Drone “Bubble” Ahead?

There was no lack of enthusiasm at the recent AUVSI trade show in Atlanta, with hundreds of vendors and seemingly thousands of participants, as the keynote address took on the appearnce of a rock concert, with 3DR’s Colin Quinn (formerly the face of DJI) clearly its star M.C. That many vendors and attendees is more remarkable when you consider both the number of competing events on the calendar and the fact that there were only four hundred some authorized commercial operators with FAA exemptions and a smaller number of active public COAs at the time.

The ever growing number of drone operators who choose to play by the rules may be finding no lack of competition from other operators who don’t, and so far the FAA has not done a lot to deter the “cowboys”. Many are also finding the initial enthusiasm among potential customers could be staring to wear off,  partly due the growing number of operators both legal and otherwise, and partly because the shine may have started to fade.

In the beginning, drone operators had to contend with the negative military connotation of the term “drone”, now the problem lies more in the danger of the field becoming saturated with dozens of new products and more people buying them, costly trade events every few weeks, as well as the impact of state and local restrictions, and the practicalities of basic business costs,  including an insurance industry still trying adapt to and assess the risks of a new market.

Dronelaw.net: “..the expense of regulatory exemptions and possibly state and local permits, plus insurance coverage and other operational costs, – exceeds what many commercial users anticipate when they dream of deploying small drones in their operations.” (from 12/20/14)

States including Florida, Idaho, Montana, Tennessee,Texas and Virginia were quick to enact drone legislation, much of it might be described as ranging between misguided and based on unwarranted fears. More than 40 states have proposed similar laws. Some municipalities are also starting to get into the act responding to “public concerns” about privacy and safety, often merely duplicating and overlapping (or complicating) existing laws. Strangely, a large number of these regulations are being drafted by the same element that on different days rails against “excessive” regulations.

As more manufacturers enter the field, including GoPro which recently announced their own product to be released early in 2016 and Sony which is also rumored to be working on a drone to carry a version of their own “sport” cameras, it will become increasingly difficult to keep up, and early adopters will find their expensive equipment being made obsolete by newer and cheaper versions.

In some ways the drone business started out like CB radios, but the similarity ends fairly quickly. Where the FCC fell far short of the challenge, the FAA is clearly engaged in the process of meeting the challenge. I may be alone in my assessment but in all fairness, considering the pressures and complications, they’re doing a fairly remarkable, if not amazing job of doing it.

The potential for this new industry may well live up to expectations, but it is also possible that reality may paint a more modest picture as time goes on. Certainly there are more and more applications for drones opening up every week, but at the same time the field may be starting to become over populated with both products and players. And with all the new “drone schools” being announced, will there be enough paying customers and employers to keep all the newly trained operators busy? And what offsetting effect with drones have on other businesses, from crop dusters to delivery services?

The industry may be able to shrug off interference from state and local restrictions and regulations as well as increasing competition, both legal and otherwise, but  if the economy sees another dip in the next few months, as has been increasingly predicted, the outlook could quickly change.  One or two serious accidents could also cloud the picture in a hurry.

A word to the wise would be to proceed with caution.