Ovum is a firm believer that broadband service providers must take a more central role if they are to be successful in the smart home market, creating services and applications that are applicable to their entire customer base, not just niche segments. After its launch of Works with Xfinity (see Ovum report “Comcast simplifies the smart home by putting Xfinity at the core”), Comcast has taken another step in this direction with the launch of a smart home cybersecurity subscription service, xFi Advanced Security. The big question around a service such as this is whether consumers will pay for it, and certainly the world will be watching with interest to see if Comcast’s customers are willing to the pay its $6 subscription fee. Ovum predicts that this will be the first of many such launches in 2019 as broadband service providers look for ways to monetize the smart home.
Comcast has launched a new subscription service, xFi Advanced Security, that monitors and protects all connected devices in the home (including third-party and IoT devices) from cyberattacks. Using AI data analytics, the service detects and blocks any suspicious activity, alerting consumers to potential threats as well as technical vulnerabilities they may have on their home network. As a cloud-based service, these systems can monitor the traffic on any device connected to the home gateway, in this case Comcast’s xFi gateway, enabling the service provider to provide a whole-home cybersecurity service regardless of what devices the consumer has installed or where they have purchased them. xFi Advanced Security is available to any Comcast customer with an installed xFi gateway device (approximately 15 million homes) and costs $6 per month.
As the number of connected devices per household rapidly increases, cybersecurity is a growing consumer issue. Smart home IoT devices are a particular problem because they often have little integrated cybersecurity protection and most consumers are not technically astute enough to secure the devices themselves, leaving their homes open to attack and intrusion. Ovum has stated for some time that as well as developing specific smart home applications where profitable, the role of the broadband service provider in the smart home is also to provide more general support services such as advanced cybersecurity and technical support. These services should be developed alongside the service provider's overall advanced home Wi-Fi roadmap (see Ovum reports “Role of the Telco: Generating Growth in Future Digital Consumer Services” and “Developing Business Strategies for a Smart Wi-Fi Gateway”). The big question has always been, however, how much broadband service providers can charge for these services.
The danger is that service providers believe consumers will expect services such as cybersecurity to be provided free as part of their overall broadband package. After all, that is what consumers have become accustomed to as service providers have offered more and more VAS as part of their service packaging to differentiate and protect against customer churn. However, although basic PC security is often provided as standard, more advanced features are usually charged for and premium services (at least according to cybersecurity vendors) continue to remain relatively lucrative. Ovum believes that smart home cybersecurity should be placed in this premium bracket. Broadband service providers have the unique and significant advantage of being the central supplier of connectivity to the home, and building on this asset should be at the heart of broadband service providers' growth strategies. Throwing everything in for free, or simply allowing companies such as Google and Apple to enter the fray and capture all the revenue opportunities instead, seems nonsensical. Whether Comcast has its pricing of $6 per month correct remains to be seen, but as consumers become more aware of the threats of not having such security, paying at least a couple of dollars per month to protect one’s home certainly doesn’t seem an outrageous amount.
Developing Business Strategies for a Smart Wi-Fi Gateway, CES006-000008 (February 2018)
Role of the Telco: Generating Growth in Future Digital Consumer Services, CES006-000052 (January 2019)
2019 Trends to Watch: Smart Home, CES006-000037 (September 2018)
“Comcast simplifies the smart home by putting Xfinity at the core”, CES006-000007 (January 2018)
"Broadband service providers must protect their role in home Wi-Fi," CES006-000047 (October 2018)
Michael Philpott, Senior Practice Leader, Consumer Services