Taser Looks Beyond the Stun Gun to Cop Cams

That was the dare Taser International laid down at the Consumer Electronics Show in Las Vegas in 1998, and hundreds of people lined up. Taser, today the stun gun supplier to America’s police, was still struggling back then, and auto theft in the U.S. was epidemic. In a bid to diversify, Taser built a steering-wheel lock that shocked anyone who tried to remove it without a key—anti-theft technology with a touch of dark justice. The Auto Taser Challenge dared the gadget-show attendees to hold on to the activated device as it sent up a shivering blue arc of electricity.

Most people released the device “in a fraction of a second,” recalled Steve Tuttle, the longtime Taser spokesman who helped design the stunt. The Auto Taser won the show’s innovation award and a lot of admiring press.

Then it flopped—and nearly wiped out the company.

In the past two decades, Taser has tried again and again to come up with a hit to rival its namesake sidearm. New products have included stun guns that look like shotguns and fire electrified pellets; computer-monitoring apps for parents; electrified land mines; laser sights for its signature gun; and a purse-size stunner for personal use, marketed as the Lady Taser. None has made it.

Now Taser has one more chance to reinvent itself—by putting a camera on the cop.

The company suddenly finds itself well-positioned to answer a newly urgent call for transparency in policing, while at the same time cutting its reliance on electric-shock technology, by becoming the preeminent provider of wearable cameras for officers.
The U.S. Department of Justice last week said it would spend $75 million over the next three years on 50,000 wearable cameras for law-enforcement agencies across the country.

Taser already sells a camera, called the Axon Flex, that can be mounted on an officer’s sunglasses, with video uploaded to Amazon Web Services. Last week it clinched a deal to outfit the British Transport Police with cameras. On Tuesday, it announced it would acquire MediaSolv Solutions, which provides video technology for police interview rooms, closed-circuit TV, and in-cruiser cameras.

If Taser’s chief executive, Rick Smith, can replicate with body cameras the success he has had with stun guns, he’ll have found a way to tap a deep, fresh source of revenue—and distance the company from a history of expensive legal action. If he blunders again, Taser will remain at the mercy of those lawsuits and lose a critical new market to the competition.

This time, Smith has a secret weapon: the cops. Long a trusted vendor to thousands of police departments across the country, Taser is poised to dominate the body-cam market by relying 0n the strong relationships it has forged with them, he said. According to data the company provided, its weapons are used by 89 percent of the roughly 18,000 police departments in the U.S.

“The Taser is something that really resonates with the individual officer more than, you know, their uniform or even their body armor, because it is such a huge change in the way they do their job,” said Smith, 44. “I mean, I get hugged by police officers when we go to conventions. They will come up, and they’ll say, ‘Thank you. I didn’t have to kill somebody last week.’ ”

The call for police to wear cameras on the beat was renewed last summer when 18-year-old Michael Brown, an African American, was shot and killed by a white police officer named Darren Wilson in Ferguson, Mo. After a grand jury declined to indict Wilson in November, President Barack Obama proposed a three- year, $263 million spending package, including the police body cameras. Last week’s news turns the president’s proposal into a funded program.

Since Ferguson, a rash of deadly encounters with the police has scarred Staten Island, N.Y., North Charleston, S.C., Tulsa, Cleveland, and Baltimore and brought the relationship between blacks and cops to a crisis. In Staten Island, Eric Garner died partly because of a police chokehold after repeatedly pleading, “I can’t breathe,” all of it caught on video by a bystander. In North Charleston, an onlooker recorded an officer shooting Walter Scott as he fled unarmed; the argument for police cameras suggests the cop might have made a different call if he had been recording himself.

Maybe. But in Tulsa, it was a camera mounted on an officer’s sunglasses that recorded deputies subduing Eric Harris even after one of them had fatally shot him—apparently mistaking his gun for his Taser. The video includes Harris, his head pressed to the pavement beneath an officer’s knee, screaming, “Oh, God, he shot me,” and saying, “I’m losing my breath.” A deputy says, “F— your breath.”

Taser is already benefiting from the national demands for transparency, which have been building for years. In last year’s fourth quarter, when Obama made his proposal, Taser’s Axon revenues were $6.4 million, a 159 percent increase from a year earlier. This year, Taser’s body camera sales were up 288 percent in the first quarter from a year earlier. The company’s shares, which have been on a tear since August, ended at a 10- year high on Friday after the Justice Department announcement.

Smith likes the body-cam math. The U.S. has more than 461,000 sworn local police officers, according to the Bureau of Justice Statistics, plus another 120,000 full-time law enforcement officers employed by the federal government. If only half of those 581,000 officers purchased the Axon Body—Taser’s least expensive on-body police camera, which attaches to an officer’s uniform and retails for $399—Taser would reap almost $116 million in sales, more than double its total $54 million in 2014 revenue.

If those officers went instead for the Axon Flex, Taser’s $599 camera that mounts on a pair of sunglasses, sales would be closer to $174 million. Not to mention sales of replacement devices and fees to store all the video being recorded by those devices on Taser’s cloud storage site, evidence.com.

Of his rivals in the market, Digital Ally and Vievu among them, Smith said Taser is the best body-cam partner for law enforcement agencies, which are themselves under the constant threat of lawsuits. “They’ve said, ‘Oh yes, Taser, they’ve been through the fire. They know what it’s like. They know how we get criticized,’ ” he said.

Smith founded the company in 1993 with his brother, Tom, and father, Phillips, after they licensed the technology from a former NASA scientist. “The country was spending something like $100 billion a year on injuries related to firearms, and there were 35,000 people shot and killed every year,” Smith said. “We thought, if we can make a dent in that problem, we can create something of great value and something we can all be proud of.”

In late 1998 and early 1999, after years of struggling to make a profit, and after the Auto Taser debacle, Taser inked its first three deals with police departments, one in Sacramento, Calif., and two in Florida. More sales followed, and a Nasdaq initial public offering of stock came in 2001. Over the next three years, revenue increased sevenfold.

Then, in July 2004, the New York Times ran a front-page story questioning claims by Taser that its stun guns were “nonlethal.” Three months later, CBS News released the results of a yearlong investigative report that said getting shocked by a Taser could, in fact, be deadly. Those reports mentioned at least 50 cases in which someone Tasered by police died soon afterward. That same year, Amnesty International released a report that accused Taser of contributing to violations of “international standards prohibiting torture or other cruel, inhuman or degrading treatment.”

In Taser’s 2003 annual report, the company cited six cases of open litigation against it, two of which involved the deaths of people who were shocked with Taser weapons. Two years later, in 2005, it listed 56 cases of product liability alone, 31 of which alleged wrongful deaths. That winter, the Securities and Exchange Commission began an informal inquiry into the company, which had told shareholders its weapon was “nonlethal.” From December 2004 to September 2005, when the SEC formalized its investigation, Taser’s stock price dropped 80 percent.

Taser said fatalities tied to its devices were the result of drug use by suspects in custody, preexisting health conditions, or misuse by police officers who failed to follow its training. The SEC eventually dropped the matter.

Personal injury lawyers did not. John Burton, a Pasadena attorney who specializes in allegations of police misconduct, filed his first lawsuit against the company in 2006, and Taser was hit with a $6.2 million product liability judgment in the death of 40-year-old Robert Heston. In all, Burton has been a part of at least eight lawsuits against Taser, including one this year. Bound by confidentiality agreements tied to settlements with Taser, he said, he cannot disclose the outcomes.

In 2007, an unarmed Polish immigrant, Robert Dziekański, died after being shocked with a Taser at Vancouver International Airport, spurring a Canadian government inquiry into Taser safety and use by the Royal Canadian Mounted Police. In the face of the lawsuits and the inquiry, which found that Taser’s weapons could kill, Taser finally admitted as much.

In 2009, the company added a product warning instructing users to “avoid targeting the frontal chest area near the heart to reduce the risk of potential serious injury or death.” It changed its advertising to “less lethal” from “nonlethal.” It is still fighting off suits claiming that its weapons are far deadlier than it says they are.

So far hundreds of lawsuits alleging wrongful death or serious injury have resulted in tens of millions of dollars in judgments against the company, although many of the awards have been sharply reduced on appeal. Taser’s most recent annual report notes that the company is currently named in 12 wrongful death lawsuits. “We may face personal injury, wrongful death and other liability claims that harm our reputation and adversely affect our sales and financial condition,” the report reads.

As the legal claims mounted, Taser began to develop what it called the Taser Cam, a little video recorder that attached to the muzzle of a Taser and started recording whenever the trigger was engaged. If the company and its police customers could prove how they were using the stun guns, the theory went, they could better defend themselves against allegations of misuse. The flaw, said Smith: The Taser Cam couldn’t capture the 30 minutes leading up to the trigger pull. It failed.

So the company split the camera from the device. By 2012, Taser’s camera project had produced the Axon Flex. It was well received. A lawyer for the American Civil Liberties Union called the Axon system “the next technological revolution in law enforcement.” But police departments weren’t wild about outfitting officers with cameras that cost as much as $600 apiece, and sales flagged.

Now interest in police-cams is keen—and Taser isn’t the only company chasing it. Dashboard cameras have been standard in police cars since the early 1990s, and the companies that make them have the sort of close relationships with local police departments that Taser does. Digital Ally, of Lenexa, Kansas, started selling body-mounted police cameras in 2009, though they are more expensive than Taser’s top-of-the-line camera—Digital Ally’s FirstVu is $795—and Digital Ally is a smaller company. Its revenues were about $5.4 million in the fourth quarter, and between 2013 and 2014 it operated at a loss for all but one quarter.

Seattle-based Vievu, on the other hand, has been in the body-cam market about five years longer than Taser. Vievu CEO Steve Ward was a Seattle police officer before becoming head of domestic marketing for Taser. He left the company in 2007 to start Vievu. Taser sued, accusing Ward of stealing company secrets, and the case was settled.

Body-cams are Vievu’s sole focus. Its top-of-the-line model, Vievu², clips to an officer’s uniform and includes a monthly fee for storing recorded police interactions on cloud- based servers. At $349 apiece, it’s cheaper than both of Taser’s offerings. Vievu has sold more than 44,000 body-worn police cameras in eight years on the market; Taser, about 20,000 in three years or so. Ward acknowledged Taser’s valuable relationships but said that as a former police officer, he knew better how cameras can serve cops.

As Taser moves further into the wearable-camera market, its best bet may be to study its Auto Taser wheel-lock playbook and do the opposite.

Taser “put almost 100 percent of our energies into building Auto Tasers,” said Smith, then, as now, Taser’s CEO. It spent millions of dollars and nearly two years developing the product. By 1999, the Auto Taser was available for sale in the Sharper Image catalog and in auto security stores.

But there was a long lag between CES in 1998 and the product’s launch more than a year later, which Smith attributes to production setbacks. He called the CES demo “a total smoke- and-mirrors act” and said the product wasn’t ready to be sold to a mass market.

The delay doomed the Auto Taser, he said.

The company was on the verge of bankruptcy. Smith’s father, an entrepreneur like his son, believed it could recover. As Rick Smith recalls, the company was $2 million in debt to Silicon Valley Bank, and his dad had about $500,000 remaining in liquid assets.

“He said, ‘I’m going to put the $500,000 in and then convince [another investor] to match me,” Rick Smith said. “ ‘So you’ve got $1 million to figure out how to turn this thing around.’ ”

He did. Taser International is now the only major company in the world that sells stun guns to police departments. Its string of failed products suggests the company can run into trouble when it steps away from that core market.

“The most powerful thing we have isn’t our patents or knowing how to make these electric guns,” Smith reiterated. “It’s this relationship we’ve developed with all these police departments where they have come to trust us.”

Burton, the Pasadena lawyer, puts it differently.

“You have people dropping dead all over the country after being hit with the things,” he said. “What does that say to you? It says to me they’re dangerous.”

Burton, 62, said about half of his cases now include Taser International as a defendant. In his most recent case, a 50- year-old actress named Angela Jones was approached by police on an Encino (Calif.) road in June 2012 while sitting in her car, which was illegally parked. She offered to drive on. The officers conducted a field sobriety test, which she passed. Then they said they wanted to check her background and asked to see her purse.

In a video of the interaction taken by a dash-cam in the cruiser behind her car, Jones responds, “I just don’t feel like I want you to take my purse from me,” and gets back into her vehicle. As she reaches for the door to close it, one of the officers deploys a Taser, striking her in the chest. The video shows brake lights flashing and then stillness; Jones had gone into cardiac arrest. After more than four minutes, officers dragged Jones out of the car and performed chest compressions to revive her. But the lack of oxygen to her brain during those minutes caused a permanent hypoxic brain injury, and she could have been killed, Burton said. He filed a federal civil product- liability lawsuit on Jones’s behalf in January against Taser and the State of California, among others.

“You can’t generalize these cases. You can’t say that all the people who are killed with Tasers are all fat, they’re all on drugs, that they all have preexisting heart conditions,” Burton said. “You have all these people who get hit in the chest with a Taser shot and then have cardiac arrest. For years, this company has sat there and denied this could happen. They admit it now, but it’s too late. These things are everywhere now.”

He added: “And this is the company that’s going to bring transparency to the police world?”