HomeUnderground drone economy takes flight

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“There are many people out there making extraordinary amounts of money,” says Gene Robinson, who uses drones to help authorities with search and rescue missions. “You can even get liability insurance to operate now.”

While the Federal Aviation Administration hasn’t yet drafted regulations for the futuristic unmanned devices and limits their commercial use, some players have already plunged in:

Real estate specialist Manie Kohn uses drones to video luxury properties. Terence Reis flies them to photograph surfers. Brad Mathson monitors farmland in the Dakotas, while Ryan Kunde uses a drone to improve production at his vineyard.

Bezos thrust drones into the spotlight when he talked about his plans to use them to deliver packages on 60 Minutes Sunday night. But thanks to drones’ ability to shoot aerial photos and video steadily and collect other data cheaply, they are already being used in many sectors, including movie making, sports, mining, oil and gas production and construction.

Once the FAA drafts its drone regulations, integrating the devices into U.S. airspace could boost the economy by at least $13.6 billion in the first three years and the economic benefit may top $82 billion between 2015 and 2025, the AUVSI estimated earlier this year. It could also create more than 70,000 new jobs, including 34,000 manufacturing positions, in the first three years, the group forecast. In 10 years, it projects 100,000 jobs will be added.

Despite such uncertainty, the commercial potential of drones has attracted big investors.Airware, which makes software and systems that control drones, raised more than $10 million this year from Andreessen Horowitz, a big venture capital firm, and Google’s venture capital arm.

“There will be a whole economy around it, with entrepreneurs creating technology for specific types of customers,” says Chris Dixon, a partner at Andreessen Horowitz who joined Airware’s board of directors. “There are a number of obvious applications, and lots of less-obvious applications that we haven’t even thought of yet.”3DRoboticsChrisAnderson

3D Robotics, a drone manufacturer run by former Wired magazine editor-in-chief Chris Anderson has already sold “tens of thousands” of drones and the company will soon launch a new model called IRIS, aimed at consumers and other individuals, that will cost about $750.

Manie Kohn, who works in the high-end real estate market of the San Francisco Bay Area, got his hands on drones for the first time about three years ago.He used to use helicopters to shoot aerial photos and video of luxury properties for real estate agents who were willing to pay $20,000 for an extra service that could help win big commissions.

But helicopters were expensive, noisy and limited in how low they could fly. So Kohn started building his own drones to do the job and has spent at least $45,000 developing the machines, getting trained to fly them, accumulating certifications and lining up insurance.

It took Kohn about a year to track down an insurer that would cover his drone operation. Transport Risk Management now provides him with coverage that starts at $1 million and covers damage to property, people and the drones themselves. The cost of the policy depends on proficiency, so Kohn had to get official training and certification.


Terence Reis, a 54-year-old IT professional based in Oahu, started using a drone this year for his part-time business, KahiwaKiwi Media Productions, which shoots surfing photos and takes other photos and video of Hawaii ocean life.

Reis spent about $5,000 on parts and equipment. But it has helped him take better pictures and video from locations that he couldn’t have reached before.

“Before, I would shoot from a helicopter, which was very expensive — about $300 to $400 an hour,” he says. Helicopters also could not get low enough and they vibrated a lot, which meant the images had to be edited heavily. Reis’s drone is steadier, which sometimes means no editing is needed.


The biggest opportunities, at least initially, may be in agriculture, because big farms do not have many people on them, reducing the risk that wayward drones might cause injuries if and when they crash.

Dakota Precision Ag Center is using drones that cost about $3,000 to collect agricultural data that helps farmers produce more by monitoring crops and cattle and guiding watering and fertilizer application.

 Using traditional methods, about 100 to 300 acres of farmland can be monitored a day, but using drones that number can rise to 2,000 or 3,000 acres a day, according to Brad Mathson, assistant director of the Dakota Precision Ag Center.


The Motion Picture Association of America has been lobbying the Obama administration to let filmmakers use drones, arguing that putting a camera on an unmanned aircraft can be cheaper, safer and more useful than relying on a helicopter or a crane to get a difficult shot.

The effort has not borne fruit. But drones are already being used in making movies, TV shows and advertisements, according to Gus Calderone of IsisCopter LLC, which makes drones and related equipment.

Drones with rigs costing $25,000 carry cameras in Hollywood that weight about 15 pounds and are worth $30,000 to $40,000, he explains.”This is a major underground market,” Calderone says. “Some people are hiding. Others are in plain sight, and it’s happening way more than people know.”


Gene Robinson runs his search and rescue service through a non-profit called RP Search Services, which uses drones with high-resolution cameras and infrared sensors to track down missing people and help authorities obtain access more safely to dangerous areas.


The FAA said in 2007 that drones, or Unmanned Aircraft Systems, cannot be flown commercially. And so much of the world’s commercial drone activity is happening outside the U.S.

The regulator aims to have regulations in place by 2015, and an FAA spokeswoman says it plans to propose a rule for small drones next year. It is also expected to pick six test sites by the end of this year.