Blockbuster, Redbox, Netflix & the CCTV industry

A new Redbox kiosk arrived recently outside my local pharmacy. If you are from the United States or certain parts of Canada you will know exactly what Redbox is. For those of you not from North America, let me explain.

Redbox is the North American replacement for Blockbuster, which went out of business in the US some time ago. Blockbuster may have gone, but that hasn’t stopped Redbox from riding its coattails beyond the grave.

Redbox is a self-contained, fully automated, DVD rental kiosk. For as little as 99 cents you can rent a physical DVD, just as you once could from Blockbuster. However, unlike Blockbuster, Redbox is making a fortune out of a business that it knows is destined to fail.

In the end, streaming video from companies like Apple, Sony, and Netflix will win the race. DVD rental companies are very aware of this, yet Redbox continues to profit in a dying niche with good timing and rapid execution. This finally brings me back to why we are all here: the security industry.

The very same battle is taking place right now among analogue CCTV, HDcctv, and IP.

Analogue is dying, and HDcctv addresses a niche group of installers that refuse to move to IP, but have customers who expect an HD solution.

By providing HD video (up to 1080p) over coaxial cable in a plug-and-play installation like traditional analogue cameras and DVRs, HDcctv allows integrators to install an HD solution without replacing cable or learning how to network IP cameras.

Executed properly, HDcctv should be able to capitalise on a significant number of analogue users as they reluctantly make the transition to IP. Unfortunately, HDcctv has not had the perfect timing Redbox has, at least not in North America or Europe.

Redbox was effective in the United States because it launched before Blockbuster was dead and before users had been forced to adapt to online rentals.

H.264 codec
For HDcctv to have the same success it would have needed to have a product on the market before the release of H.264, the compression codec that shrunk storage costs and led to the rapid adoption of IP technology for surveillance.

It is too late for HDcctv to gain market share in North America or Europe. Integrators that want to sell HD have already spent the money to train their technicians in IP technology. There is no incentive for them to switch back now.

There is still hope however.

HDcctv may have missed opportunities in the most obvious markets, but that doesn’t mean it cannot become the CCTV equivalent of Redbox somewhere else.

First though, it will need to reposition itself as an alternative to analogue (not IP surveillance), especially in markets that have already made the transition to IP.

Instead it must target areas like Asia/Pacific that still have a stable analogue market. Markets like these are beginning to go through the growing pains of moving to IP and over the next few years would welcome a product like HDcctv.

Redbox is a company I respect for filling a need where others have already given up, and it’s being handsomely rewarded for taking that risk.

HDcctv is a product that I believe could be the perfect solution for the equivalent void in the surveillance market, but not by competing with IP in markets where the void has already been filled.

HDcctv will not beat IP, but it still has an application in the industry.