk at the cost and say that higher resolution is meaningless... yet they'll be the first to push a D1-capable system over one that only does CIF, and go on at length about the greater detail, etc. So wait, higher resolution is good, but only up to D1? Beyond that it means nothing? Riiiiight.

Yes, IP is more expensive, but it delivers more quality video. In a system, not all cameras need to be high definition or megapixel. For me, the best approach is to start with a hybrid system (some IP cameras, only where needed; all others analog). Infrastructure should always be a structured cabling system, so the user can migrate from analog to IP easily in the future.

this way, you get the best of the two worlds: analog, and IP, but always based on the same platform.

Great Response Matt, I concur.

Usually the problem is installers,integrators don't account for the amount of time it takes to properly set up the VMS side of the process.

analog is easier, faster, have less problems in the programming, and the networks side of the house.

Since we are accepting D1, CIF as a good picture, analog is a great system. I prefer IP/Mp, VMS systems. Reality is the universal problem is not cost, but technical ability to integrate properly. It takes a lot of time to set up, program, calibrate, install good IP systems. This factor drives up the cost

Not everyone has the background to complete the process.

Other issue as listed above is infrastructure and no one want to share their network. But like you explained above, Running your own, solves this issue. So in conclusion to this statement the real industry problem is not cost but technical aptitude

Jaime: that's exactly what we're doing these days: everything is cabled Cat5e and USUALLY terminated into patchbays, which allows any run to be used for analog or IP, and easily switched over.

We also use a unit that combines multi-channel balun and power supply in one rackmount box, so there's no need to mess around with splitting out wires for analog: just unplug the patch cable from the VPS box, and plug it into the switch, then swap the camera over. The camera gets a matching RJ45 balun with power pass-thru so there's no re-termination necessary at that end either.

The last big job involved a good quarter of the runs terminating in a remote closet, since runs directly to the main closet would have been over the 100m max for ethernet... the IP cameras terminate in a switch that then has a fiber link to the main closet; the VPS box in the remote closet allows uplink to another in the main closet using one Cat5e for four cameras, making the entire thing very modular.

This, for me at least, is a great benefit of IP cameras: you usually can home-run everything, but you don't have to; you have more options.

I think cost is still an issue but is becoming less of an issue. Soon it will not be an issue. Give it a couple more years and I think Analog will be pretty much dead. Alot of people disagree with that statement but it will be dead in 2 years.

What I would really like to see is the simplicity continue to improve. I look forward to the day that we no longer call IP cameras, "IP Cameras". Rather, we just refer to them as "Security Cameras" This is when you know IP cameras have finally dominated and Analog is no longer a player.

Ronald,

your customers home network may have become slower once you installed the system especially if you put all your cameras on the local network... for your next ip based install approach it the same way as you would an analog install, only the dvr goes on the network... so wire all your ip cameras privately into a seperate nic and then for local lan or remote wan put viewing have a second nic for that... that way not all of you cameras are streaming over the local network while they aren't being viewed that will reduce traffic on te network...

One other thing: It's not only the IP cameras high cost (compared to analog), but all the infrastructure needed: switches every 100m or the use of fiber. For long runs, this makes IP systems even more expensive. Think of some IP cameras that need to be installed in the perimeter of a factory. You would think of using fiber (but it requires a separate electrical infrastructure also), or wireless links (not very stable, and expensive).

Sean: I think that it will happen sooner than later as the current events in the world help drive the industry.

Every time you watch the news, you see more & more cameras outside, where as in the past, focus was on the inside. Sales drive cost down and to keep up with this, the companies want more innovative tactics for their share of the sales.

I personally don't like the old crappy cameras you can buy for nothing on the internet but thats whats available for a low cost.

Yeah I think it will happen sooner than 2 years to be honest, but I was being cautious.

@ Jaime: I disagree with you here. I think you have alot more flexibility with infrastructure for IP cameras. I think IP infrastructure costs are lower than analog equipment, especially when using POE. Its especially true on larger installs. We can usually get Cat5E alot cheaper than we can Siamese Cable. Most analog cameras nowadays use 12V DC and you will struggle to get a good power distribution past 200'. With POE, you can go a little over 300'. Not to mention, its alot easier to get multiple IP camera feeds over one cable than it is with analog, for those special scenarios.

Excellent comments, everyone!

A few points of feedback:

  • For those mentioning the issue of using existing vs new networks, see our survey results on IP Video Network Video Deployment and why ~75% prefer dedicated networks.
  • Tobias, you say, "We buy a FullHD Vandalproof Dome for 120 Dollar and sell it for 649 Dollar regular price and often we make a discount about 20%" That's an incredible markup!
  • Sean, I do think the gap can be significantly narrowed at the low end, it primarily takes focus for manufacturers. As we have discussed before, Dahua is a good template for this. Plus traditional high end players, like Axis and Milestone, are making stronger efforts with, respectively Camera Companion and Arcus.
Sean, if you are wiring analog cameras the conventional way, you are right. But as Matt mentioned, you can use just one Cat 5E cable for video/power/data per camera, and depending on the camera consumption, you can go as far as 1,000'.

Cost is the #1 sticking point for IP. It just is. Even with free VMS software and low cost cameras (i.e. Axis M30 series), you are still fighting an uphill battle.

My sales pitches are now almost entirely about education. I walk customers through PPF, light-sensitivity, motion-blur, and WDR concepts. This takes nearly an hour. Only then do I get into implementation details. I use JVSG to create an ideal layout using MP cameras, showing them coverage and PPF throughout. I then duplicate the JVSG layout and reduce all cameras to D1 resolution. This really helps the customers understand WHY they want to spend more.

Convincing customers to set aside 1.5 to 2 hours for a pitch is never easy, but I have had more than one say the appreciated me "talking them into it". It becomes a key differentiator on two fronts: 1) I care enough to spend the time educating them. 2) I prove my competency.

It is not a 100% effective strategy. Some customers think any argument for spending even a penny more is just trickery. We lose those bids. When we win though, we have a customer that values what we bring to the table and is willingly paying a premium for competent quality work.

Does anyone quote it both ways (analog and IP) and give the client a choice?

I always thought that once these small cut rate chinese manufacturers start making IP cameras, that is when it will change the market. And they already have started making them. Some are making them with the same exact components as what the bigger manufacturers are making them with, Aptina Imagers, TI processors, etc. But for half the cost. The web interfaces pretty much look like diareah but the image quality is great. Give them a few more months and some will have a decent product.

I have to compare this with the flat screen TV industry. When flat screens first came out, they were ridiculously expensive and resolution was so so. Then they started coming down in price to where they were very affordable and the image quality was great as well. And while they were still more expensive than the tube TV's, the price difference was so minimal compared to the quality difference that you get. And now you dont really see tube TV's being sold anymore. This is where I see analog going, IMO. For those people needing no latency, SDI or some other technology will be the choice.

@Steve

we only quote cameras systems megapixel... my thought are so strong towards mp i believe it sends a clouded message to our potential customers if we were to show them analog only as an option for price based sale...

What helps us close the deal on Megapixel is we will show them 2 cameras in the same type of field of view. The first one is from a 700 TVL analog camera and I explain to them that this is the highest resolution you will ever get from analog. Then I show them a 1080p image and they usually get blown away and the thought of buying analog quickly diminishes. Also, when I am showing them this, I make sure to show them through the remote viewing software as opposed to the actual monitor that is attached to the DVR. Because through the remote viewing software, you are seeing the analog cameras encoded video which looks worse than the live uncompressed video on the monitor that is attached to the DVR. Because really, its the encoded video thats the most important because thats what you are going to see on playback anyways.

@Steve, I think it would be particularly useful if the platforms were otherwise the same (i.e., here's brand x - analog option and brand x mp option, the other features are basically identical). But if it was too different manufacturers, it could get confusing as it might be hard to understand what you get (or lose) respectively.

if pricing is the only hurdle in deploying mp systems to customers does anybody offer financing/lease options to their customers...

Keefe, thanks for bringing that up. See our survey results on leasing video surveillance systems. In general, leasing in surveillance is far far less common and desired than the intrusion business. That said, our results show that what little take for leasing occurs in surveillance typically happens for smaller sized businesses. Indeed, the VSaaS suppliers are hoping that monthly fees for hosted IP video will help. I am not optimistic about that, simply because if what a customer really wants is low cost, a few hundred dollar DVR is almost always much cheaper than VSaaS fees for even the first year (e.g., VSaaS ROI examined).

I have to echo Sean's comment above - easiest sale I ever made (and I'm really just a tech, NOT a salesman) was when we were in the middle of one of our first MP installs using 1.3MP cameras, and I'd taken some screenshots of the views... when I stopped by another customer's site, I pulled the pictures up just to show him, "this is what we're working with now." I wasn't intending to make a "pitch", but he took one glance and said, "I want that." And we promptly added three IQ511s to his site.

No, it's not 100% effective... but a lot of people will just glaze over when you start throwing lots of numbers and calculations and statistics at them. Images in this case, really are worth 1000 words.

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