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5 Tips on Finding a Good Drone Attorney

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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New Commercial Drones Report: Current State of the U.S. Industry

I just release a new research report.  It details the state of the commercial drone industry in the U.S. as of the end of June 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 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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Diversity and Hype in Commercial Drone Market Forecasts

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.

Image credit: Shutterstock

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Five Observations about the Camera Drone Market from NAB 2015

By Steve Maller for Drone Analyst

My brief but productive visit last month to the 2015 National Association of Broadcasters (NAB) in Las Vegas showed me just how fast the camera drone market is heating up. More than 97,000 people in media and entertainment attended this year, and the show featured for the first time an Aerial Robotics and Drone Pavilion with a fully enclosed “flying cage” for demonstrations. It was so well attended that one writer called the NAB 2015 “The Year of the Drone.”

Much has already been written about how drones impacted the show, and you can find good articles here and here.  I was particularly impressed with FreeFly System’s ALTA high-end drone because it represents what I consider to be a prime example of just how advanced unmanned aircraft systems (UAS) technology have become. You can find my post on that here.

As a post-show wrap-up I offer five observations about the state of the aerial film / photo / video drones market:

LAND GRAB. Anticipation of long-awaited regulatory changes in the U.S. is creating 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 drones. SPECIALIZATION. Many large and small companies are designing and marketing highly specialized camera platforms – many of which are even geared to only one of the film /photo / video applications. Take for example Intuitive Aerial’s Aerigon. It was built ground up for use with heavy, cinema industry-standard cameras like the Red Epic. This specialization implies maturing market demand. UAS-CAMERA INTEGRATION. Complete integration between UAS and camera is now common, either through proprietary cameras (such as DJI’s Inspire 1 and Phantom 3) or through partnerships with existing camera manufacturers (such as 3DRobotics’ Solo and GoPro HERO4). Complete or partial flight autonomy is being heavily developed by manufacturers even without solutions to complicated problems like sense-and-avoid and no-fly zones. This is a dangerous precedent as I do not believe the industry can deliver on its promise of reliably and safely without addressing these air traffic control concerns. I don’t see standardized solutions to these issues on the market yet. But fortunately operator training programs are appearing like FlySafe and Unmanned Safety Institute that can improve operating safety through education and promotion of safe practices. COOL FACTOR. Mainstream audiences are beginning to see what us aerial film / photo / video pioneers have seen for a while — that camera drones are tools for getting better shots. A year ago, the word ‘drone’ was heavily discussed by the UAS community as being sorely in need of a less menacing synonym, but today it doesn’t seem to matter. Drones are now ‘cool,’ – something that I don’t think anybody expected to happen so soon. Sure, the ones carrying Hellfire missiles and eavesdropping on terrorist mobile phone calls are still out there, but folks on the street are beginning to understand the difference.

This year promises to be the most exciting and eventful one yet for the world of camera drones.  Who knows what innovation we will see next?  In the meantime, we would to hear your thoughts on this market.  Send us your comments or write us info@droneanalyst.com.

Image credit: PerspectiveAir

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FAA Proposed Drone Rules: Market Opportunity Winners and Losers

On February 15, 2015, the commercial drone industry breathed a collective sigh of relief. The Federal Aviation Administration’s proposed new rules for small unmanned aircraft systems seemed, at first blush, somewhat practical.  The FAA regulations will eventually allow commercial operations of drones that weigh under 55 pounds in U.S. airspace, without requiring operators to acquire a pilot’s license. You can read the full 195 pages of proposed rules here (hereafter sUAS notice of proposed rulemaking, or NPRM) and some analysis about them here, here, and here.

In this post, I’ll focus on what I think are the immediate economic winners and losers.  My analysis is concentrated on the business impact and market opportunities that the proposed rules have for drones manufacturers, distributors, service providers, and investors.

What do investors need to know?

According to CB Insights data, 2014 investments in the budding drone industry topped $108M across 29 deals. Year-over-year funding increased 104% as venture firms jumped into the drone space with sizable bets. Still, over the past couple of years, I’ve heard VCs and potential investors discussing the FAA bottleneck and questioning whether this was the right time to invest.  Regulatory uncertainty has kept many on the sidelines. But this new clarity should help investors, including those interested in investing in operational and data / information services.

Clarity comes in not only knowing what the rules will look like, but also in the FAA’s commitment to no longer regulate UAS like they do manned aircraft — and in no uncertain terms the U.S. Department of Transportation’s (DOT) understanding of the macro-economic impact of commercial sUAS. In a document captioned Notice of Proposed Rulemaking Regulatory Evaluation, Small Unmanned Aircraft Systems, the author states:

“This proposed rule would create an enabling business environment which would encourage the growth of private sector activity in the manufacturing and operating of small UAS. Therefore, the major benefit of this proposed rule is that it would enable new non-recreational aviation activities for small UAS in the NAS where such operations are currently not permitted without an FAA-issued exemption. The private benefits would exceed the private costs if there is only one UAS and that UAS operation earns a profit.”

As noted here, it’s possible this is a leaked early draft that has since been revised or is otherwise incomplete or inaccurate. Still, the DOT evaluation explores in depth four potential markets: aerial photography, precision agriculture, search and rescue/law enforcement, and bridge inspection. These fall more in line with what I believe are the proper commercial market segments:

Precision Agriculture Inspection / Surveillance Mapping / Surveying Film / Photo / Video Public Safety / First Responders

As I see it, all of these markets are winners, but some are bigger winners than others. The devil is in the details, because success in each market depends what type of sUAS operation the sUAS NPRM allows or doesn’t allow.  The FAA summarizes these operational limitations here, and I’ll discuss each market below.

Precision Agriculture – Winner and Loser

Precision agriculture is a farming management concept based on observing, measuring, and responding to inter- and intra-field variability in crops. Precision agriculture uses detailed, site-specific information to manage production inputs. Information technologies enable segmenting a farm into smaller units to determine the characteristics of each individual segment.

For the most part, the proposed rules support the farmer’s and/or researcher’s ability to locate a precise position in a field, observe it, and create maps of as many variables as can be measured — but only on a small scale. That’s because all observation and measurement would have to be done by a drone that is within visual line of site (VLOS) of the operator. The problem is that fields and farms are big– bigger than VLOS.

Sure, operators could conduct many operations in a day by moving section to section to section and stitching together larger maps, but this is costly – both in terms of manpower and time. Even if it was cheaper, the market potential for drones in precision agriculture still needs more vetting. It’s not yet clear how a sUAS can deliver more usable data to a farmer or provide a cost benefit over the existing manned aircraft or the satellite image solutions available to them today (see Film or Farm: Which is the Bigger Drone Market? – Part 2 for more on this).

Bottom line: Demand for turnkey drone systems will increase as farmers and service providers work within the rule constraints (see my list of drone vendors serving agriculture  here). However, the big caveat is drone usage alone will not “transform agriculture” just yet.  For that, we would need to see a change in the adoption rate for variable rate technology (such as applicators) — which is currently down. So, if you are banking on precision agriculture data services, you will continue to see competition from incumbents and continue to see slow adoption for now.

Inspection / Surveillance – Big Winner

With sUAS’s ability to perform functions like perch-and-stare, video capture, and laser scanning, they are poised to replace many of the dull, dirty, and dangerous functions of inspection and surveillance. The main beneficiaries are civil and public entities that perform enterprise asset management (EAM) and facilities/infrastructure management.

Never is the benefit more evident than in the energy, telecomm, and construction verticals.  For example, the sUAS NPRM mentions power-line/pipeline inspection in hilly or mountainous terrain and antenna inspections (page 8f) as examples of possible operations that could be conducted under the proposed framework.  The DOT evaluation goes further and dedicates a whole section on bridge inspection (section IV.A.1.d. page 21ff). I would add to this structures like buildings, oil rigs, refinery flare stacks, cell towers, and wind turbines.

GIS professionals should pay particular attention to the bridge example. The National Bridge Inspection Standards (NBIS) mandates that routine inspections be performed at 24-month intervals. With almost 600,000 bridges in the United States and 300,000 requiring inspection each year, the DOT evaluation report estimates that about 45,000 annual bridge inspections could utilize some form of small UAS. Multirotors in particular are highly adept at getting into tight spaces.  With advent of smaller/lighter survey grade LiDAR, the combo provides a stable and portable platform for precision scanning of bridges. I think drone products and services that target GIS firms are hot—you can read why here.

Bottom line: Demand for and use of drones (especially multirotors) dedicated to asset and infrastructure inspection will see a big uptick. There is also now a very large opportunity for firms like Accenture and IBM to provide information architecture and data integration services for drone data to existing enterprise and mobile applications like SAP EAM and Oracle EAM.  I also see opportunities for companies to provide motion imagery, video analytics, object recognition, and image metadata processing solutions.

Mapping / Surveying – Winner and Loser

As I mentioned above, the new rule supports the ability to locate a precise position, look at it, and collect the data to create maps on a small scale. Again, that’s because all observation and measurement would have to be done within VLOS of the sUAS operator. The problem here is many mapping projects are bigger than what can be captured in VLOS.  As in the precision agriculture example, operators could conduct many operations and stich together larger maps, but this may be more costly than what can be currently conducted by manned aircraft.

Rules aside, good solutions exist today that support autonomous missions beyond line of sight (BLOS) and therefore create large maps in one flight.  Some investors in this market may be disheartened by the proposed rules that restrict flight to VLOS, since so much effort has been put into autopilot / mission planning / ground control solutions.  Nevertheless, almost all of the existing solutions provide semi-autonomous flight capability where the operator is still in control (or can take back control). You just won’t be able to fly multiple drones at the same time. The proposed rules are one operator, one drone.

Bottom line: The surveying industry has the most to gain here. The door is wide open for drone operations like stockpile measurement and small open pit mine mapping.  The door is also open for laser scanning, 3D imaging capture, and data processing that architectural engineering firms can consume.  As such, there are new opportunities for dedicated and differentiated cloud-based in-memory processing data services.

Film / Photo / Video – Big Winner

The DOT evaluation dedicates a whole section to aerial photography (section IV.A.1.a. pages 16ff).  It says:

“Small UAS industry experts have informed the FAA that a proposed rule could enable a viable market for small UAS aerial photography.  These unmanned aircraft operators would likely specialize in low-altitude aerial photography and video. Consequently, once a small UAS aerial photography market becomes established, it would increase safety by substituting an unmanned aviation operation using a very light aircraft for a more complex manned aviation operation that uses a much heavier aircraft.”

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).

Bottom line: Drones have already created new sources of demand for aerial photography, and this will continue in earnest. As with land-based photography, the financial and technical barriers to entry are low, making it easy for businesses to begin offering sUAS-based film and photography services. Now that the regulatory hurdle looks to be low, expect aircraft vendors and specialty retailers to flourish, too.

Public Safety / First Responders – Uncertain

The DOT evaluation dedicates an entire section to “Search and Rescue/Law Enforcement” (see section IV.A.1.c. page 19 ff).  It describes how small UAS missions can create significant cost savings to federal, state, and local government entities because they offer a more economical alternative to manned helicopters. The report estimates (page 20):

“…a significant number of public entities will contract the services of a small UAS operator. … The FAA and industry expect that some of the larger public entities would train their own operators and purchase and operate their own small UAS. The majority of the smaller public safety departments that could not afford to train their officers to fly a small UAS would contract these services out to commercial small UAS enterprises as the need arises.”

If true, this would create a viable market. But there a few catches. The first catch is the proposed rule does not allow sUAS operations at night. The second is there are or will be local rules to contend with that prohibit certain types of operations, like surveilling criminal suspects.  The third is the recent Presidential Memo creating standards for how government agencies and some recipients of federal funds will address the privacy issues associated with drones.

Bottom line: Under the proposed rules, demand for turnkey drone solutions and services for police, fire, and emergency medical services is uncertain.  Technology adoption by fire and rescue may be good, but adoption by local and state police agencies will no doubt be fraught with continued controversy over privacy and Fourth Amendment rights.

Conclusions

Almost all drone industry insiders expect the clarity about forthcoming rules to foster investment that will create new jobs and spur economic growth — if not now, certainly when the proposed rules become law in 2016 or 2017. Expect then to see increased productivity, improved worker safety, and saved lives.  In the meantime, the FAA wants to hear from you about the proposed rules (see 31 Questions the FAA Wants you to Answer).

I would love to hear your thoughts about the proposed rule for commercial drone use. Feel free to comment or write me at colin@droneanalyst.com.

Image credit: Shutterstock

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