Drone shows, who's paying?

When fireworks and light shows gradually withdrew from the competition for "night landscapes", drone shows quickly filled the gap. In the market segment of UAV formation flight performance, the performance quality and market share of Chinese companies are leading the world. But in addition to speed, drone shows need to build a healthy business model. The following is a report from China Newsweek in November 2023.

Behind the popularity of drone shows

At the Shenzhen International Drone Exhibition in June this year, a government worker made a special trip from a city 800 kilometers away to the scene and booked 500 drone formation performances.

"From May Day to now, there are performances almost every day, and the market is in short supply. Qin Haiqun, deputy general manager of Shenzhen Damo Intelligent Control Technology Co., Ltd., pointed to the vacant seats in the office area and said that all aircraft and technical support personnel are out on duty, and the performance must be booked at least one month in advance, and the production order has been scheduled for 2024.

In Shenzhen, where the drone industry chain is the most mature, there are many performances this year alone, and on average, Shenzhen residents can see a drone show every once in a while.

The trend of holding drone shows has spread from first-tier cities and coastal areas to the vast sinking markets. According to the data of Yifei Intelligent Control (Tianjin) Technology Co., Ltd., one of the leading enterprises in the industry, during the Mid-Autumn Festival and National Day this year, the company and its partners conducted hundreds of drone shows in more than 30 cities in 20 provinces and cities across the country.

On the evening of 27 September, a drone show over the Wan Chai waterfront in Hong Kong attracted a large number of residents and tourists. The drone is put together into the shape of the famous painting "Girl with a Pearl Earring". Photographer/Reporter Li Zhihua

According to the statistics of the "2022 Cultural Tourism Industry Drone Formation Performance Data Insight Report", before the outbreak of the epidemic, the drone performance market ushered in a period of rapid growth, and even in 2021, the number of domestic drone formation performances reached 7,228.

In just seven years, Chinese enterprises have reached the first place in the world in the field of drone formation performances, but there are also many controversies and questions that need to be answered by the industry: Is this a gratifying creative industry or is it not a serious business? More and more drone shows light up the night sky, who is paying for it? After the light show is named and regulated, can the drone show avoid becoming a new "face project"?

"Traveling for a month"

This summer, the air show of the fireworks night at the Palace of Versailles in France came from a company in Shenzhen, the "capital of drones".

Hundreds of drones hovered over the castle of Versailles in France. The fireworks carried by the fuselage were set off at the right time, combined with the change of the formation of the drone, sometimes becoming the feathers on the top of the noblewoman's head, and sometimes turning into the tears of the Sun King, sliding from the sky and rising and blooming.

"In the market segment of UAV formation flight performance, the performance quality and market share of Chinese companies are leading the world. Yang Jincai, chairman of the World UAV Conference and founding president of the Shenzhen UAV Industry Association, told China News Weekly that overseas large-scale festivals and exhibitions have invited domestic companies, "in addition to technical capabilities, there are price advantages, and the overall cost performance is high." ”

The price of the performance market has fallen repeatedly in recent years. A single performance is charged according to the number of flights, and many downstream performance service companies have pressed the fee to one or two hundred yuan per aircraft, and the head enterprises have rich experience and a high safety factor for performances, and the fee for each flight can reach seven or eight hundred yuan. That is to say, 1,000 drones perform for dozens of minutes, and the company will have 800,000 yuan in turnover, but this is less than 1/10 of the market price at the peak of the industry.

The drop in prices has further stimulated the demand for the drone show market. The main consumer body of the market has gradually transitioned from the national team with deep wealth in the early years to leading industries such as real estate and automobiles, and has further sunk to many private enterprises.

"One of the company's drone formations flew out for more than a month and didn't come back. Qi Juntong, founder of Yifei Intelligent Control and deputy director of the Institute of Robotics and Autonomous Systems of Tianjin University, said for example, that after the team of drones went to a city in Xinjiang in September to conduct a government procurement performance, the whole of Xinjiang knew that the company could receive business performance booking calls from enterprises in different counties and cities in Xinjiang every day. "Flying every day is like a circus tour. ”

Whether it is used to show the image of the city or as a regular program, drone formation performances have become the first choice for large-scale event celebrations. After the Mid-Autumn Festival and the eve of the National Day this year, a joint flight performance was carried out at the same time over Shenzhen Happy Harbor and Hong Kong's Victoria Harbor. After the drone formation formed characters such as "Happy Bay Area" in the air, it conjured up dot matrix images such as the fragrance of golden cinnamon, Chang'e running to the moon, Tiananmen Tower, the national flag and regional flag, and Shenzhen and Hong Kong wrestling each other's wrists.

"Fireworks only create an atmosphere, while drone shows show more precise and specific content. In Yang Jincai's view, drone shows also have their own low-carbon environmental protection, high-tech, safety and other highlights, and have become a new generation of propaganda media. As early as the end of 2022, before the release of the optimized prevention and control measures, many customers in southern cities were already ready to make a move and began to contact the second year's performance. "Customers have seen the pent-up demand for travel, whether it is urban tourism promotion or corporate product promotion, they want to win attention and traffic through drone shows. Qin Haiqun analyzed.

The charm of the drone light show is the shock you feel when you look up at the canopy. The visual stimulation created by the change of light and shadow is accompanied by the oppressive feeling of the huge queue in the air, like science fiction shining into reality.

On October 4, in Xiangyang, Hubei, 1,500 drones showed flying dragons in the sky. Photo/Visual China

The first drone shows appeared overseas. In the summer of 2012, more than 90,000 spectators gathered on both sides of the Danube River at Ars Electronica in the northern Austrian city of Linz to witness the world's first outdoor drone show. In 2016, Raphael de Andrea, a professor at ETH Zurich, performed a micro-drone swarm demonstration on the TED stage, which attracted a lot of attention overnight.

Subsequently, Intel successively set new world records for the scale of performances, and also appeared at the opening ceremony of the Pyeongchang Winter Olympics, completing the first drone light show in the history of the Olympic Games.

What really brought the drone show to the public eye was the 2017 Super Bowl warm-up stage. When the still popular Lady Gaga sings, the starry sky behind her changes instantly, and in less than 30 seconds of footage, the limelight of the drone show even overshadows the discussion of Lady Gaga's fancy dress.

"Overseas companies have created a new form of drone shows, but they have not quickly formed an industry in this segment. Li Chenliang, creative director of HighGreat Innovation, a leading domestic drone company, said that Intel only used performance as a way to promote the company's image and product performance, and did not focus on the development of the performance market, and the potential of this emerging market was quickly released in China.

However, there are not many companies in the industry that can provide safe and stable large-scale formation performances, and there are only a handful of drone brands that have both performance services and independent research and development and production.

Shenzhen HighGreat Innovation, Shenzhen Desert Intelligent Control, Guangzhou EHang Intelligence and Tianjin Yifei Intelligent Control are known as the "Four Little Dragons" in the field of drone performance. According to the Shenzhen UAV Industry Association, these four and their service providers dominate more than ninety percent of the domestic performance market.

In order to show their strength, several leading companies have chosen the most intuitive way to compete: breaking world records. At first, domestic and foreign companies took turns to be on the list, but in the later stage, only domestic companies were left to roll in. "It's easy to win a world championship, but it's too difficult to win a domestic championship. "The scale of the performance has quickly broken through from dozens to 100 or 1,000, and the performance time has been doubled, and it can even perform in special environments such as severe winter and high altitude.

In May 2021, HighGreat brought 5,200 self-developed drones to Shenzhen Longgang Universiade Sports Center to refresh four Guinness World Records: the largest number of drones flying at the same time, the largest light source image formed by drones, the longest animation performed by drones, and the largest number of consecutive formations of drones in the same group. At present, these four records are still held by HighGreat Innovation.

"From a technical point of view, it is not a problem to control tens of thousands of drone performances at the same time, but this is obviously beyond the current market demand, and it doesn't make much sense to simply brush records. Li Chenliang responded.

"Ten minutes of performance, difficult behind the scenes"

Behind the exponential expansion of the scale of drone formation performances is the convergence of technologies across multiple professional fields.

Li Chenliang said that to control thousands of UAVs in accordance with the pre-designed three-dimensional animation precise movement, and at a height of 100 meters to accurately present the pre-designed animation effect, the whole system operation covers multi-rotor aircraft, automatic control, wireless communication, track planning, three-dimensional modeling and simulation, LED lighting programming and other specialties.

At the opening ceremony of the 2022 Beijing Winter Olympics, Shenzhen, as the only southern coastal city to appear in the hot session, used 2,022 drones to make a snowfall. Subsequently, the "Bingdundun" and "Xuerongrong" composed of drones came from the air, and every "snowflake" in the night was dynamic and three-dimensional.

"The biggest difficulty with the drone show at the opening ceremony of the Winter Olympics was the continuous 3D dynamic transformation. Li Chenliang, creative director of the performance provider HighGreat Innovation, introduced that compared with simple picture presentation, 3D performance has higher requirements for the stability of UAV swarm control and communication reliability in complex environments.

The trajectory of each aircraft is precisely calculated and repeatedly tested. In the design stage, the staff will produce the performance content such as text and images in the form of 3D animation, and then use software to generate individual flight trajectories for thousands of drones through algorithms.

During the performance, each aircraft can quickly find its own exclusive position in the air to ensure the agility and delicacy of the animated content, which requires more accurate positioning technology. "Now the flight accuracy can be up to the centimeter level. Li Chenliang recalled that the earliest was to complete the 2018 Spring Festival Gala performance, so that the Chinese white dolphins composed of 300 drones jumped over the Hong Kong-Zhuhai-Macao Bridge, and began to develop dual-frequency RTK positioning technology, which was the first large-scale 3D UAV formation performance in China. 1 minute on the stage, and it took nearly three months to tackle the positioning technology under the stage.

The more drones there are, the more expressive the picture will be. However, the expansion of the fleet also means that the amount of communication data has increased exponentially, which puts forward higher requirements for back-end load and database analysis capabilities. In order to enhance the accuracy of data transmission, companies are also showing their strengths. "Drone shows don't usually use 3G or 4G communication networks. Qin Haiqun explained that when the number of spectators increases, after the terminal equipment such as mobile phones reaches a certain scale, the public network will be seriously congested, resulting in the failure of the communication system, and the formation of drones will not be able to take off normally, which is also one of the main obstacles encountered in the formation performance of some domestic drones. The approach of Damo Intelligent Control is to organize local area private network communication by itself, so as to avoid the interference of operator communication frequencies or WIFI frequency bands.

Before completing a "zero-error" performance, the executive team had to go through countless tests and failures. Li Chenliang introduced that the pre-flight site survey work is also very important, especially the electromagnetic environment interference, the strength of the satellite satellite and other situations: "The jargon says that the final destination of any drone is to blow up the aircraft, but no company can afford the consequences of blowing up the plane during the performance." ”

A drone model consisting of a drone. On October 23, the drone show of the low-altitude economic carnival in Longhua District, Shenzhen, Guangdong Province was held in the Central Park of the North Railway Station. Photo/Visual China

On the evening of August 11 this year, when Dongguan Xiangshi Zoo was holding a drone show, nearly 100 planes suddenly lost control and fell. Afterwards, the park explained to the media that it was because of the temporary receipt of the air traffic control notice, but the machine was damaged, and no one was injured at the scene.

Since 2017, the state has successively issued a series of laws and regulations to regulate the drone industry. Despite this, "black flight" incidents such as drones intruding into public and sensitive areas without permission, accidentally falling, affecting the normal take-off and landing of passenger aircraft, and colliding with high-rise buildings still occur from time to time.

"The drone formation show is not something that can fly if you want to. Yang Jincai said that before the official performance, the executive company needs to submit a large number of qualification materials to apply for airspace, and after obtaining the airspace permit, it will bring more than 10 materials such as security plans, emergency plans, and commercial insurance certificates to apply to the local public security authorities for filing. The strict approval process makes it more difficult for latecomers to get a piece of the market.

"The difficulty of the ten-minute performance is behind the scenes. Qin Haiqun said. Technological progress in multiple fields has jointly supported large-scale, high-precision UAV formation performances, and the continuous optimization and iteration of technology not only reduces the accident rate, but also improves the visual perception.

However, in the face of lower and lower performance pricing, leading companies are also adjusting their business layout and returning to the main battlefield of consumer drone sales. "Small-scale performances with hundreds of sorties are basically gone. Li Chenliang said that only tens of thousands of yuan are charged for a single performance, which may not be enough for the cost of personnel travel and equipment loss. In recent years, leading companies have expanded overseas markets, but due to the approval requirements for overseas performances, most of them have "gone overseas" by selling aircraft and providing technical support services.

“干不掉大疆，就干掉烟花”

Recalling the "fork in the road" when they embarked on the formation performance, drone companies were somewhat helpless.

Since 2012, the domestic UAV industry has entered a stage of rapid development. By around 2015, Shenzhen had gathered two or three hundred drone companies. The advantage is that the industrial chain is mature, and a drone can be built without leaving Nanshan District, but the disadvantage is that the industry is uneven. At that time, it was rumored in the industry that some start-ups could flicker to 30 million yuan in financing with PPT without any physical products.

Everyone wants to be the "next DJI", but there is no shortcut to technology development. Capital does not allow investors to spend a lot of time on technology precipitation, forcing startups to rush to bring unstable products to the market. "These drones seem to be cost-effective, but in fact, they hide endless after-sales hidden dangers, and a large number of companies are dying under the lack of front-end research and development and after-sales crotch pulling. Li Chenliang said.

2015 was also a watershed year for the global drone industry. According to a venture capital report jointly released by KPMG and CB Insights, in the third quarter of that year, the global drone industry raised $140 million, a record high. By the same period in 2016, the financing scale was only 55 million US dollars, and the investment scale shrank by nearly half in one year. The rapid ebb of capital has pushed many drone brands that originally relied on financing to the brink of death.

Around 2016, there were few downstream customers left, in order to ensure the stable production of the factory, HighGreat Innovation, which started in the manufacturing industry, simply launched its own drone in 2017, and after the debut of China Joy that year, it unexpectedly received a large number of performance orders.

At that time, domestic drone shows were mainly led by public institutions. In 2016, in order to commemorate the 80th anniversary of the victory of the Red Army's Long March, CCTV National Defense Military Channel planned a drone-themed performance art performance, which was the first drone show recorded by video in China. Shenzhen Damo Dazhi Control, which hosted this performance, had just been established at that time, although it had successfully developed its own central control system and built a prototype, but the product had not yet gained a firm foothold in the consumer market.

"Shenzhen's well-known drone companies should have been asked, and Damo Dazhi Control is the first to dare to take performance orders. Qin Haiqun recalled the situation at that time, and the company had the momentum of "newborn calves are not afraid of tigers". At that time, the industry as a whole was focused on technology research and development, and "performance" always gave people a feeling of not doing their job.

When the fuselage decorated with red five-pointed stars of 80 planes performed in the air according to the predetermined formation, they were cheered by the scene, which also allowed Daxia Intelligent Control to see the infinite possibilities of the emerging market of UAV formation performance. "The key is to have a stable collection of payments and a guaranteed cash flow. Qin Haiqun said. Since then, orders for CCTV Spring Festival Gala, festival performances, international exhibition performances and other orders have come one after another, and the development focus of Daxia Intelligent Control is naturally inclined to the field of formation performances.

The rapid expansion of market demand has attracted more enterprises to enter the market. Guangzhou EHang, a leading drone company, established a subsidiary in June 2016 to test the water drone formation performance business, and HighGreat also launched its own brand of consumer drone products in 2017. In the northern market, Tianjin Yifei Intelligent Control, which focuses on the R&D and application of intelligent unmanned equipment control system solutions, also started the drone performance business three years after its establishment. The four-legged situation of the industry has been formed.

"In the early days of the industry, the government played a strong role in promoting the industry. Yang Jincai said that more than half of the early market orders in the industry came from local governments and enterprises and institutions, when local finances were relatively abundant, and large-scale festivals also had a rigid need to "find new performance forms to replace fireworks and light shows".

After the promulgation of the Regulations on the Safety Management of Fireworks and Firecrackers in 2016, more than 400 cities across the country have banned fireworks and more than 700 cities have restricted fireworks, and fireworks production orders have been reduced by about 40%.

Urban lighting projects, including light shows, have also been put on hold. In the past few years, various localities have followed the trend to promote the comprehensive lighting project of the city, and some poor areas and underdeveloped towns have also invested heavily in the "face project" related to the lighting project. Wanquan County, Zhangjiakou, which was once a national-level poverty-stricken county, was exposed by the media and spent 40 million yuan to build a "large-scale laser water curtain show", including lights, music fountains, laser projection and other facilities and technologies. A week after the incident was exposed, the deputy secretary of the Wanquan District Party Committee and the head of the district were dismissed on suspicion of serious violations of discipline and law.

At the end of 2019, the central government issued the "Notice on Rectifying the Problems of "Performance Projects" and "Face Projects" such as the Excessive "Landscape Lighting Project", which inspected and dealt with the "performance projects" and "face projects" that "violate the law of urban development, exceed the carrying capacity of resources and environment, exceed local financial resources, and deviate from the wishes of the people".

When fireworks and light shows gradually withdrew from the competition for "night landscapes", drone shows quickly filled the gap.

On April 29, 2018, thousands of drones posed in various poses above the city wall of the South Gate of Xi'an, Shaanxi Province. Photo/Visual China

"Large-scale festivals are in dire need of new performance formats, and drone companies in the trough are dealing with inventory problems, and the supply and demand sides hit it off. The founder of a drone formation performance company told China News Weekly that many companies at that time replaced the camera at the bottom of the drone with a light bulb and went out to perform a lap to save the company.

EHang, which had already laid off 20% of its workforce at that time, also began to get involved in the drone show business. In less than two years, this market segment, which was initially not valued by the industry, has created unexpected surprises. According to EHang's prospectus, in 2018, the aerial media business with drone shows as the core generated 31.3 million yuan in revenue, accounting for 47% of the total revenue.

The CEO of EHang himself was quite surprised, he once admitted to the media that he initially just wanted to do a regular performance to create a festive feeling, and at the same time to recover some funds for the consumer drone business, but he did not expect that "the formation flight almost had a blowout development", and he did not expect that "the annual income of the formation flight performance may even exceed 100 million".

According to the drone light show industry report released by QYResearch , the global drone light show market size reached US$170 million in 2021 and is expected to reach US$719 million in 2028.

Be wary of becoming the new "face project"

In April 2018, Xi'an, which aspires to become a "hard technology capital", held a world-record drone show over the city walls. But the result was "overturned", after 1374 drones successfully took off, they made frequent mistakes, and the pattern appeared "garbled", and when the performance was recycled, many drones even fell vertically.

The scale did break the world record, but it also messed up the performance. What shocked the outside world even more was that the official announcement showed that the total expenditure of this chaotic drone light and shadow show was 28.28 million yuan, and all the funding sources were financial allocations. Among them, the cost of the drone show project is 10.5 million yuan, and the average "appearance fee" of each drone is more than 7,600 yuan.

According to the interviewed practitioners, the cost of UAV equipment and personnel in the early days was relatively high, and the industry competition was not sufficient, and the price of a single performance was about 10,000 yuan/aircraft. "At the time, no one thought it was expensive. "But the question is, is it worth the tens of millions of dollars in financial allocation to be smashed into a performance?

"There are special funds for municipal publicity work, which are used for the purpose of promoting the city's image, developing tourism, and providing entertainment activities for citizens on holidays. The money has to be spent, the question is how to spend it and how to evaluate the effect. Ye Qing, a professor at Zhongnan University of Economics and Law and former deputy director of the Hubei Provincial Bureau of Statistics, told China News Weekly that different cities have different requirements for propaganda tasks and different evaluation standards.

"Since the Xi'an City Wall performance, government customers have become more cautious about buying performance services. The founder of the above-mentioned drone formation performance company revealed that some local governments no longer come forward to procure, but entrust subordinate state-owned enterprises or media groups to sign contracts with performance service companies, and then the performing arts company and the drone brand contact;

The "episode" of the drop of the plane did not affect the arrival of a large number of orders. Although the Xi'an City Wall drone show was smashed, the company hosting the performance has not been hindered in its development, and it is still the head of the industry. "The performance was mistaken because of signal interference. The company has explained to the public.

For the host city, a performance can not only bring visual enjoyment, but also be filmed into a video by the citizens for secondary dissemination. "The self-propagation capability of drone shows is particularly strong. "Yifei Intelligent Control has calculated that 85% of the audience will take out their mobile phones to shoot, and sixty or seventy percent of them will post the shooting content to the self-media, which spreads quickly, brings its own topic heat and obvious effect.

In recent years, the regional demand for performances has shown a "U" shaped trend. One end of the high demand points to the eastern coastal and first- and second-tier cities, which have basically experienced several rounds of large-scale drone performances, and are no longer strangers to new things, but put forward higher requirements for the artistry of the performance content, and the scale of the performance is larger and the cost is higher;

"Unlike the infrastructure investment of tens of millions of yuan or hundreds of millions of yuan for light shows, the price of drone shows is getting lower and lower, and the development of the industry is not highly dependent on local finance. Yang Jincai analyzed, and the cost of drone formation performance is proportional to the scale, even if local governments buy performance services, they can also do what they can.

Drone show prices are indeed decreasing. According to the public information on the Chinese government procurement website, in 2023, the winning bid price of the "annual package" of the large-scale event city publicity drone formation flight show project in Guangzhou will only be 123,500 yuan.

"More importantly, the management of local fiscal budgets is becoming more and more stringent. Ye Qing said that in the face of economic growth pressure, all localities must be careful in their calculations, and the government will not engage in unnecessary expenditures at this time, and the situation of spending tens of millions of yuan on a drone show will not occur again at least in the short term. In the long run, taxpayers will not be allowed to "spend their money on air" as government affairs are required to be made public and the threshold for oversight is lowered.

However, when the threshold for drone shows is lowered to more than 100,000 yuan or even tens of thousands of yuan, although it will not cause a huge burden on the finances, the necessity of "government procurement" is always prone to controversy. Moreover, at present, it seems that the complete decoupling of industry orders from "government procurement" is not realistic, but the pace of transformation is accelerating.

Different from the market pattern dominated by government customers in the early days, cultural tourism projects and scenic spots are becoming the main part of the drone show market, accounting for 36% of the market in 2021. Taking one of the "Four Little Dragons", Damu Big Technology, as an example, its main business is to meet the needs of cultural tourism, and it has settled in more than 50 domestic theme parks and attractions such as Zhuhai Chimelong Ocean Kingdom, Guangzhou Chimelong Resort, Beijing Gubei Water Town, Huai'an Westward Tour, etc., with a market share of 62.5% in the subdivision of theme parks.

"At present, the proportion of enterprise customers in the industry has reached more than 6 percent, and the proportion of government customers is getting lower and lower. Qi Juntong said that government customer procurement is usually more planned, while the performance needs of enterprise entities are more flexible, and performances are in short supply at this stage.

Real estate and car companies across the country used to be the most important corporate customers. Li Chenliang once received an order from a real estate developer in a county in southwest China for a promotional performance, and the other party strongly stated that he did not need any animated images, and only asked for text advertisements such as real estate and telephone to be "hit to the sky", and the real estate sold well.

Only by getting rid of financial dependence can it be possible to form a sustainable hematopoietic capacity for the industry, and now drone shows are also known as "digital new media in the sky". "Drones can be deeply integrated with all walks of life, or will bring new business opportunities and consumption trends. Yang Jincai said.

Published in the 1115th issue of China News Weekly magazine on November 6, 2023

Magazine title: Behind the popularity of drone shows

Reporter: Li Mingzi

Editor: Min Jie