6 Reasons the Market for Drone Services is Set to Explode

No one is going to argue the claim that drones are becoming increasingly more popular by the day. You can’t go 24 hours without coming across some new drone announcement online or seeing a drone on TV. The major reason drones are taking off is because they aren’t just weapons and they aren’t just toys anymore; they’re tools.

Tools that can be used to make money.

Plenty of studies and projections can throw numbers at you to prove drone sales, and therefore drone-based services are increasing, but they tend to leave out why this increase is occurring. Here is my slightly different take on why I think the market for Drone Services is set to expand.

1.) Overall Growth in Drones:

For starters, let me throw some numbers at you. According to a recent study by Business Insider Intelligence projects a compound annual growth rate of drones to be 19% for non-military applications vs. a 5% growth for military use.

 

A rising tide carries all boats.

As with many new technologies (smart watches, tablets, cars, electricity, cell phones, laptops, etc.) drones are still at the early stage of the adoption curve with plenty of early stage high rates of growth to go. Much early work was done on this by Everett Rogers in his studies on the subject. Are Drones really that different? I don’t think so and if not, then they should follow the same adoption curve.

Everett Rogers wrote that with each successive group of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level.  The curve is broken into sections of adopters. Even after saturation, drones are replaced in regular intervals by new models that are smaller, faster, and lighter. For example, how old is the cell phone in your pocket?

2.) Legal:

The FAA is moving forward to loosen up drone regulations (although not at the pace that we would like). No one, including the FAA, is immune to pressure the growing number of every day companies in industries such as Real Estate, Fire, Police Protection, Farming, and Hollywood (to say nothing of our multi-billion dollar tech conglomerate overlords) that are clamoring to to use drones for commercial purposes.

Internationally, some countries are moving much faster than is the US and so the FAA will continue to be pressured to move faster with the commercial use of Drones.

3.) Technology Advances:

With new releases from major manufacturers such as DJI, Parrot, 3D Robotics and new, viable manufactures turning up every week, drone technology is being pushed forward at a rapid rate. Newer, better cameras, more efficient and lighter rotors and frames, and better controlling devices are constantly making drones both better and easier to use. 

Battery life, a constant pain point for the drone industry, will eventually cause a huge leap forward in UAV technology. Again, this is a good example of a rising tide carrying all boats; the automotive industry is a driver in this segment with companies such as Tesla (who would have thought that you could create a new car company from scratch and make it success is far more a visionary than I).  They recently announced that they are going to sell batteries to power the home that will also add storage to our electricity grid.

All of this research on batteries is going to help reduce weight, increase working times, and reduce charging times will significant aid the drone industry.

4.) New Uses for Drones:

While there is some transfer of technology with the use of drones, much of the usage of drones is for net new applications. For example, some helicopter services will be reduced as people substitute relatively inexpensive drones for relatively expense helicopter flight time, but I would argue that most of the applications are net new.

Is the increasing number of real estate agents using drones to sell houses replacing something else? We are starting to see, and realtors are being forced to provide, that type of marketing for high end properties. How long before every listing has aerial shots (of not just the house, but the neighborhood) and every broker is forced to provide them to get choice listings?

5.) Infrastructure:

From NASA working on geo-fencing to allow the organized movement of drones, to security companies such as Pwnie Express having products that detect the unauthorized presence of Drones, the periphery “stuff” that allows technologies to work well is rapidly advancing. While not always sexy, the no-fly zones, geo-fencing, and regulations are what allow the usage of drones to continue and grow.

6.) Owning a drone does not mean that I will never hire a Drone:

I, like many of you, can fly a drone but that does not mean that I am the best person to make a video to market the golf course, effectively market my event, or sell my house.  I drive a car but do not, nor do I wish to drive a car in the Indy 500, or a delivery truck.

Time will tell but I am not going to bet against it.