Film or Farm: Which is the Bigger Drone Market? – Part 1

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Film or Farm: Which is the Bigger Drone Market? – Part 1

This is Part 1 in a two-part series that summarizes my views on why video/film/cinema – not agriculture and farming — will be the largest driver of sUAS commercial businesses. In this part I explore thoughts on the market for video/film/cinema, and below I outline why I believe film and video will lead in market uptake. In Part 2 I’ll outline why I believe agriculture will lag in market uptake.

A total economic impact of $13.6 billion and 70,000 new jobs in the first three years. That’s the forecast for what drones will bring to the U.S. once regulations are in place, according to a March 2013 market study produced by the Association of Unmanned Vehicle Systems International (AUVSI). The report entitled “The Economic Impact of Unmanned Aircraft Systems Integration in the United States,” goes on to say that precision agriculture and public safety will make up more than 90% of this growth. Most important, the report confidently states, “…the commercial agriculture market is by far the largest segment, dwarfing all others.”

These figures get repeated over and over again in the media and across the blogosphere.  Existing players and potential new entrants in the UAV market are betting their business futures – and in some cases their entire family’s income and savings – on them.  Everybody wants in on the action.  But are the media, blogosphere, and AUVSI reports correct? I have some serious doubt. Here’s why:  The numbers from my recent study on the impact of Federal Aviation Administration (FAA) rules on the small UAS business say aerial photography and cinema – not agriculture –dominate the other vertical markets and will continue to do so for some time. This two-part post looks at those two industries – film making and agriculture – and attempts to separate market forecast hype from the reality by looking at detailed numbers, market forces, and the specific applications themselves.

“Survey says…”

Validated respondents to my survey represent principals and employees at sUAS companies whose annual revenues span from US$100,000 to more than US$10 million. Every significant market vertical is represented. Survey participants were required to identify their primary commercial service offering. The results appear in the table below.

Primary Service or Product Response Percent
Aerial Photography / Video & Cinematography / Movie /TV 41%
Sales of sUAS aircraft and/or technology 11%
Agriculture / Farming Services 8%
Mapping / Topography / Geospacial / Photogrammetry 5%
Education and Training 5%
Consulting 4%
Data Aggregation or Analytic Services 3%
First Responder Service (Police, Fire, or Medical) 3%
Utilities 2%
Scientific Research 2%
Construction 2%
All Others 13%

 

Clearly, the dominant service offering is aerial photography / video / cinematography / movie/ TV (41%). Only eight percent of participants identified themselves as offering or wanting to offer agriculture / farming services.

When viewed through the lens of each service provider type, this data offers some interesting insights. For example, the largest group of service providers, aerial photography and cinematography, have current revenues that spread across the whole range (from zero to over $1 million). In fact, several reported revenue over $10 million, a figure no other group – including agriculture – reported. Clearly current UAS market activity runs contrary to the AUVSI forecast.

Money talks

Drone regulation was among many issues the Motion Picture Association of America (MPAA) lobbied on in 2012 and 2013, at a total cost of $4.11 million.  According to this report, the MPAA has been constantly appealing to the FAA to let them use smaller drones for film-making purposes. If you follow the market dynamics and technical advancements of the TV and film industry, the push by the MPAA for sUAS makes sense. High-end digital cameras and computer-generated imagery (CGI) effects have drastically reduced film-making costs, and have been delivering scenes that weren’t possible before. Even so, the industry is striving for more technological enhancements every day because audiences expect to see something new and spectacular in each new film. The longstanding arms race in Hollywood among studios vying to deliver the most eye-popping shots and special effects continues unabated.

Drone cinematography is now the new kid on the Hollywood block. A drone costing just a few thousand dollars can deliver high wow-factor shots that were impossible to get before, or could only be captured using expensive cranes, stabilizing equipment, and a manned helicopter. The average TV or movie audience member generally doesn’t realize how much of a production is actually shot by a drone, but the astute viewer can already see drone footage being used everywhere in popular TV shows and movies (sorry FAA).  A growing share of Hollywood blockbusters and TV programming involve UAS footage – Oblivion, Man Of Steel, The Hunger Games, The Dark Knight Rises – to name a few. Perhaps the most famous is this scene from the James Bond movie Skyfall:

Drone cinematography is still in its embryonic stage. Multirotor drones that hold cinematography-grade cameras have only a range of up to a mile, and their battery only lasts about 10 to 15 minutes. Still, they give filmmakers a definitive edge over traditional methods. Drones allow directors to pull off mind-boggling, acrobatic camera stunts that would otherwise have been possible only through CGI or maybe not at all. This incredible sense of power and cost savings are the reasons many filmmakers continue to lobby for the commercial use of drones and one of the reason why my research finds this market the largest.  Case in point. The FAA just announced on June 2nd that seven aerial photo and video production companies (not any farming or precision agriculture companies) have requested regulatory exemptions under Section 333 of the FAA Modernization and Reform Act of 2012, which would approve commercial drone operations for TV and motion picture work. This is the first industry to do so on such a scale.  While beyond the scope of this post, the photojournalism industry is another major force lobbying for drone usage, based on similar logic; getting the shot that keeps the audience riveted to the screen while ridding themselves of the enormous cost of operating manned helicopters.

Photography & Video – Film’s nearest cousins

When you look at the ‘film’ market for drones, there is no clear way to delineate film from video from photography.  Aerial photography and video platforms are mostly the same and vary mainly in size, camera-carrying capacity, and technical capabilities that result in each platform being best suited for a certain grade of user (ranging from hobbyist to professional videographer). As I have written in The Democratization of Aerial Photography, technical and financial barriers to entry into the aerial photography, video and film services market are low, so it makes sense there are more players now and there will be more in the future. If a lightweight US$400 GoPro camera can shoot cinematography grade 4K video, and you only need US$1200 to get it up in the air with a small drone, and you can charge a US$1000-$2000 day rate for its use, and audiences are enamored of the resulting images, then it’s no wonder this market is exploding. Besides film and TV, here are some other aerial photography and video-related applications:

  • REAL ESTATE – showcase homes, marquee properties, commercial buildings, and structures
  • LEGAL – support forensic investigations, insurance claims, and property assessments
  • CONSTRUCTION – progress reporting for commercial, residential, and civil engineering
  • LAND – landscape architecture, land development, and research
  • SPORTS – player and team position analysis

That’s my argument for why I believe aerial cinematography / videography / photography will dominate the early sUAS business market.  To put a bow around it all:

  • Studios and audience are enamored of the footage / images that can be captured by drones, so there is clear demand for the final product that drones can create.
  • The financial and technical barriers to entry are low for many applications, making it easy for businesses to begin offering sUAS-based film and photography services.
  • Where the technical and financial barriers are higher (for example, studio quality film production) a technically astute and well capitalized film production industry is eager to get their hands on new technology like drones.
  • A lot of filming occurs in a tightly controlled environment on private property, where safety can be ensured and where a compelling case can be made for regulatory exemptions.

In Part 2 of this post, I’ll make my case for why I don’t think farming and agriculture is largest market. Later I’ll be releasing some research in conjunction with Aironovo Advisors on the economics of UAS in agriculture. As always, I’m interested to hear what you think—share your thoughts in the comments below or contact me colin@droneanalyst.com.

Image credit: Shutterstock

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24 Comments

  1. Michael Torrie June 5, 2014 at 2:33 PM - Reply

    As a farmer who also is interested in UAVs and RC aircraft, I might be able to comment a bit on the usefulness of UAS in agriculture. Basically UAS are and will be useful in farming, but they are not and will not the immediate, revolutionary tools hobbyists on DIY Drones and other places think they are. First there is no substitute for a human being walking the fields, looking at plants up close. A farmer has to know his fields and know the land and soil. I have certain areas that don’t perform well. A drone picture can show these spots pretty clearly, but to determine what the spots are and why they are the way they are will always require an up-close look, and some detailed tests. Perhaps soil tests, or tissue tests. It’s worth noting that remote sensing in agriculture has been around for many years, and companies have been offering agronomic services using satellite photography for a long time. As just mentioned a picture alone is fine, but it needs interpretation, and so far there are no rubric for saying, this pixel value means such and such. Imagery taken from UAS is also similarly hard to interpret. But it’s actually a harder problem than that. Imagery from drones gives you orders of magnitude more data (more pixels) than a satellite image does. So that’s more to pour over and try to interpret, making the problem somewhat harder perhaps. Resolutions are high enough that individual plants can theoretically be imaged at 7 cm resolution. However if you’re looking at a high res field image and you see a dark spot, is that a sick plant, is it a rock, or is it a shadow? Turns out it’s quite hard to make out sometimes, even with many megapixels. Also stitching of images is problematic. Even given the same light, same altitude, same camera settings, a pass across the field in one direction will give you a different shade of green than another direction. All of this I get from a researcher here in Alberta, Dr. Anne Smith. She posted some powerpoint slides from a presentation, though without her narrative it’s kind of hard to understand perhaps. But it is interesting.

    Certainly UAS imagery is a potentially great tool, and it will be more and more useful as the researchers figure out ways of interpreting the data. But it’s not magic, and needs a lot of work yet. And it will be slow (Dr Smith has been trying to come up with ways of interpreting agricultural imagery for years now).

    In the meantime we on our farm plan to buy a turnkey quad copter system and try it out to do some mapping, image crops at different stages, and just have fun with it!

    • Colin Snow June 5, 2014 at 3:01 PM - Reply

      Michael – Thanks for your valuable comments and the link to the slides. As we’re diving more in depth into this we’re finding exactly what you describe – that small UAS are great for spot assessments, perhaps more but that’s TBD. Have fun flying and I look forward to your comments on part 2. – Colin

  2. Peter La Franchi June 5, 2014 at 3:23 PM - Reply

    The article refers to the AUVSI economic study of last year as providing the primary evidence for agriculture. There is a basic problem with the AUVSI study methodology – it took the total arable land area of Japan and divided it by the number of registered UAS performing agricultural roles in that country to provide a demand factor. It then divided the total amount of arable land in the United States by that same demand factor and used this to forecast its prospective future demand for the agricultural sector as a whole. The problem is, the Japanese agricultural land areas do not correlate in size, capacity, or type of agriculture as performed in the United States. In fact the Japanese usage is largely restricted to spraying of rice paddies on small allotments as a replacement for labour which has shifted to the cities. The only possible comparison that the Japanese land area to UAS numbers ratio that could have potential validity is to compare the Japanese ratio with the total amount of land used in rice cultivation in the United States. That is a very different equation than that used by the AUVSI study and can be predicted to give a very different set of economic figures as a result. AUVSI has used very bad modelling to build its argument on, and its figures should be used very very very cautiously. A far better indicator for the agricultural sector in the USA is probably going to stem from the adoption rates for the entire spectrum of technologies we know as ‘Precision agriculture’, and the data for that which is available says that farmers have proven historically slow to embrace its offerings in total, but will pick and choose components. Whether they will pick and choose UAS as part of this remains to be seen, though clearly, one hopes they will.

  3. Nate Schuett June 6, 2014 at 8:46 AM - Reply

    Great post Colin. I agree that aerial photo/video/cinematography will be the biggest market initially. GoPro proved how big this market can be. Agriculture will be slower with adoption, and more likely to be swayed by FAA regulations.

    We’re on our way to #cinegearexpo today in LA, so will be interesting to see what they think. I’ll report back.

    Good stuff, can’t wait for part 2.

    • Colin Snow June 6, 2014 at 8:51 AM - Reply

      Thanks Nate. Look forward to hearing abut the expo. Please do report back.

  4. Vinode Singh Ujlain June 7, 2014 at 10:02 PM - Reply

    I too tend to belive compared to filiming , precision agriculture could be a larger market. My reasons for saying so are following :-
    (a) UAV based cinmetograpgy is an urban phenomenon and equipment would be available for hire. The payload by & large would be a camera. Being available for hire implies, the market is automatically reduced.
    (b) UAV based precision agriculture is spread over large geographical areas that are widely seprated from each other, thus individual farmer will very likley have his own UAV. Further for agriculture , the UAV size could be larger since the payload is not just camera, the possibilities are low flights to carry out pestcide spray or even scatter fertiliser.

  5. […] not agriculture and farming — will be the largest driver of sUAS commercial businesses. In Part 1, I explore thoughts on the market for video/film/cinema, and below I outline why I believe […]

  6. […] – not agriculture and farming — will be the largest driver of sUAS commercial businesses. In Part 1, I explore thoughts on the market for video/film/cinema, and below I outline why I believe […]

  7. […] a primer, you may want to read what I have already written about this market in Film or Farm: Which is the Bigger Drone Market? and The Democratization of Aerial […]

  8. […] a primer, you may want to read what I have already written about this market in Film or Farm: Which is the Bigger Drone Market? and The Democratization of Aerial […]

  9. […] a primer, you may want to read what I have already written about this market in Film or Farm: Which is the Bigger Drone Market? and The Democratization of Aerial […]

  10. […] Film not Farm is the Bigger Drone Market – Part 1 – This is Part 1 in a two-part series that summarizes my views on why video/film/cinema – not agriculture and farming — will be the largest driver of sUAS …… […]

  11. […] Really? The photographic, film, and real estate industries have known for years small UAS are a more viable and less costly substitute for manned aerial photography.  It’s also no secret that this market is already established and towers above all others both in revenue and number of existing service providers (see what I wrote about that here). […]

  12. […] a frenzy of opportunity and activity and a frenetic land-grab. It’s already been observed here that film / photo / video is and will continue to be the largest commercial market for […]

  13. […] Association of America (MPAA) lobbied on in 2012 and 2013, at a total cost of $4.11 million,” according to a Drone Analysts report. “A drone costing just a few thousand dollars can deliver high wow-factor shots that were […]

  14. […] Association of America (MPAA) lobbied on in 2012 and 2013, at a total cost of $4.11 million,” according to a Drone Analysts report. “A drone costing just a few thousand dollars can deliver high wow-factor shots that were […]

  15. […] Association of America (MPAA) lobbied on in 2012 and 2013, at a total cost of $4.11 million,” according to a Drone Analysts report . “A drone costing just a few thousand dollars can deliver high wow-factor shots that were […]

  16. […] GoPro 因为视角独特而流行起来,无人机也是这样。虽然能勘测地形、喷洒农药、也能送货,但有数据表明,有 41% 的无人机被用作航拍。 […]

  17. […]   GoPro 因为视角独特而流行起来,无人机也是这样。虽然能勘测地形、喷洒农药、也能送货,但有数据表明,有 41% 的无人机被用作航拍。 […]

  18. Rent a drone March 4, 2016 at 1:08 AM - Reply

    Excellent Effort to provide way of property drone pictures videos and filming. A market may created on this issue.

  19. […] a frenzy of opportunity and activity and a frenetic land-grab. It’s already been observed here that film / photo / video is and will continue to be the largest commercial market for […]

  20. […] a primer, you may want to read what I have already written about this market in Film or Farm: Which is the Bigger Drone Market? and The Democratization of Aerial […]

  21. […] survey data going back to 2014 and even our most recent report tells us that the film/photo/video market is–and will […]

  22. The Prosumer Drone Will Never Die October 26, 2016 at 3:57 PM - Reply

    […] The Film/Photo/Video market is—and will probably always be—the largest commercial drone market segment. Our survey data going back to 2014 and even our most recent report confirms this. Most analyst forecasts—even at the large firms like Gartner, Teal, and PwC—don’t account for the full potential of drones in that segment, nor do they incorporate any first-hand knowledge from those who’ve already operated in that segment. The photographic, film, and real estate industries have known for years that small drones are a more viable and less costly substitute for manned aerial photography. It’s also no secret that this market is already established and towers above all others both in revenue and number of existing service providers (see what I wrote about that here). […]

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