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Competing in a Competitive Drone Service Market

Times have changed. Not very long ago, the word Drone was synonymous with nothing other than military applications or Star Wars. Today, the word Drone can mean many different things to many people, but for most it is a mysterious flying object with 4 propellers. With the prevalence of UAS or Drones in both the consumer and commercial industry today, it is amazing to think that less than 10 years ago, these were nothing more than experimental projects for DIY hobbyists. The commercial market has changed even more rapidly with UAS flights, less than 10 years ago, being completely illegal for commercial purposes, then, transitioning to a case by case FAA 333 exemption basis, and finally, as of August 2016, commercially open for anyone who passes the Remote Pilot Exam! For the Drone Service sector, these rule changes caused some major shifts in the number of eligible drone service providers in the market, and, greatly increased the competition they face.

For many drone service companies who had already been operating under a FAA 333 exemption this was not an immediate effect, however, as the number of Part 107 certified pilots grows and they start to build up their business, it is starting to be felt. Entry level activities like basical aerial videos and photographs have become a commodity and what used to be a profitable business is now a price competition against anyone of the tens of thousands of pilots out there who can provide the service with little startup costs. About a year after the opening of the Part 107 testing, there is somewhere between 36,000 and 40,000 certified pilots. To put this in perspective, there were only a few thousand Part 333 exemptions granted in the approximately 3  years before part 107 testing began. The other dynamic is the technology is getting less expensive, more reliable, and easier to use. No longer do you need a $10,000 rig and hours of experience flying to do professional looking videos. Due to these factors, drone services, especially basic services, now have a very low barrier to entry and ever-growing competition. So, the big questions is, how do you stay competitive in a market that has been flooded by so many new entrants?

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