Police Body Camera Business All About the Video Evidence Storage

Lucas123 writes: Body cameras are the fastest growing segment of the police video camera business. The two largest police body camera manufacturers today — Taser and VieVu — say they've shipped devices to 41% of the nation's 18,000 police departments. But, the hardware is only the basis for the real business: video evidence storage. Last year, Taser's gross profit margins on hardware were 15.6%; the gross margins for video storage were 51%, according to Glenn Mattson, who follows Taser as an equity analyst for Ladenburg Thalmann. "There's no contest. They don't care about making money on the cameras," Mattson said. As of the first quarter of this year, more than a petabyte of police video has been uploaded to Taser's Evidence.com service. Just one of VieVu's clients, the Oakland PD, has uploaded more than a million police videos. The cost of storage, however, is so high that police departments have been forced to determine strict retention policies, that in some cases may effect the long-term handling of evidence. In Birmingham, Ala., for example, where they've deployed 300 cameras and hope to double that this year, the the video cameras themselves cost about $180,000, but the department's total outlay for a five-year contract including cloud storage with Taser will be $889,000.

Comments

Gross margins versus Net margins

[sjbe]

Before anyone gets too worked up, a 50% GROSS profit margin is nothing too exciting for something that is basically a software business. If it were a 50% NET profit margin then that would be different and the net profit margin is the one that really matters - it's the so-called bottom line. Gross profit margins are just the revenue minus the direct cost involved in the service (direct labor and materials mostly). It does not include cost of sales, marketing, overhead, administration, indirect labor, utilities, etc)

For comparison software companies typically have gross margins considerably higher than 50%. For example Microsoft had a 66% gross profit margin last quarter. A manufacturing company typically has gross profit margins between 10-30%. GM and Lockheed Martin have gross profits of around 11% for example. Toyota has gross profits around 20%.