HDcctv Adoption and Barriers Examined

With HDcctv production release starting, speculation on its ultimate success and market share has increased. In August 2010, two organizations projected HDcctv growth. In this note, we examine the factors likely to impact adoption. We are skeptical and believe adoption is likely limited to a very small segment of the market.

For background, review IMS's projection of HDcctv having 15% of the total high definition camera shipments (i.e., HDcctv + MP IP cameras) by 2014. The HDcctv's own projection is for HDcctv to outsell all IP cameras by 2014 (total world market - 55% analog, 25% HDcctv, 20% IP).

We believe the biggest barrier to adoption (and either projection) is the lack of recording support for HDcctv cameras. HDcctv cameras are incompatible with all existing DVRs and VMS systems. While HDcctv cameras use the same cabling as analog cameras, HDcctv cameras cannot be plugged in to existing DVRs (you could physically do so but no video will be captured/recorded). An operational issue, this limitation significantly impacts use of HDcctv cameras.

No matter how good or cheap a surveillance camera is, lack of recording support is a huge problem. This was absolutely an issue for IP cameras for years (only overcome in the last year or so). This will equally be an issue for HDcctv cameras. Worse, HDcctv cameras demand new hardware for encoding video, requiring buying new encoders or new DVRs. For most buyers, it will not be a decision between HDcctv vs MP IP, it will be a decision between cameras that work with their recorders (MP IP) vs ones that do not (HDcctv).

The number of HDcctv recorders/encoders are likely to be limited for the foreseeable future. In August 2010, there are very few, if any HDcctv recorders (even less than HDcctv cameras). Even as recorders become available, buyers will be locked in to the recorder manufacturer (given the industry's lack of interoperability between recorders). Eventually HDcctv encoders will be released (and presumably they will support ONVIF/PSIA) allowing integration with VMS software. The timing of such product availability is questionable. Even once released, the economics of using a HDcctv camera + HDcctv encoder vs MP IP camera are questionable.

Other important issues remain including the price of HDcctv cameras (as we examined in July 2010). Online pricing for HDcctv cameras are starting to become available (about $500 - $700 on Google products). The cost of the cameras plus the cost of the encoders raises further doubts about the motivation to adopt HDcctv.

Given the lack of recorder support and the questionable cost savings, we believe HDcctv will have trouble gaining adoption. Undoubtedly, HDcctv has advantages (less technical skills required to install, possibility of reusing cabling). However, we do not think these can overcome the offerings formidable barriers.

Contrast this to our projections for Megapixel IP growth and adoption.