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Seven Reasons Your Drone Hasn’t Turned Out To Be A License to Print Money

By Nathanael Showalter, February 20, 2018

The market is growing for UAS operations in many market sectors, with new applications being discovered all the time. Simultaneously, flying-camera and remote-sensing platforms are reaching greater levels of automation to facilitate ease-of-use, while also improving control and sensor systems. So it seems like a perfect time to drop $1500 on a mid-level drone and jump into the aerial photography pool. So why are there so few successful “drone services” companies?

1. The Entry Bar is Extremely Low

 

Back in 2015, the brand-new Phantom 3 Professional from DJI could be pre-ordered for $1359, and I know this because I went back and looked at my Amazon order from May of that year. Now, a brand-new Phantom 3 Pro will run for $749, nearly half of the original price, and it’s still one of the better small UAV options on the market for a significant number of applications.

 

A year and four months after the Phantom 3 Pro, and four entire variations of the Phantom line later, the Phantom 4 Pro became available for $1499. That’s only $140 more expensive than the Phantom 3 Pro, but it’s a better drone in nearly every possible way.

 

The point is, price is not really a limiting factor in obtaining a drone that can serve many purposes in the commercial market, be it photography, filmmaking, industrial inspections, mapping, or photogrammetry. Prices of professional-grade editing software like Lightroom and Premiere Pro, or the price of on-the-spot-and-by-the-hour insurance options like Verifly, are also affordable to most.

 

In the USA, the Federal Aviation Administration’s licensing requirement to operate drones commercially went from having a Sport Pilot’s license (costing about $10,000 and/or at least a month of your life) and a complicated legal exemption — to having to pay $150 and pass the easiest certification test the FAA requires (60 questions, 70% to pass, no oral or practical sections).

 

The proliferation of ready-to-fly models that you can buy off the shelf, charge, and fly with no assembly has also removed the need for technical savvy and a passion for engineering.

 

All this to say: Almost anybody over the age of 16 can afford to buy and start using a drone commercially. And over 73,000 people have done it as of February 1st, 2018.

 

 

2. The Entry-Level Market is a Race to the Bottom

 

For many, entry-level professional drone work is real estate. It’s certainly one of the first applications anyone thinks of when asked to name a use for drones. Eager to start building their portfolio, early drone operators begin soliciting local realtors, and sooner or later, they discover drone job aggregators like DroneBase, or professional bidding platforms like Thumbtack. Professional bidding platforms force service providers to quote their lowest-possible prices to be competitive, especially when quality is not a heavy consideration for the hiring party (as is the case with many real estate gigs).

 

Job aggregators will make it easy for drone operators to fly many small jobs over a short period by removing the editing work from the equation. But by the time any of the money comes to the drone operator, it’s been skimmed by the aggregator, the aggregator’s regional management firm, and the editing contractor, if not more people. This means that the client’s $299 invoice has become $79 by the time it reaches the pilot.

 

This still sounds enticing to many people, but it’s usually to the crowd with the least overhead — no costly monthly software subscriptions, no insurance considerations, no need to account for travel time — and it’s almost never that person’s sole source of income. These types can also afford to undercut the more serious professionals who want to make a living doing this work.

 

 

3. The Industry is Older Than You Think

 

Lifting cameras with multirotor drones didn’t start in 2014; they were using camera drones for cinematic productions back in 2002 to shoot sequences in Harry Potter and the Chamber of Secrets, and probably before that, too. This means that drone cinematography and photography is nearly 20 years old, at least.

 

So what’s changed? Accessibility, mostly, as summarized under Point 1 above. But budding aerial cinematographers today don’t always realize that there’s already a well-established industry full of experienced and knowledgeable professionals with surprisingly-strict operational standards guarding the gate to instant mainstream success in the drone world, and not just in cinematography: Unmanned remote sensing has been used in the military and private industrial sectors for just about as long.

 

 

4. The Standard for Quality Can Be Surprisingly High

 

While the average, affordable, consumer drone has reached the performance level of a pretty good DSLR camera and slightly better than some action cams, the industries that new drone owners are trying to break into have had decades to refine their craft and create a standard for accuracy and quality that is A) often less obvious and more nuanced than the public expects; and B) requires equipment which is not compatible with off-the-shelf drones due to weight, size, or power requirements.

 

Two good examples of this are surveying and cinematography. Drone operators looking to offer aerial survey work to contractors without a background in geospatial services will likely be surprised that their offers are dismissed due to error. They may come to understand that the consumer-grade GPS in their drone is not accurate enough to write good data to their EXIF, and the camera lens configuration and sensor settings create error in 2D and 3D data sets even when rendered in professional-grade photogrammetry software. They may then learn about the carefully-calibrated, double-verified, 100-megapixel, $150,000 cameras mounted inside the manned aircraft that perform aerial surveys with much better accuracy.

 

In cinematography, a drone operator may approach a filmmaker with his Inspire 1 Pro RAW, which records in 4K CinemaDNG format to offer lossless video, and that cost him $3,600. He’s likely to be told that, in order to meet project format requirements, his camera needs to shoot in 6K with a deeper color format and an encoding bitrate four times faster than the Inspire 1’s maximum. The director would also be disappointed to learn that the Inspire 1 couldn’t carry a single cine lens, either, due to weight, balance, and software compatibility.

 

 

5. High-Yield Jobs Have More Overhead Costs

 

Insurance

Businesses and project managers who are interested in hiring third-party drone operators often have insurance requirements for their contractors to meet. This means a drone operator trying to work full-time will need to consider taking out liability and aviation insurance policies, usually for one to five million dollars in coverage, depending on the job. Some clients may not accept by-the-hour coverage options that are popular among new and part-time operators.

 

Software

The more a job pays, the more work a drone operator will need to do, and this often means including post-processing in the estimate. Professional editing software isn’t particularly expensive, but specialized and supported surveying, CAD, stitching, and photogrammetry software can cost an arm and a leg to purchase outright, and quite a lot even when using a month-to-month plan.

 

Certain specialized applications that run on mobile devices to act as a ground station in the field can have monthly subscription costs, particularly those which provide automated mapping, waypoint, and image-capturing options.

 

Training, Licensing, and Memberships

Besides the initial Part 107 certification cost, and the yet-to-be-determined re-certification costs, there are specialized licenses and memberships which some industries require of their contributing members. The Academy of Model Aeronautics is a nationally-recognized organization, and some commercial UAS contracts may include the condition that the drone operators be AMA members.

 

Industry-specific certification requirements can prevent non-specific drone service providers from accessing work. For example, many states require survey work to be performed by licensed surveyors. There are also OSHA, MSHA, and public-safety certifications that will take time and money to acquire.

 

It’s one thing to own specialized equipment, and another to know how to use it. Operators offering infrared, thermal, or LiDAR services are likely to see jobs being snatched up by certified thermographers and LiDAR photogrammetrists.

 

Maintenance and Flight Logging

If you haven’t been asked to provide your flight logs and maintenance records before a job yet, you probably will be asked at some point. While the FAA has not created any maintenance-record- or flight-logging requirements for small UAS yet, there’s nothing to stop your potential clients from choosing between service providers based on factors like maintenance and service records.

 

Drone maintenance doesn’t take very long, but it’s unpaid work that affects your hourly rate.

 

 

6. Repairs and Updates

 

It takes mere seconds for a $2000 drone to become worthless. It happens to a lot of operators, even the careful ones. I would even venture to say the majority of drone owners have had a crash, hard landing, or other damage to their drones, and that’s not accounting for the electrical gremlins that pop up in consumer electronics all by themselves. Eventually, the likelihood is that a drone will be damaged and will require repairs that cost more than a lot of individual jobs pay.

 

New and updated drones are also arriving at an incredible rate. As mentioned above, DJI went from the Phantom 3 Pro in April of 2015 to the Phantom 4 Pro in November of 2016, passing through the Phantom 3 Advanced, P3 Standard, P3 4K, and the Phantom 4 (which had a production run of only 13 months). In that time, DJI also released the Inspire 1 Pro and the Mavic Pro.

 

So as much as one’s success is dictated by talent, skill, professionalism, and good management, the drone job market has a habit of trending toward those with the newest tools. Operators are likely to feel pressured to upgrade, particularly when jobs specify next-generation equipment requirements that exclude older, but still effective, drones.

 

 

7. Authorizations and Waivers

 

Most drone owners in the USA are aware that the FAA requires a Remote Pilot certification to fly UAVs in furtherance of a business, organization, or institution. But testing for the license is only the start of the bureaucracy, especially in areas with a lot of restricted airspace. Although expedited authorizations are promised through the LAANC system, a majority of airports in the US still require UAS operators to obtain an airspace authorization or waiver through the terminally-constipated online FAA portal.

 

You’re going to lose business from customers who can’t afford to wait three months (likely more) for you to obtain an airspace authorization. The solution, of course, is to request airspace authorizations far in advance of being asked to do the work so that you have them in hand when the jobs roll in.

 

 

So What Do I Do?

 

Specialize

The people using drones most effectively are leveraging them as a new tool in an existing profession. If you’re already good at something, get better at doing it using drones.

 

Advertise and Network

Ever gone to a vendor just because you recognized the name? It’ll work for you, too. Figure out your clientele and make it so they’ve heard of you. Attend functions held by groups of professionals you want to have as clients. Sign up for their newsletters and use the “inside” information to send out targeted advertising. Make sure you have a half-decent landing page and website. Use social media trends to get your name out there.

 

Persist

For every time you’ve come close to bottoming out and leaving the game, someone else has actually dropped out as your competition. In the early days of providing drone services, the difference between company success and failure can be the loss of a single asset (like crashing the only drone you have). And with the first round of Part 107 recertification tests coming up later this year, you can bet that some operators aren’t going to bother with the process, and will drop out of the game as a result.

 

Keep holding on.

 

And fly safe, above all.