The CCTV systems industry is set to follow in the footsteps of the mobile phone sector and embrace a recurring monthly revenue model that includes the purchase cost of the cameras and hardware and a service fee.
This is according to new research from sector analyst IHS Inc, which describes the newly established payment model as video surveillance as a service (VSaaS). The report from IHS states VSaaS is expected to see average annual growth of 17 per cent up until 2017, when the market will be worth an estimated $1.3 billion (£0.8 billion).
It is thought that increased CCTV consumption from the small to medium business (SMB) and residential markets will drive the growth of VSaaS and change the traditional pay model for the CCTV industry.
"End users in the residential and SMB segments, while interested in a video surveillance system, often are not in a position to make the significant capital outlay required to purchase hardware upfront," said Aaron Dale, analyst for the security and fire group at IHS said.
He explained: "Inherently, businesses and consumers prefer to spread the cost of goods and services over time."
This method of paying for security systems has already proved to be very popular in China, a market that currently accounts for 68 per cent of existing VSaaS revenues. A global move to monthly payments could be positive both for end users and vendors, as it would also provide the potential to secure long-term revenue streams.
IHS added that security systems and the services they provide are well set up to provide the kind of technology and reassurance that many modern consumers find preferable with a monthly payment structure. It could even create the sort of long-term business partnerships that are seen in the telecoms industry, with businesses benefiting from regular technology upgrades as part of their package.