Film or Farm: Which is the Bigger Drone Market?

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.

Regarding the AUVSI's forecast for the Ag market there is a comment on my post that I will repeat here:

"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."

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Comments

Project Nadar June 6, 2014 at 6:03am

My opinion is that agriculture only uses drones because it saves money. Using a drone for motion picture it's a chapter on it's own. I do believe that the savings generated from drones on agriculture will come to an end at some point so this market has a limitation on it's development. Motion pictures on the other hand uses drones not only because it saves money but it offers a better product. The day that every one individually will be able to make a descent video is on the way so at the end of the day who will generate more money? The manufacturer of a P&P system such as DJI with the phantom.
Jethro Hazelhurst June 6, 2014 at 1:08am

Thank you Colin as always for this useful insight! I very much enjoyed your presentation at the sUAS expo also!
Scott Penrose June 5, 2014 at 9:00pm

Currently a film / cinema operator can pretty much do so now as is with existing drones (not considering legal issues here). Farming is quite a long way off. But once we have the full cycle of automation - and by this I mean things like a fully automatic launch, return and process (NO HUMAN OPERATOR) (again, not considering legal issues here - assuming they will be resolved, usually are). Then we will see an explosion of farm equipment.

So how do you predict the future? Next 12 months, maybe next few years - definitely agree that film / cinema operations will be bigger market. After that, no way. Monitoring, farming, fire fighting, law enforcement, disaster response, search and rescue - these will all outweigh filming, in quantity and expense of equipment.

Only thing is, you have done your research, and I am working on gut. So good on you for the work and assessment. Good luck.
Colin Snow June 5, 2014 at 7:37pm

The thing to be most concern about is the AUVSI forecast. The assessment and prescription given to achieve a better forecast for the agriculture market in the U.S. in the quote above is right on. Standby for that one. I'm collaborating with others to get it.
Colin Snow June 5, 2014 at 7:31pm

@Rob – The great thing about online surveys is that you can see if this occurs because the URL source is reported for each survey participant. This analytic was available throughout the collection period and I saw no oversampling or bias from any particular source.
Rob_Lefebvre June 5, 2014 at 6:00pm

How did you eliminate selection bias in your survey?
Colin Snow June 5, 2014 at 5:36pm

@Rob - The reach was very wide and the results carry a 95% confidence ratio with a plus or minus 5% interval for a worst-case close answer.
Colin Snow June 5, 2014 at 5:32pm

Regarding the AUVSI's forecast for the Ag market there is a comment on my post that I will repeat here:

"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."
Cliff-E June 5, 2014 at 5:17pm

Note, AUVSI maybe looking at the global Ag market and not just US domestic. AP/Film, we're talking anyone in the food chain of the big 6 media companies, hence the market is limited (there's only "one" Hollywood), but has an "unlimited" budget :) and we're talking manual, multipilot (pilot, cameraman) flight, autonomous is still much in question (!!). The AP side is becoming more youtube based nowadays, so we may see a reverse effect, aka free content--still only time will tell.

Then again, film/AP can be cannibalized by a youtube for drones (e.g. droneshare-ish, etc...) where content is basically for free. It is about stock footage (I've worked for Getty Images) and content generation is one of the most expensive time consuming activities in business and monetized in the long run [cough.. tail]: just ask Chris :)

A darkhorse is the photogrammetry/GIS side as projects like Google Tango/Skybox and DARPA's SeeMe spin up where sUAS may play a more important role.
Rob_Lefebvre June 5, 2014 at 3:45pm

Are the results of your survey an accurate judgement of the state of the market? Or more a measure of who your survey reached and/or which industry had time and interest to respond?

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

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