Securing Profits

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Melrose Place, like many other gated communities around the country, is literally wired for security. But the more interesting issue is how consumers can perceive security as just another household service.
Carrie A. Rentschler

Issue #48, March 2000

A man is not born to run away.
— former US Supreme Court Justice Oliver Wendell Holmes, in a letter to his friend, political scientist Harold Laski, 1921

In the spring of 1999, I posed as an undergraduate student when I visited Melrose Place Apartments, a newly developed apartment complex catering to the University of Illinois student population in Champaign, Illinois. I indicated during my visit that I was concerned about my own safety, and that I was interested in their security protocols. What I learned was very interesting indeed.

I was first treated to a video on Melrose Place Apartments, a Florida-based corporation that only builds their complexes in mid-size college towns around large universities. Melrose Apartments caters particularly to undergraduate students living away from home who want to avoid the dormitories. They provide computer rooms, workout facilities, a swimming pool, and large lush lounges with big screen TVs, over-stuffed couches and fireplaces. In a sense, Melrose Place is a hyper-luxurious private dorm, costing each resident no less than $500/month (each resident shares an apartment with one or three other roommates, the former costing more than $500/month in rent). But what makes Melrose Place unique is not only their advertised attention to issues of personal safety for prospective renters, but also the technical systemization of security on their premises. Each apartment comes equipped with a burglar alarm, and each bedroom is wired with panic alarms, which connects the alarm-pusher directly with Melrose's contracted security response company, who then calls the resident to rule out a false alarm before calling the Champaign police department. I was assured the police would arrive within 4 minutes if I should push the panic alarm. Each apartment's television is also hooked directly into the closed circuit security camera system (CCTV) located at the gated entrance to the apartment properties, each apartment building entrance, and throughout the main facilities building.

color phone Melrose Place, like many other gated communities around the country, is literally wired for security. But Melrose Place and gated communities are not just further instances of Big Brother peering in on our privacy. The more interesting issue is how consumers can perceive security as just another household service. In fact, security systems these days are now available bundled with direct broadcast cable service (DBS) and telecommunication services. And while studies done by security industry analysts say most consumers don't particularly care whether their security systems are combined with their telecommunication and cable service, this is how more and more home-based security is becoming available.

This suggests something beyond getting one's residence wired for internet, long-distance, cable, and home security all at once — a nice service if you can afford it, and want it. It suggests something bigger and much more difficult for us to perceive: the consolidation of security industries with telecommunication industries and the subsequent centralization of the security industry. This consolidation has radically increased the profit-making potential of security industries, and subsequently their partners in telecommunications. In 1990, private security (mostly private guard services) was a $4.5 billion industry, with an annual growth rate of 12%. In 1992, detective agencies and protective service industries (private guards, armored car service, telephone answering services, security system services) had revenues of $12 billion. Security system services alone generated $3.4 billion in revenue, guard services a whopping $7.3 billion. The 1999 Security Distributing and Marketing's "Industry Forecast" pegged total revenue of dealer and installer security firms at $15.25 billion for 1998, up from $14 billion in 1997. Another security industry trade journal, Security, estimated that the total US private security market (including government and corporate spending) amounted to $88 billion in 1998.

This profit-making potential, however, depends upon corporate and household consumers' perceived fear of personal and property crimes. Security industry trade journals consistently offer stories with themes like "Fear of Crime is Still Up!" However, consumers' actual perceptions of fear (for example, feeling like they are likely to become a victim of violence or that their home has been targeted for invasion) are not a necessary condition for their purchasing security systems, especially when security comes bundled with entertainment and network communication services. The Consumer Survey on Home Security, conducted by Protection One and the trade journal Security Distribution and Marketing, shows that the people most likely to fear home invasion are those who already own home security systems, 50-59 year-old white males. Owners reported levels of fear that are the same as those respondents who indicated that they were definitely going to buy a security system. Buying security appears to guarantee continued fear of crime if that fear already exists.

While individual consumers may have some concern over their personal safety and the safety of their home electronics, according to security executives, corporations tend to most fear employee theft, property crime and unauthorized access, followed by workplace violence, computer security, parking lot security and burglary in that order (Security Distributing and Marketing, January 1998). Campus security executives rank their top "risks" in similar fashion: theft and burglaries top the list, followed by computer security, unauthorized access, alcohol and drug problems, and vandalism. Corporations and educational institutions address risks in a way that protects profits first and people second. They create a hierarchy of protection: they protect property first, information (another form of property) second, access third, and then human life. While the safety of technology and information can easily be translated into profits, human safety becomes an issue of public image.

The security industry's profit making was made possible by the 1996 U.S. Telecommunications Act, which allowed for the convergence of telecommunication and security corporations. Convergence is the move toward providing phone, long distance, cable, security and on-line services from one provider. Ameritech, for instance, owns Security Link, the second largest security corporation, behind top-ranked ADT and ahead of third-ranked Protection One, each of which has been busy buying up other security firms. AT&T recently won a contract with ADT worth several million dollars to provide telecommunication services to the security company's operations. Most security companies are either owned, partially owned or in joint ventures with telecommunications giants.

While security companies are affiliating themselves in more concentrated ways with telecommunication corporations, there has also been a fracturing of the security industry. More firms are selling accounts and using third party monitoring (such as Melrose Place's contracting out their security alarm monitoring service) because it is more profitable than keeping it in-house. This is similar to when media conglomerates sell off ownership of some of their subsidiaries because conglomeration loses profitability at a certain point. Conglomerates buy profitable industries while they are profitable, and sell them off when they fail to meet profit expectations (such as when Pepsi sold off its fast-food franchises in the mid-1990s).

Where's all this profitability coming from? For one, there has been a lot of growth in new housing markets, especially in upscale and multi-family dwellings (such as Melrose Place apartments) where security systems are included in the planning process. The majority of security business is in housing. Thirty-five percent of the alarm and surveillance security market is in upscale housing markets, and another 25% is in middle-income housing markets. In 1999, a typical home alarm system came at a significant cost: $2000 to install and another $31/month to monitor. The most rapid growth in the security market, however, is in the corporate sector. More and more of corporate America is farming out their security operations to private security companies, which is particularly lucrative for the security industry.

woman circuit The security industry is also benefiting from military downsizing. As military technology is de-classified and enters the civilian market, security industries can step in with that technology and provide services to schools, homes, corporations and law enforcement. For instance, Michigan schools have been experimenting with Department of Defense software that analyzes weak points in security systems. One Las Vegas school is considering installing night vision cameras in its parking lots. The last 10 years in the security sector of the economy have seen a shift from the military capacity to produce new security technologies to a civilian, consumer-based market directed at home owners and corporate executives. Thanks to groups like the American Defense Preparedness Association, defense contractors can make contact with law enforcement and civilian consumer markets to create demand for security technologies and thereby expand their markets.

It's pretty clear that fear of crime does not go away when one buys a security system or monitoring service. Fear may not even be a necessary condition for investing in it. Nonetheless, buying security does seem to guarantee one's continued fear of crime. Security as a service creates its own demand. Once you have security, the idea that you need it is reinforced. It's a bit like upgrading your cable TV service to digital cable with one of those "it's free for three months" offers; once you have it, it sure is easy to feel like you need it. This is exactly what security industries invest in. They see security as another service they can provide to unwitting customers based upon their own industry's commitment to increasing the public's fear of crime. "Man" may not have been born to run away from fear, but he certainly wasn't meant to feel fear simply to secure profits for others.

For Further Reading

Cunningham, William, John Strauchs and Clifford Van Meter, Private Security Trends 1970-2000: The Hallstead Report II (Boston: Butterworth-Heinemann, 1990).
O'Toole, Patrick, "The Importance of Being Number One," Security Distributing and Marketing, November 1997, 25, 40-42.
Stepanek, Laura, "Peace of Mind, Piece of Revenue," Security Distributing and Marketing, July 1998, 74-76.
Zalud, Bill, "Whose Advantage?" Security Distributing and Marketing, January 1998, 68-73.

Carrie A. Rentschler is a graduate student in the Institute of Communications Research at the University of Illinois at Urbana-Champaign. She has a longstanding interest in feminist antiviolence activism and is writing a dissertation on the victims' rights movement.

Copyright © 2000 by Carrie A. Rentschler. All rights reserved.

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