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BADFF

The Bay Area Drone Film Festival has teamed up with the Know Before You Fly education campaign to welcome a new category to this year’s competition. Festival organizers invite drone enthusiasts and videographers to produce short, creative videos that promote the safe and responsible use of unmanned aircraft systems.

The special category allows the growing community of drone enthusiasts to get involved in airspace safety by uniquely promoting the appropriate practices of their hobby through the festival. The winning video will be featured as part of the Know Before You Fly campaign.

“Drones have opened the door to views and perspectives that we’ve only dreamed of before,” says Clay Coleman, director of the Bay Area Drone Film Festival. “We are promoting drone education and entertainment to the public by showcasing videos that shed light on the diverse views and nature we often take for granted or have never imagined.”

Coleman, who is also an air traffic control supervisor at the Federal Aviation Administration, says the contest will help teach drone users the importance of safety.

“This can be a great way to contribute to the overall safety of UAS operations, and to promote your name as a filmmaker. It really fits with our mission for the festival to reinforce how responsible and enlightening this community can be.”

If you’re interested in submitting a video for competition, it must feature the basics of drone safety and remind prospective users to:

  • fly below 400 feet
  • stay away from emergency responders, people and other aircraft
  • keep at least 5 miles away from an airport unless permitted by air traffic control and airport authorities
  • operate within visual line of sight

Submissions will be accepted through the festival’s FilmFreeway site until Jan. 24, 2016. The screening and awards event will be held at the AMC Mercado 20 in Santa Clara, California, on Feb. 28, 2016.  Visit the Know Before You Fly website or the festival homepage for more information.

About Know Before You Fly

Know Before You Fly is an education campaign founded by the Association for Unmanned Vehicle Systems International (AUVSI) and the Academy of Model Aeronautics (AMA) in partnership with the Federal Aviation Administration (FAA) to educate prospective users about the safe and responsible operation of unmanned aircraft systems (UAS).

About Bay Area Drone Film Festival

The Bay Area Drone Film Festival was created to showcase some of the positive aspects of drone use. A lot of the focus on drones has been negative, but educating the public on the positive ways drones are being used in society will hopefully change the negative perception. One of the best ways to reduce unsafe drone operations and misuse is to increase awareness of safety guidelines and airspace rules that have been in place for a long time.



What the heck is ADS-B and why should I care?

I asked myself that question a year-and-a-half ago, because I kept seeing the term ADS-B (Automatic Dependent Surveillance – Broadcast) come up in discussions and articles on unmanned aircraft traffic management (UTM).

You may have seen it yourself in the UTM solutions proposed by Amazon, Google, PrecisionHawk, and NASA, with NASA trying to coordinate it all.  They all know that someday unmanned vehicles will share airspace at low altitudes with general aviation equipment such as airplanes, helicopters, and gliders. Agreeing on a safe and efficient system that will manage both manned and unmanned traffic is a vital concern for the FAA, NASA, private companies, and academic users.

NASA’s UTM Fact Sheet summarizes the concern that there is currently no infrastructure system in place for UAS flight:

“A UAS traffic management (UTM) system for low-altitude airspace is needed, much like today’s surface vehicles that operate within a system consisting of roads, lanes, stop signs, rules, and lights, regardless of whether the vehicle is automated or driven by a human… Civilian use of UAS has many growing applications: product delivery, surveillance security, agriculture, film industry, mapping and planning, real estate, and search and rescue.”

This was never envisioned when the FAA conceived the Next Generation Air Transportation System (NextGen) for manned aviation, which is due for implementation across the U.S. in stages between 2012 and 2025 and proposes to transform America’s ground-based air traffic control system to a satellite-based one. So, here we are looking for an infrastructure solution to low-altitude flight management, and the mistake may be that we are trying to solve it with an “all-altitude” flight management solution.

Regardless of the origin, all of these system proposals all have one thing in common – ADS-B.   This technology is the key element for the system ‘tracking’ and reporting a drone’s position to other aircraft.

But is it right for all small UAS operating in Class G airspace?

With that question in mind, we conducted an in-depth research study and have just released it: ADS-B and Its Use for Small Drone Traffic Management.

The study is both qualitative and quantitative. The qualitative portion includes information gleaned from academic sources as well business sources — including interviews with aircraft avionic vendors working on ADS-B solutions for all size UAS. Data collected for the quantitative portion study comes from a survey we conducted over the web in August 2015.

The study gives six key insights and seven recommendations. For example, it finds ADS-B is a complex topic that includes a myriad of acronyms (such as “ADS-B” itself), frequencies, and technical concepts. These important details need to be well understood in order to be discussed and adapted.  It also finds the small UAS community does not fully understand the issues of ADS-B “Out” and seems to know very little about how ADS-B “In” works. This insight is supported from the statistics we gathered in our survey.

We also gathered statistics about perceptions of current ADS-B transponders.  Most survey respondents felt current ADS-B units are too expensive, too big, and too heavy – and for the most part, they are right.  Over half had a concern about power consumption – an important issue for small drones since most don’t have a lot of power reserve. To be fair some avionics vendors do have or are working on cheaper, smaller, lightweight units specifically for the small drone market.  They’re also working to solve the power consumption issue.  These vendors are listed in the report.

The study:

  • determines the practicability of using ADS-B for use in small unmanned aircraft systems (sUAS) from the perspective of owners and operators
  • analyzes if ADS-B is the right solution for small drones operating in low-altitude airspace
  • identifies ten major issues with current ADS-B technology that become even more concerning once you start putting transponders on a small drone flying at a low altitude
  • informs about recent innovations, technical limitations, and integration attempts
  • evaluates how well commercial drone service providers and operators understand the issues of ADS-B
  • calls out the traffic management issues that need to be addressed if ADS-B is used and integrated with other alternative technologies

The report is a great primer for those who want to understand the technology and what impact it might have on the commercial drone industry.  It provides fresh information for industry veterans, entrepreneurs and investors, veteran avionics vendors, and drone manufacturers of all kinds. The full text of the report is 37 pages and contains the most salient industry statistics illustrated by 18 figures.

You can find instructions to purchase the report here.

If you have questions about what’s in the report or would like to comment on it after reading it write me colin@droneanalyst.com.

Image credit: Shutterstock

The post Uncertain Case for ADS-B In Small Drone Traffic Management appeared first on Drone Analyst.


These days it seems just about anyone can get an FAA Section 333 Exemption that allows them to legally use small unmanned aircraft systems (sUAS) for commercial purposes in the U.S.  As of October 20, 2015, almost 71% of all Section 333 grants have gone to firms claiming that their primary operation/mission is Film/Photo/Video (and most claim multiple uses).  This includes companies that are using drones for movies, as well as for art and real estate, among other things. Inspection and Monitoring has seen the second highest issuance rate, at 31%, while Mapping and Surveying for land and commercial construction, rounds out the top three at 20%.

Looking further into the data, AUVSI reports that at least 84% — and perhaps as many as 94.5%– of all approved companies are small businesses. While we don’t agree with their astronomical forecast (see our write-up here), we concur with this analysis.

But here’s the catch.  With the bar so low for starting a commercial drone service, what’s the guarantee these businesses will succeed? According to Bloomberg, eight out of 10 entrepreneurs who start businesses fail within the first 18 months. A whopping 80% crash and burn. So given the risk, it makes sense to assess which markets and use cases provide the best chance of success, the skills you’ll need, and the value-add services you should be offering those markets.

Here are five services we think you should consider offering as part of your commercial drone business:

  1. $ – Video
  2. $$ – Mapping
  3. $$$ – Photogrammetry
  4. $$$$ – LiDAR
  5. ??? – Spectral imaging

I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging.  That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture.  Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market.  (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?)

Skill 1 – Video

Now some of you may be wondering why I included video on my list.  We often see drone video footage on YouTube and think it’s cool. But the hard fact is commercial buyers of drone video services have a much higher standard.  So you will, too, if you want to make money in the Film/Photo/Video market.

By now you know shooting good drone video starts with selecting the right drone, the right camera, with the right lens, mounted on the right gimbal.  It’s not a secret any drone enthusiast can go out and buy a DJI Phantom Vision 3 for about $1,200 and shoot 4K video. But just because you can fly it and press the ‘record’ button does not make you a professional aerial videographer.  There is much more to it than that. For one, shooting good video requires you to be skilled in the basics of:

  • Shots (FOV, framing, perspective)
  • Moves (pan, tilt, truck, dolly, etc.)
  • Technique (zoom, action, follow, etc.)

For another, there is timeline editing.  What are you going to do with all that footage?  Hand it to the customer raw?  You could, but it’s better to have it edited or least know how it’s done so you can offer assistance or more services.  For that, you will need to be skilled at:

  • Storytelling / sequencing
  • Cuts
  • Transitions
  • Graphics
  • Lighting
  • Color grading

These aren’t all the things you need to know but if you don’t know these I suggest you get some basic film-school training and offer a better service than the kid next door with a quadcopter and a GoPro.

Skill 2 – Mapping

In researching drones and aerial photography and mapping, you might find yourself coming across new terms. One of the basic ones you should know is “orthomosaic photo” or “orthophotos.”  Orthophotos (aka ‘orthos’) are basically photos that have been stitched together to make a larger one and then corrected.  The technique is not unique to drones.  Orthomosaics have been created by aerial photographers in manned aircraft for years and used by lots of industries.

The point here is if you are not familiar with the techniques and software to create orthos, then I recommend you acquaint yourself with it because it is a valuable service for which customers in the Mapping / Surveying market will pay handsomely. There are even drone apps that automate the whole process like DroneDeploy and Pix4D.

Skill 3 – Photogrammetry

Photogrammetry is a technique which uses photography to measure the environment. This is achieved through overlapping imagery; where the same site can be seen from two perspectives, it is possible to calculate measurements. Again, this technique is not unique to drone imagery, but there is some good news here.  Off-the-shelf software, like Agisoft PhotoScan and SimActive, is plentiful and fairly easy to learn.

The hard part is providing your customer with valuable measurement information.  And the harder part is competing with firms that have been offering this service for years now using ground-based systems combined with aircraft.  For this, you will need some specialized skills and will need to be certified so that you are recognized. One way to get certification is through the American Society for Photogrammetry and Remote Sensing (ASPRS).

An ASPRS Certified Photogrammetrist is a professional who uses photogrammetric technology to extract measurements and make maps and interpret data from images. The Photogrammetrist is responsible for all phases of mapping and other mensuration requirements, which include planning and supervising survey activities for control, specifying photography or other imagery requirements, managing projects for mapping or other mensuration requirements and interpretation. You can find more information on their programs here.

Skill 4 – LiDAR

LiDAR drones are fairly new as the units have become smaller and lightweight.  But LiDAR is not new to surveyors and engineers.  They’ve been using ground-based and airborne LiDAR scanning units for years.

The good news is LiDAR drones are great for scanning small areas like building sites and getting in hard-to-reach areas like under bridges.  In this way they provide a significant cost advantage over aircraft or helicopters with LiDAR units and have the greatest margin potential as a service for the Inspection / Monitoring market.

You can get trained and become a Certified LiDAR Technologist (CLT) through ASPRS.  A CLT is technician who performs routine LiDAR collection support and first-level data processing integrating established plans and procedures.  Find information on that here.

Skill 5 – Spectral Imaging

I put this here last because, as I mention earlier, it’s not clear whether drones provide a significant cost savings to the buyer vs. the same service provided by manned aircraft for the Precision Agriculture market.  There are ROI studies being done now, but most people who provide this service will tell you that farmers aren’t willing to pay much for this service.  Why spend $4 to $5 per acre for you to fly a drone overhead and deliver a normalized difference vegetation index (NDVI) map unless there is a clear return on that investment?  Some will – like growers of high-margin crops like fruits and nuts – but most won’t. Again, this is a competitive market that demands a lot of knowledge about precision agriculture and remote sensing techniques.

I would to hear your thoughts on these skills.  Send me your comments or write us colin@droneanalyst.com.

Image credit: Shutterstock

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BY TERRY DUNN

Details of the upcoming regulations are scarce–nonexistent, actually.

Terry spent 15 years as an engineer at the Johnson Space Center. He is now a freelance writer living in Lubbock, Texas. Visit his website at TerryDunn.org and follow Terry on Twitter: @weirdflight

At a press conference held earlier today, the US Department of Transportation (DOT) announced that it is planning to implement a requirement for all operators of Unmanned Aircraft Systems (UAS – a.k.a. “drones”) to register their aircraft in a national database. Even hobbyists will be subject to the requirement. Secretary of Transportation Anthony Foxx made this announcement while sharing the stage with Administrator of the Federal Aviation Administration (FAA – a branch of the DOT), Michael Huerta, as well as leaders from various drone advocacy and commercial aviation organizations.

FULL ARTICLE >>

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We have launched a new 10-question research survey on unmanned traffic management technology to get your opinions about ADS-B solutions for small drones.  You can take the brief survey here:  https://www.surveymonkey.com/r/DBRH89H

Here’s the background: The technology for tracking small unmanned aircraft system (UAS) has advanced rapidly in the past few years.  New and disparate solutions all claim great promise.  Most of these solutions are based on the use of automatic dependent surveillance-broadcast (ADS–B), a cooperative surveillance technology in which an aircraft determines its position via satellite navigation and periodically broadcasts it, enabling it to be tracked by ground control station. ADS-B signals can also be received by other aircraft to provide situational awareness and allow self-separation.

While ADS-B is a cornerstone of next-gen air traffic modernization and integral to NASA’s Unmanned Aerial Systems Traffic Management (UTM) plan, some civil aviation groups like the Aircraft Owners and Pilots Association (AOPA) say the high cost of the necessary avionics and the lack of direct benefits are the two greatest barriers to adoption.

This research invites a discussion about the role ADS-B plays in integrating civil UAS with the National Airspace System and its effect on commercial use of UAS.  It seeks to determine if ADS-B is the right solution for small UAS operating in low altitude class G airspace.

The resulting research study will answer the following key questions:

  1. What is ADS-B, where is it mandatory, and what are the adoption rates for manned aircraft?
  2. What new solutions or solutions under development do and do not incorporate ADS-B as part of their technology for UAS sense and avoid?
  3. What are the advantages and disadvantages of ADS-B for commercial use of small UAS in U.S. Class G airspace?

Image credit: Boeing AERO

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By Jonathan Rupprecht, Esq. for Drone Analyst

In response to the rapidly growing drone industry, there are now many attorneys and law firms that are seeing an opportunity to make money and are offering drone legal services as a part of their regular practice areas.  Although many of these attorneys and/or firms may have experience in their regular and specific legal fields, they most likely are just trying to get into this new legal field area (“get their feet wet”) by offering a new drone practice group with drone legal services. How can you find an experienced drone attorney that will best serve your drone legal needs as opposed to an attorney who is just trying to dabble in the drone area? Here are five tips to find an attorney to best help with your needs:

1. Find out how many 333 petitions the attorney has filed.

Many attorneys are starting to come into this new legal field. Some of those attorneys have no aviation law knowledge or section 333 experience. If they don’t have any experience, this could cause some problems.  One example is where an inexperienced attorney might charge you more for a petition so they can learn how to do it or to get experience. Another example is that an inexperienced attorney might not be able to rapidly file your 333 petition which means your wait is longer until you can commercially operate.

2. Find out how many of the attorney’s clients are commercially operating now after they received their 333 petition.

This is helpful because it tells you that the attorney has taken a client all the way through the 333 process and the drone registration process. Also, ask for the names of their previous clients who have been approved and are commercially operating. Contact those clients and ask them for their opinion of the attorney and whether they would recommend that attorney.

Another benefit of using an attorney who has clients who are commercially operating is that the attorney is familiar with the “real world” problems commercial operators face, such as the 24-hour NOTAM problem, the 500ft bubble from non-participants, flying within 5 nautical miles of an airport, or flying under the Class C or Class B shelf.

Are there any benefits to using an attorney new to the area? A new attorney might perform exceptional services so that they can get their feet wet and make a name for themselves in the industry. If they are desperate to get experience, you might get a great deal for an exemption. Also, some attorneys new to drone law are very skilled in other areas of the law which you might need help with such as business or tax law.

3. You should find out what the costs will be.

The fees of different law firms range all over the place. The general range of prices I’ve heard of is between $2,500 and $12,000 per petition. Larger law firms sometimes charge more than smaller law firms. Partners charge more than associates. Check out the location where the law firm is located because law firms in fancy buildings have higher overheads costs than firms in more modest buildings. You, not them, are paying the rent for the location.

If they provide you a cost estimate, ask them to break the hours down and also ask them about what they used to arrive at the estimated number of hours. It is a good idea here to get a fixed cost and not have the attorney bill you at an hourly rate which could turn into a black hole for your money. That being said, if you are asking for something that has never been done before, or is a really complex and difficult situation, you are most likely only going to have the option of the attorney billing you hourly.

If the cost is out of your immediate price range, ask them to split the payments up so you don’t have one lump sum. You could maybe negotiate the contract so that 1/3 of the cost is up front, 1/3 is before submission, and 1/3 is upon the petition being completed. You could also ask for a money-back guarantee.

4. Ask who is developing the manuals?

The FAA looks at the manuals you submit for the aircraft and operations to determine if there is an equivalent level of safety as the regulations. Are you going to create the manuals or is the attorney? Some attorneys do not do manuals. This is understandable because they did not go to manual school but law school. Does the attorney have a referral source who can do manuals for you in case you do not have the knowledge to do them? What are those costs?

Also, the FAA is requiring that petitioners asking for closed-set TV/movie filming operations will be required to submit to the FAA a Motion Picture and TV Operating Manual (MPTOM). Does your attorney even know what an MPTOM is or where to get one? Your attorney should explain the benefits of having closed-set TV/movie operations on your exemption and also define what “non-participant” means.

5. Do they have an aviation background?

Finding a good attorney in the area of drone law is not just about getting the 333 petition filed for the lowest price but is also about complying with the federal aviation regulations. A good attorney needs to understand your long-term goals of actually operating under the regulations. Your attorney needs to see the potential problems with your proposed commercial operations and help you decide whether to change your business operations/model or scrap the idea altogether. In one of the Abbot and Costello movies, Costello was asked, “Was your business legal?” His response was, “Better than that. It was profitable!” A good drone attorney can help you be legal AND profitable because they know the aviation sector and how to navigate the regulations.

Another problem with using an attorney that does not know aviation law is that they will most likely not be able to rapidly answer the questions YOU need answered so that you can make money. The attorney will have to do research to give you an answer because they are unfamiliar with the regulations or restrictions. You want an attorney who you can call or text who can rapidly give you answers regarding commercially operating under your exemption. Who better to do that than the individual who also filed your petition and helped you in determining the most economically feasible area?

It is best to do your research before hiring a drone attorney. Hopefully these tips should save you time and money when searching for the right attorney who can help serve your specific drone legal needs.

If you have questions about this or the commercial drone market comment below or write us info@droneanalyst.com.

 

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[UPDATE: The report has been updated to include the latest FAA statistics]

I just released a new research report.  It details the state of the commercial drone industry in the U.S. as of the end of September 2015.  It looks at recent innovations, business applications, key ecosystem companies, and market forecasts. It analyzes the business impact and market opportunities that proposed Federal Aviation Authority (FAA) rules have on unmanned aircraft systems (UAS) manufacturers, distributors, service providers, and investors.  The 34 page report is a great primer for those who want to take advantage of the coming boom in this potentially lucrative industry.  It provides fresh information for industry veterans, entrepreneurs and investors, career changers/advancers, and corporate personnel in all industries. The full text of the report contains the most salient industry statistics illustrated by 12 figures and four tables.

Included in the report are the following:

  • A primer on commercial drones that discusses common terminology and the distinctive nature of commercial drones as aircraft systems and Internet of Things devices.
  • An outline of the growing number of commercial applications for drones, with categorization into major market segments for easier consumption and further analysis. We discuss the growing interest in commercial drones, what forecasters say about future demand, and what investors are banking on.
  • An overview of the industry’s flourishing ecosystem of businesses that support commercial drone activity. We present a few of the most prominent firms and companies that provide legal services, insurance, flight readiness applications, and training.
  • A detailed discussion of the fluid state of FAA restrictions on commercial UAS operations in the U.S – including the FAA’s proposed rules for small UAS. We also discuss the growing complexity of state and local issues, the current state of private sentiment and legal concerns, and the impact of proposed FAA rules. It shows that some markets are winners, but some are bigger winners than others. We report on the important details and determine the success factors in each market.
  • Statistics on commercial drone use. We compare the number of drone operators by country, the manufacturers who have the most aircraft in U.S. commercial operations, and which market segments are shaping up to be the biggest.

In the final section of the report you’ll get a glimpse of the future.  I present a list of several firms in Silicon Valley and across the U.S. that either have, are incubating, or are working on innovations that will solve the complex problems of UAS integration into the national airspace.

The report is available for purchase here.

If you have questions about what’s in the report or would like to comment on it after reading it write me colin@droneanalyst.com.

Image credit: Shutterstock

 

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This post also appears in The Market section of sUAS News.

—–

Have you noticed the growing number of market forecasts for the commercial drones industry?  I have.  Not a week goes by that a new one doesn’t hit my radar.  I’m currently tracking about 15.  Each in one way or another delivers growth projections for the drone or unmanned aerial system (UAS) sector that are nothing short of phenomenal.  But are they, really?

In this post, I’m going to share three secrets to help you understand forecasts better, unpack the hype and diversity of market reports, and hopefully leave you skilled enough to ‘cry foul’ when you see a new report that is, well, questionable. At the end, I’ll give you my personal take on the most popular forecast reports.

THREE SECRETS

  1. All forecasts are wrong

No one argues that forecasts and market projections are a critical part of business planning, management, and strategy.  However, the first thing you learn as a forecaster (I was one) is that forecasts are always wrong – it’s just a matter of how wrong. You also learn that the further out in time you forecast (1 year vs. 10 years), the greater the error. And while that might sound gloomy, it is reality, and if you are looking to start or invest in a commercial drone business and you are relying on these forecasts, you should recognize an important trap.

Proper forecasts are created by taking actuals (historical unit sales, purchases, revenue, etc.) and projecting forward in time some kind of trend – either flat, up, or down. Statisticians know that the more historical data you have the greater likelihood your projection will be accurate. But what happens when there is no history to go by?  Such is the case with the commercial drones market.  It’s a nascent industry, and we have little to no historical data.  So here’s the trap. Forecasters have to either borrow historical data from a similar industry or size a market potential with a proxy.

But sometimes the proxy is wrong. Such is the case with the Association of Unmanned Vehicle Systems International (AUVSI) The Economic Impact of Unmanned Aircraft Systems Integration in the United States. It has become the most repeated forecast for the commercial drone market, garnering media attention typically reserved for celebrity weddings and babies born to royalty.  Its bottom line forecast is that the UAS market will reach a whopping $82 billion in the 10 years after the FAA issues favorable regulations and that the precision agriculture market will “dwarf all others.” But as we’ve dissected in Five Reasons the AUVSI Got Its Drone Market Forecast Wrong (and subsequently here and here) the proxy, the methodology, and the conclusion is wrong – very wrong.

That’s sad — and a big disservice to the community. Venture investors have a huge variety of questions about the commercial drone market, but two questions stand out in terms of their importance.  The first is: What is hype and what is reality?  The second is: Is this market really a big, high-growth, high-margin market?  If you rely solely upon media hype and AUVSI, your answer would be an unequivocal Yes. The commercial drone market is the biggest, highest growth, best new market opportunity to come along in decades (or maybe centuries…). Really?!

  1. Regulations raise uncertainty

In some markets, traditional forecasting methods just don’t work. Such is the case with the regulated markets. Commercial drones are and will continue to operate in a regulated market – regulated not in the sense that governments are setting price floors or ceilings, but rules that allow or disallow certain commercial activities – like what airspace you can operate in and whether you can operate beyond visual line of sight (BVLOS). (For more on the BVLOS issue see article here.)

Even so, the global drone industry has not sat back waiting for government policy to be hammered out before pouring investment and effort into new ventures. The latest data from CB Insights shows drone startup funding is hitting new highs. Firms have raised more in 2015 than the last three years combined.

The problem is many of those funded vendors are beginning to invest in drone technology (like BVLOS automation) which may take years to be legal. Additionally, some investment is in consumer drone manufacturers that may want to aggressively target specific commercial sectors through acquisitions, internal development, partnerships, and second-tier investment but do so without regard to an actual intended commercial product and/or application. It looks good in a headline, but the devil really is in the detail, as I have noted in FAA Proposed Drone Rules: Market Opportunity Winners and Losers.

  1. Some segments are indistinct

With the advancement of model aircraft and camera technology, it’s not easy to distinguish between a consumer drone and a commercial drone.  For example, low-cost camera drones like the DJI Phantom 2 Vision+ and 3DR IRIS+ are sold as consumer products, but marketed to and purchased by professionals who use them for commercial purposes like aerial photography, film making, and videography. Add to this trend the growing number of vendors like Pix4D that provide integrated software specifically for mapping and modeling, and now you have surveyors and geographic information system (GIS) professionals using them in their practices.

So what’s the buyer of a market forecast to do? The report says “commercial” but how can they distinguish the size of the particular market you intend to service or invest in if so many drones are sold for hobby but then used for business? Sorry, I don’t have a happy answer for you. It’s virtually impossible in every case to delineate the difference between the consumer and commercial drones market. If you want to come close a rational number, then you are going to have dissect the numbers yourself and make assumptions about your market based on things like gating factors that drive adoption rates, competing technology, and the price elasticity of incumbent providers. You can factor aircraft sales, but I wouldn’t use it as the base for a market forecast.

THE ROUNDUP

Here’s my take on the most popular forecasts. Note that several of these are sold by resellers.

BI Intelligence – has a 32-page report for subscribers (~$400) that forecasts total cumulative drone spending over the next 10 years (2015 to year-end 2024) of $111 billion. It also forecasts that $15 billion of that will be spent on commercial/civilian applications, including R&D costs, software, and hardware. But looking into the numbers it basically recycles AUVSI’s bogus numbers and then ups the Teal Group’s already inflated (and out of touch) forecast.

ABI research – has a research report available to subscribers that says the small UAS market will surpass $8.4 billion by 2018 and by 2019 the commercial sector will dominate the overall small UAS market with revenues exceeding $5.1 billion, roughly five times larger than the prosumer/hobby market, and 2.3 times greater than the military/civil market segment. I respect the work of this firm, but as you can see from the graph in this article they consider prosumer as part of hobby and not commercial as would be relevant. Still, I agree with Dan Kara: “The money to be made is actually in the application space to a large degree.”  So why don’t they forecast that as a segment of commercial?

Markets and Markets – sells a 180+ page report on the commercial drones market by type, technology, application, and geography for $4,560. They expect the global market for small UAS to reach $1.9 billion by the end of 2020. They state the obvious and say the increase in civil and military applications remains the driving factor for the global small UAV market. They go on to say that among all the key applications (law enforcement, energy and power, manufacturing, infrastructure, media and entertainment, agriculture, and scientific research) law enforcement will hold the largest market share at ~25%. My research says the opposite it true – at least in the U.S. That’s because adoption by local and state police agencies here already is and will continue to be fraught with controversy over privacy and Fourth Amendment rights.

Idate Research – sells a $2,300 54 page report with a forecast covering 2014 to 2020 for commercial and consumer drones. They predict that once a suitable regulatory framework is introduced and no significant disruption takes place, nearly 170,000 commercial drones will be operating across the globe by the end of 2020, alongside about 12 million hobby drones.  It’s hard to tell how they arrive at these numbers since their methodology is primarily qualitative, e.g., obtained from one-on-one interviews and not quantitative or established by cross-referencing public sources and external databases.

Lux Research – has a report available to subscribers that says the commercial UAV market will grow to $1.7 billion by 2025 but will be held back by regulations.  It also says that agriculture tops applications and will generate $350 million in revenues in 2025, led by uses in precision agriculture. It envisions utilities to be the second biggest segment at $269 million, and oil and gas third at $247 million. Right off the bat you can discount their numbers since it’s been established over and over that agriculture will not lead the market. Clearly they have not researched thoroughly this or other markets like GIS. Also, their overall number is quite low. DJI is projected to sell above $1 billion in consumer drones in 2015. Given the market tendency for these to be used commercially you can see their 2025 number is not rational.

FINAL THOUGHTS

As you can see there is a wide disparity of assumptions and time horizons – which is why I didn’t create a comparison table.  And you can see some of these reports are quite expensive. Will you get an ROI from them?  Perhaps. But in some cases the best advice may be that of Will Rogers: “The quickest way to double your money is to fold it in half and put it in your back pocket.”

I would to hear your thoughts on these market forecasts.  Send me your comments or write us colin@droneanalyst.com.

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