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A school board was scrutinizing a nearly $2 million Verkada deal when a board member asked a question Verkada wants to avoid: would the cameras "brick" if the district stopped paying?
In that moment, Verkada faced a genuine dilemma. Tell the truth and risk blowing up the deal. Or obscure it and move on. Verkada chose the latter.
One of Verkada's most senior and long-tenured sales executives, Mike Schembri, was presenting to the Chico Unified School District board, where the deal was already facing significant opposition.
A board member asked him directly:
If the agreement were severed at any point for some reason, the cameras would brick?
Schembri answered:
Uh, no, not necessarily. They would be just uh the ability to send the stream out, but you would need another VMS to ingest that feed.
Watch:
What IPVM's Testing Actually Found
IPVM tested exactly this scenario. When a Verkada license lapses, the cameras are locked out. Plus, Verkada uses dynamic RTSP addresses that are controlled by Verkada's cloud software Command, and as we documented in How Verkada Locks You Out Of The Devices You Own, Verkada can dynamically revoke those RTSP addresses at any time:
A risk for users, and a benefit for Verkada, is that using a dynamic address they control, compared to the typical static IP address approach in competitor's cameras, is that Verkada can dynamically revoke RTSP access when they want, for example, if the renewal is not paid.
Verkada's own statement to IPVM during that testing was unambiguous in its ambiguity:
Verkada's platform continues to require a license to operate. We currently enforce this manually and on a rolling basis.
And Verkada's email to Verkada camera owners when the license is not renewed is called by them "lockout":
The RTSP Stream Talking Point Is A Documented Sales Tactic
This is not a rogue rep misspeaking. As we documented in Dissension Within Verkada Sales Team Over Viral Lock-In Criticism, Verkada salespeople have been "long told" by Verkada sales and engineering that cameras could be used as "RTSP dumb cameras" on other systems if customers stopped subscribing. When a Verkada dealer discovered this was false, he called it "extremely troubling":
Verkada's local sales and engineering team has long told us and the local customers and prospects that I have been involved with that their cameras could be used as RTSP dumb cameras on other systems should the customer stop subscribing to Verkada. Now, learning that this is not and has not been true, is extremely troubling.
In 2025, IPVM asked Verkada directly and repeatedly for an unambiguous answer on whether RTSP is available without a license. Verkada's response:
Under the terms of Verkada's end user agreement, customers need a valid software license for the products they have purchased to operate within the Verkada platform.
IPVM followed up immediately:
We are not asking generically about the 'Verkada platform', we are asking specifically about using the RTSP out functionality, without a license. Can you please answer this directly? This should be a straightforward answer that any Verkada customer, including us, should be able to get about the products they bought from your company."
Verkada did not respond then. IPVM again this week asked Verkada's VP of Global Communications, Alana O'Grady, for a direct answer or an update. Verkada did not respond again.
Rare Evidence For Routine Tactic
What makes this case unusual is not the tactic. It is the evidence. This exchange only became visible because the deal had already attracted organized community opposition over facial recognition and AI surveillance, forcing Verkada's senior regional sales director onto a public stage. Strip away that opposition, and this is just another closed-door sales conversation. The deception happens. Nobody sees it. The contract gets signed.
The Structural Trap In Verkada's Model
What Verkada calls "lockout," what IPVM and others have called hostage as a service, sits at the center of a genuine tension in Verkada's business. Many people object to the model on a basic principle: if you own something (and Verkada requires you to buy cameras separately), you should be able to use it. Others take the position that, at least if Verkada were upfront about it, buyers could make informed decisions going in.
That second camp has at least a debatable point. The problem is that honesty about lock-in kills deals. Buyers are deeply reluctant to purchase hardware that is remotely disabled by the vendor. Verkada's 1,000-plus-person sales force knows this. So instead of a straight answer, buyers get the RTSP talking point: technically unconfirmed, never explicitly promised, just vague enough to neutralize the objection and move the conversation forward.
Verkada's own chairman, Hans Robertson, was caught on a recording years ago boasting about exactly this dynamic:
You might have bought a 1-year license but you like literally bolted the hardware to your ceiling so like you are not taking it down.
That was not candor: it was an unguarded moment of honesty that Robertson almost certainly did not expect to become public. Since then, Robertson has largely avoided the press and has not addressed the lockout issue publicly. The company's posture has been silence and ambiguity, not transparency.
Kicking The Can To Future Administrators
This school district is only at the start of its 10-year contract, having paid upfront. In a narrow practical sense, the district does not face an immediate crisis. But that is precisely how these situations work. The pain gets deferred, not eliminated. The licenses are non-refundable and non-transferable. The hardware is "bolted", to use Verkada's Chairman's language, to ceilings across schools. And when year 10 arrives, the district will negotiate renewal from a position of zero leverage, with a vendor whose entire business model is built on that leverage.
The Verkada sales team that closed this deal will be long gone by then. The Silicon Valley investors who funded the company will have cashed out. The pain, the price increases, the renewal pressure, and the hardware that cannot be repurposed will fall entirely on the district's future administrators, its future IT staff, and ultimately its students and taxpayers.
This is the heart of the Verkada model. And schools are Verkada's largest market. Public institutions with constrained budgets, limited technical sophistication, and long procurement cycles are exactly the kind of customer for whom lockout extracts the most value over time, and for whom the people who signed the contract will rarely be the ones who have to live with the consequences.
Research Reports
For more, see recent Research reports on Verkada: