The Bait & Switch of Home Security

Summary by Krater

An in-depth business analysis of ADT, examining its market leadership in home security alongside the financial mechanics of subscription monitoring, customer attrition, dealer networks, and strategic partnerships.

From the video

Answers: How does ADT make money and maintain its market dominance in the home security industry?

• home security business models
• subscription monitoring revenue
• dealer networks and third-party sales
• customer attrition in home security
• ADT financial performance and capital structure
• partnerships with Google and State Farm

What it concludes

• ADT is the largest player in the home security market but faces structural challenges including high customer acquisition costs and attrition.
• The core of ADT's business model relies on subscription monitoring and long-term multi-year contracts rather than upfront hardware sales.
• ADT utilizes an indirect dealer network to drive new customer acquisition while managing customer attrition through strict contractual clawbacks.