It’s safe to say the custom integration channel is robust and thriving, according to the latest data compiled in the biannual Market Research Analysis survey that CEDIA has unveiled. Among the key takeaways, the association estimates the industry comprises 20,000 integration companies that drive a $29 billion U.S. market – up from $20.1 billion in its previous report in April 2022.

The study was once again conducted by Ancrage Consulting in affiliation with Butler University’s Lacy School of Business, based on the span between summer 2022 and summer 2023. Additionally, survey takers were asked about their forecast for growth between fall 2023 and fall 2024.

Ancrage’s Krista Rosenberry walked through the results during a CEDIA-hosted webinar held Dec. 6, which also included input from Giles Sutton, SVP Product & Business Development for the association.

During the hourlong webinar, Rosenberry outlined the methodology of this year’s survey, key findings for industry stakeholders, U.S. market size estimates, market segmentation and trends, top brand rankings in 15 categories, and challenges and opportunities for the industry (surprise, surprise – workforce and labor shortage remains high on the list).

Different from CEDIA’s 2021 survey, this year’s Market Research Analysis report featured not only responses collected from 111 qualifying integrators (conducted July-August 2023) but expanded to represent 1,000+ integrators thanks to partnerships with D-Tools and Portal. Additionally, 14 manufacturers and distributors contributed insights that augmented the data points.

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Based on all of those combined facets, which included numbers crunched from the vast amount of project specs quoted within D-Tools and Portal platforms as well as active integrator lists among brands, CEDIA and Ancrage calculated the ~20,000 and $29 billion figures.

“The survey portion of this research is designed to hand select only decision-makers based in the U.S. that have a strong presence in the U.S. integration market,” Rosenberry says of the 111 dealers, which had to take in a minimum of 20% residential revenue and perform at least three resi projects in the past year.

“Without these qualifications, we could have had hundreds more participate, but it also would have cluttered up the data set and loosened the focus on these strategic-level topics such as growth, areas of investment, and brand rankings.”

Market Research Analysis Covers Large Range of Company Sizes & Project Scopes

The breadth of integrator sizes and project scopes represented in those estimates is a wide one. Rosenberry noted survey respondents ranged from businesses that earned less than $100,000 to those that raked in more than $40 million in revenues, with a median of $900,000.

Meanwhile, median (midpoint) project size is estimated to be around $15,000, taking into account a range of $12K to $21K based on sales pipelines and survey data. Average project size is between $20K and $57K.

She noted that the 2024 outlook tended to be the rosiest from the small-to-midsize integrators based on their responses.

Other key findings include:

• On average, 78% of revenues come via residential projects and 22% in commercial/resimercial. It represents a 5% dip from the 2021 Market Research Analysis report, which was also noted to be conducted during the height of the pandemic (also noted were trends from that one such as outdoor technology continue to remain high in demand two years later).
• Median integration company has five employees, with continued high demand for technicians as a big industry challenge. But company size ranges from one-man shops to teams of 20+ staff members. Average number of employees is 11; half (51%) have five or fewer, and 14% employ more than 20.
• Integrators perform a median 30 projects per year, with numbers varying between high-volume smaller jobs and long-term luxury work that may take years. Average here is 55 projects, including 16% of dealers that do more than 100 jobs.
• If you’ve noticed at CEDIA Expo, Tech Summits and buying group conferences, etc., that fewer silver-haired folks are attending, indeed the industry is getting a youth influx. While most integrators have been in business 10+ years, nearly one-quarter (22%) started less than five years ago.
• Within the range of revenues, $500K to $2 million is the sweet spot, with 45% of integrators falling somewhere in between. Average revenue was found to be in the $1.2M to $1.9 million range.
• While average project size is in the solid five-figures as mentioned, 47% are reported as under $20,000 but 25% are above $60,000 – including the “uber lux” integrators who work on some jobs of more than $500K.
• Revenue growth forecast by company size is 9% for dealers that earn $14+ million; 24% for those earning $1M to $4M; and 33% for integrators with less than $1 million in annual revenue.
• When it comes to growth forecast by category, average anticipated growth in lighting/shading (47%), lighting control systems (45%), and security (44%), were the top three. Overall, audio systems (64%) is the most spec’d category currently in projects.
• In perhaps the most surprising data, 62% of integrators say the offer service contracts, with larger dealers leading the way in this important revenue generator.
• Voice control is seeing slow adoption as 70% responded they include it “rarely” (42%) or “occasionally” (28%).

Brand Leaders & Emerging Technology Opportunities

In terms of the Market Research Analysis section on brand data and emerging tech opportunities, the results aligned fairly well with CE Pro’s most recent CE Pro Brand Analysis report, which examines responses by our CE Pro 100. That number is just a fraction of the industry and skews toward the highest revenue integrators.

Companies cited as leading brands in major categories include: Araknis (networking), Control4 (controls), Lutron (lighting control, shade control), Sonos (audio electronics, distribution, and control), Episode (loudspeakers overall), Sonance (audio and media room speakers), Triad (home cinema speakers), AVPro Edge (video distribution), Samsung (displays), Sony (projectors), Screen Innovations (screens), DSC (security – alarm/intrusion), and Luma (security – surveillance/access control).

When it comes to emerging tech, the report reflected one of the key themes we saw at CEDIA Expo: energy management and associated technologies are hot.

The Market Research Analysis found that two-thirds (67%) of dealers now include energy management in their portfolios, and 39% include renewables/battery storage/EV charging.

Wellness tech adoption remains relatively low at 25%, and assistive technologies are being deployed by 20% of integrators.

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