{"id":715,"date":"2014-06-05T10:01:44","date_gmt":"2014-06-05T17:01:44","guid":{"rendered":"http:\/\/droneanalyst.com\/?p=715"},"modified":"2017-01-04T10:26:35","modified_gmt":"2017-01-04T18:26:35","slug":"drones-for-film-and-farm-which-is-the-bigger-market-part-1","status":"publish","type":"post","link":"https:\/\/droneanalyst.com\/2014\/06\/05\/drones-for-film-and-farm-which-is-the-bigger-market-part-1\/'","title":{"rendered":"Film or Farm: Which is the Bigger Drone Market? \u2013 Part 1"},"content":{"rendered":"

This is Part 1 in a two-part series that summarizes my views on why video\/film\/cinema \u2013 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.<\/em><\/p>\n

A total economic impact of $13.6 billion and 70,000 new jobs in the first three years.<\/em> That\u2019s 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 \u201cThe Economic Impact of Unmanned Aircraft Systems Integration in the United States<\/a>,\u201d 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, \u201c\u2026the commercial agriculture market is by far the largest segment, dwarfing all others.\u201d<\/p>\n

These figures get repeated over and over again in the media and across the blogosphere.\u00a0 Existing players and potential new entrants in the UAV market are betting their business futures \u2013 and in some cases their entire family\u2019s income and savings – on them.\u00a0 Everybody wants in on the action.\u00a0 But are the media, blogosphere, and AUVSI reports correct? I have some serious doubt. Here\u2019s why:\u00a0 The numbers from my recent study<\/a> on the impact of Federal Aviation Administration (FAA) rules on the small UAS business say aerial photography and cinema \u2013 not agriculture \u2013dominate the other vertical markets and will continue to do so for some time. This two-part post looks at those two industries \u2013 film making and agriculture \u2013 and attempts to separate market forecast hype from the reality by looking at detailed numbers, market forces, and the specific applications themselves.<\/p>\n

\u201cSurvey says\u2026\u201d<\/strong><\/p>\n

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.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Primary Service or Product<\/strong><\/td>\nResponse Percent<\/strong><\/td>\n<\/tr>\n
Aerial Photography \/ Video & Cinematography \/ Movie \/TV<\/td>\n41%<\/td>\n<\/tr>\n
Sales of sUAS aircraft and\/or technology<\/td>\n11%<\/td>\n<\/tr>\n
Agriculture \/ Farming Services<\/td>\n8%<\/td>\n<\/tr>\n
Mapping \/ Topography \/ Geospacial \/ Photogrammetry<\/td>\n5%<\/td>\n<\/tr>\n
Education and Training<\/td>\n5%<\/td>\n<\/tr>\n
Consulting<\/td>\n4%<\/td>\n<\/tr>\n
Data Aggregation or Analytic Services<\/td>\n3%<\/td>\n<\/tr>\n
First Responder Service (Police, Fire, or Medical)<\/td>\n3%<\/td>\n<\/tr>\n
Utilities<\/td>\n2%<\/td>\n<\/tr>\n
Scientific Research<\/td>\n2%<\/td>\n<\/tr>\n
Construction<\/td>\n2%<\/td>\n<\/tr>\n
All Others<\/td>\n13%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

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.<\/p>\n

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 \u2013 including agriculture – reported. Clearly current UAS market activity runs contrary to the AUVSI forecast.<\/p>\n

Money talks<\/strong><\/p>\n

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.\u00a0 According to this report<\/a>, 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\u00a0makes 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.<\/p>\n

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).\u00a0 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:<\/p>\n