Do you get calls for support? I ask because i realize that some companies do $100-1000 TV installs all day long 5 days a week and they never hear from their customers again until they need a new TV installed. Obviously if no one ever calls you for support then you probably don't need to bother with service contracts. HDMI cables and TV mounts rarely fail once they are installed.

If you provide more complex systems that fail and cause clients to call you for support then you should be selling a service contract. Everything on this planet gets a "do you want the extended warranty" nag screen when its scanned at checkout. These are basically service contracts.

Service contracts are not just about handling calls about system failure. They should also include once or twice a year system check-up visits where you test everything and get a chance to sell your client new stuff. Every time i walk into an old project i immediately get hit with questions about a dozen things they have been wanting to do for a year but because they are busy they dont bother asking about it.

There is no risk as long as you dont make your service contract a magic ticket. If a projector or control processor fail outside of manufacturer warranty that doesn't mean you replace it for free. Sell them a new projector or control processor. Have your service contract cover a check-up site visit or two plus a block of labor hours at a discounted rate to cover emergencies. You can offer teired support. Demanding "fix it now" clients might have no problem paying you $2000 a year more as long as you will come out and get their stuff working. Other clients may be fine with waiting till monday and paying less for the service contract.

Some people will buy it. Others wont. Those who dont may never need you...but when they do...bill them full boat and offer them the service contract again to see if they learned their lesson.