As fireworks shows and light shows gradually withdraw from the competition for "nighttime scenery", drone shows quickly fill the gap. In the market segment of UAV formation flight performances, Chinese companies lead the world in performance quality and market share. But in addition to speed, drone performances also need to establish a healthy business model. The following is a report from China News Weekly in November 2023.
Behind the popularity of drone performances
At the Shenzhen International Drone Exhibition in June this year, a government employee rushed to the scene from a city 800 kilometers away 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 Dazhi Control Technology Co., Ltd., pointed to the empty seats in the office area and said that all aircraft and technical support personnel are on the field. Performances must be booked at least one month in advance, and production orders have been scheduled until 2024.
In Shenzhen, which has the most mature drone industry chain, there have been multiple performances this year alone. On average, Shenzhen citizens 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 data from Yifei Intelligent Control (Tianjin) Technology Co., Ltd., one of the leading companies in the industry, during the Mid-Autumn Festival and National Day this year, the company and its partners conducted hundreds of drone performances in more than 30 cities in 20 provinces and cities across the country.
On the evening of September 27, a drone show over the Wan Chai waterfront in Hong Kong attracted a large number of citizens and tourists to watch. The drone resembles the famous painting "Girl with a Pearl Earring". Photography/Staff 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. Even in 2021, there were 7,228 domestic drone formation performances.
In just seven years, Chinese companies have ranked first in the world in the field of drone formation performances. However, there are still many controversies and questions that need to be answered by the industry: Is this a promising creative industry or is it not doing business properly? More and more drone performances are lighting up the night sky. Who is paying for it? After light shows are named and regulated, can drone performances avoid becoming a new "face-saving project"?
“Been traveling for a month to perform”
This summer, the flight display on the fireworks night at the Palace of Versailles in France came from a company in Shenzhen, the "Drone Capital".
Hundreds of drones hovered over the Versailles castle in France. The fireworks carried on the fuselage were set off at the right time, and combined with the changes in the drone formation, sometimes they became the feathers decorating the lady's head, sometimes they turned into the tears of the Sun King, falling from the sky and then rising and blooming.
"In the market segment of drone formation flight performances, Chinese companies lead the world in performance quality and market share." Yang Jincai, chairman of the World Drone Conference and founding president of the Shenzhen Drone Industry Association, told China News Weekly that large-scale overseas festivals and exhibitions have invited domestic companies to do so. "In addition to technical capabilities, there is also a price advantage, and the overall cost-effectiveness is high."
Performance market prices have dropped repeatedly in recent years. A single performance is charged on a per-perform basis, and many downstream performance service companies have lowered their fees to one or two hundred yuan per performance. Leading companies have rich experience and high performance safety factors, and can charge up to seven or eight hundred yuan per performance. In other words, if 1,000 drones perform for a few dozen minutes, the company will earn 800,000 yuan in revenue, but this is less than 1/10 of the market price at the peak of the industry.
The price drop has further stimulated demand in the drone performance market. Market consumer subjects have gradually transitioned from the wealthy national team in the early years to leading industries such as real estate and automobiles. Now, they have further declined to many private enterprises.
"A fleet of our company's drones flew away for more than a month and never came back." Qi Juntong, founder of Yifei Intelligent Control and deputy director of the Institute of Robotics and Autonomous Systems of Tianjin University, gave an example. After that fleet of drones performed a government procurement performance in a city in Xinjiang in September, the whole of Xinjiang knew about it. The company receives business performance reservation calls from companies in different counties and cities in Xinjiang every day. "It's like a traveling circus performing from place to place every day."
Whether used to display the city's image or as a regular program, drone formation performances have become the first choice for large-scale event celebrations. After the Mid-Autumn Festival this year and on the eve of the National Day, a joint flight performance was held 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 transformed into dot matrix images such as the fragrance of golden osmanthus, Chang'e flying to the moon, the Tiananmen Gate Tower, the national and regional flags, and Shenzhen and Hong Kong wrestling each other's arms.
"Fireworks can only create an atmosphere, but drone performances can present more precise and specific content." In Yang Jincai's view, drone performances also have low-carbon environmental protection, high-tech, safety and other highlights, and have become a new generation of publicity media. Even before the optimized prevention and control measures are released at the end of 2022, many customers in southern cities are already ready to make the move and start contacting them for performances the following year. "Customers have seen the long-pent-up demand for travel. Whether it is urban tourism promotion or corporate product promotion, they all want to use drone performances to gain attention and traffic." Qin Haiqun analyzed.
The live charm of the drone light show lies in the shock you feel when you look up at the canopy show. The visual stimulation created by the changing light and shadow comes with the pressure of the huge queue in the sky, like science fiction coming into reality.
On October 4, 1,500 drones performed a flying dragon in the sky in Xiangyang, Hubei Province. Picture/Visual China
The earliest drone performances appeared overseas. In the summer of 2012, at the Electronic Arts Festival held in the northern Austrian city of Linz, more than 90,000 spectators gathered on both sides of the Danube River to witness the world's first outdoor drone performance. In 2016, Raphael D'Andrea, a professor at ETH Zurich, performed a swarm of micro-drone on the TED stage, attracting countless attention overnight.
Subsequently, Intel successively set world records for the scale of performances, and also participated in the opening ceremony of the Pyeongchang Winter Olympics, completing the first drone light show in Olympic history.
What really brought drone performances to the public eye was the 2017 Super Bowl pre-stage in the United States. When the popular Lady Gaga sang loudly, the starry sky behind her changed instantly. In less than 30 seconds of footage, the drone performance even overshadowed the discussion about Lady Gaga's strange costumes.
"Overseas companies have created new forms of drone performances, but they have not quickly formed an industry in this segment." Li Chenliang, creative director of GaoJu, a leading domestic drone company, analyzed that for example, Intel only used performances as a way to promote the company's image and product performance, and did not focus on the development of the performance market. The potential of this emerging market was quickly released domestically.
However, there are not many companies in the industry that can provide safe and stable large-scale formation performances, and there are even fewer drone brands that provide both performance services and independent research and development and production.
Shenzhen Gaoju Innovation, Shenzhen Damo Dazhikong, Guangzhou Ehang Intelligent and Tianjin Yifei Intelligent Control are known as the "Four Little Dragons" in the field of drone performance. According to the Shenzhen Drone Industry Association, these four companies and their service providers dominate more than 90% of the domestic performance market.
In order to demonstrate 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 period, only domestic companies were left to be crazily involved. "It is easy to win the world championship, but it is too difficult to win the domestic championship." The scale of the performance has rapidly increased from dozens to hundreds or thousands of aircraft, the performance time has been doubled, and the performance can even be performed in special environments such as severe winter and high altitude.
In May 2021, Goju Innovation brought 5,200 self-developed drones to the Shenzhen Longgang Universiade Sports Center and set four Guinness World Records in one fell swoop: the most drones flying at the same time, the largest light source image formed by drones, the longest animation performed by drones, and the most continuous formations formed by the same group of drones. Currently, these four records are still held by GaoJu Innovation.
"From a technical point of view, it is not a problem to control tens of thousands of drones for performances at the same time, but this obviously exceeds the current market demand, and it does not make much sense to simply set a record." Li Chenliang responded.
"Performing for ten minutes, the difficulty lies behind the scenes"
Behind the exponential expansion of the scale of drone formation performances is the integration of technologies across multiple professional fields.
Li Chenliang said that to control thousands of drones to move accurately according to pre-designed three-dimensional animations, and to accurately display pre-designed animation effects at an altitude of 100 meters, the entire system operation covers multi-rotor aircraft, automatic control, wireless communications, trajectory planning, three-dimensional modeling and simulation, LED lighting programming and other majors.
At the opening ceremony of the 2022 Beijing Winter Olympics, Shenzhen, the only southern coastal city to appear in the warm-up session, used 2,022 drones to make a snowfall. Subsequently, "Bingdundun" and "Xuerongrong" composed of drones came from the sky, and every "snowflake" in the night was dynamic and three-dimensional.
"The biggest difficulty in the drone performance at the opening ceremony of the Winter Olympics was the continuous 3D dynamic transformation." Li Chenliang, innovation and creative director of Gaoju, the performance provider, said that compared with simple picture presentation, 3D performances have higher requirements on the stability of drone cluster control and the reliability of communication in complex environments.
The trajectory of each aircraft is precisely calculated and tested repeatedly. In the design stage, staff will produce text, images and other performance content in the form of three-dimensional 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 unique position in the sky to ensure the animation content is flexible and delicate, which requires more precise positioning technology. "Now the flight accuracy can reach centimeter level." Li Chenliang recalled that he first started to develop dual-frequency RTK positioning technology to complete the 2018 Spring Festival Gala performance, where 300 drones composed of Chinese white dolphins jumped over the Hong Kong-Zhuhai-Macao Bridge. It was the first large-scale 3D drone formation performance in China. One minute on stage, and nearly three months off stage just to research the positioning technology.
The greater the number of drones, the richer the picture expression will naturally be. However, the expansion of fleet size also means that the amount of communication data increases exponentially, which places higher requirements on backend load and database analysis capabilities. In order to enhance the accuracy of data transmission, each company also shows its strengths. "Drone performances usually do not use the 3G or 4G communication public network." Qin Haiqun explained that when the number of live audiences increases and terminal devices such as mobile phones reach a certain scale, the public network will be severely congested, causing the communication system to fail and the formation drones will not be able to take off normally. This is also one of the main obstacles encountered by some domestic drone formation performances. The approach of Damo Dizhikong is to form a self-organized local area private network for communication, thereby avoiding interference from the operator's communication frequency or WIFI frequency band.
The execution team has to go through countless tests and failures before completing a formal performance with "zero errors." Li Chenliang said that pre-flight site survey work is also crucial, especially electromagnetic environmental interference, satellite reception strength and other conditions: "In jargon, the final destination of any drone is a bombing, but no company can afford the consequences of a bombing during a performance."
A drone shape composed of drones. On October 23, the low-altitude economic carnival drone show in Longhua District, Shenzhen, Guangdong was held in the North Station Central Park. Picture/Visual China
On the evening of August 11 this year, while a drone show was held at Dongguan Xiangshi Zoo, nearly a hundred aircraft suddenly lost control and fell. Afterwards, the park explained to the media that it was because it received a temporary notice from air traffic control and only damaged the machine. No one was injured at the scene.
Since 2017, the country 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, falling accidentally, affecting the normal takeoff and landing of passenger planes, and colliding with high-rise buildings still occur from time to time.
"UAV formation performances are not something you can just fly if you want." Yang Jincai said that before the official performance, the execution company needs to submit a large amount of qualification materials to apply for airspace. After obtaining the airspace permit, it will bring more than ten materials such as security plans, emergency plans, and commercial insurance certificates to the local public security department for filing. The strict approval process makes it more difficult for late entrants to get a share of the market.
"The difficulty of a ten-minute performance is behind the scenes." Qin Haiqun said. Technological advances in multiple fields have jointly supported large-scale, high-precision drone formation performances. The continuous optimization and iteration of technology has not only reduced the accident rate, but also improved the visual perception. Currently, drone performances are comparable to holographic projections in terms of effect.
However, in the face of increasingly lower performance pricing, leading companies are also adjusting their business layout and returning to the main battlefield of consumer drone sales. "Hundreds of small-scale performances are basically no longer accepted." Li Chenliang said that the charge for a single performance is only tens of thousands of yuan, which may not be enough to cover the cost of personnel travel and equipment losses. In recent years, leading companies have been expanding overseas markets. However, due to the approval requirements for overseas performances, most companies have adopted the method of selling aircraft and providing technical support services to "go overseas."
“If you can’t kill DJI, kill the fireworks.”
Looking back on the "fork in the road" that led to the formation performance, drone companies feel somewhat helpless.
Since 2012, the domestic drone industry has entered a stage of rapid development. By around 2015, Shenzhen had gathered two to three hundred drone companies. The advantage is that the industrial chain is mature, and a drone can be built without leaving Nanshan District. The disadvantage is that the industry is uneven. At that time, there were rumors in the industry that some start-up companies could obtain 30 million yuan in financing with PPTs without any physical products.
Everyone wants to be the “next DJI”, but there are no shortcuts to technology research and development. Capital does not allow investors to spend a lot of time on technology accumulation, forcing startups to rush to market products with unstable performance. "These drones may seem cost-effective, but in fact they hide endless after-sales risks. A large number of companies have perished due to insufficient front-end research and development and poor after-sales service," Li Chenliang said.
2015 is also a watershed year for the global drone industry. According to a venture capital report jointly released by KPMG and CBInsights, in the third quarter of that year, the financing scale of the global drone industry reached a historical peak of US$140 million. By the same period in 2016, the financing scale was only US$55 million, and the investment scale shrank by nearly half within a year. The rapid ebb of capital has pushed many drone brands that originally relied on financing to survive, to the brink of death.
Around 2016, there were not many downstream customers left. In order to ensure stable production at the factory, Gaoju Innovation, which started in the manufacturing industry, simply launched its own drone in 2017. After ChinaJoy debuted that year, it unexpectedly received a large number of performance orders.
At that time, domestic drone performances were mainly organized by public institutions. In 2016, CCTV National Defense and Military Channel planned a drone-themed performance art performance to commemorate the 80th anniversary of the victory of the Red Army's Long March. This was the first drone performance recorded on video in China. Shenzhen Damo Dazhikong, which hosted the show, had just been established at the time. Although it had successfully developed its own central control system and built a prototype, its products had not yet established a foothold in the consumer market.
“I’ve probably been asked about the well-known UAV companies in Shenzhen, and Desert Dazhikong was the first one that dared to accept performance orders.” Qin Haiqun recalled the situation at that time, and the company had the momentum of “a newborn calf is not afraid of tigers”. At that time, the entire industry was focused on technology research and development, and "performance" always gave people a feeling that they were not doing their job properly.
When 80 aircraft with red five-pointed stars on their fuselage performed in the air in a predetermined formation, they received bursts of cheers from the audience. This also allowed Damo Dazhikong to see the infinite possibilities in the emerging market of drone formation performance. “The key is to have stable repayments and guaranteed cash flow,” said Qin Haiqun. Since then, orders for CCTV Spring Festival Gala, festival performances, international exhibition performances, etc. have come one after another. The development focus of Damo Dizhi naturally tilts towards the field of formation performance.
Market demand is expanding rapidly, attracting more companies to enter the market. Guangzhou Ehang, the leading drone company, established a subsidiary in June 2016 to test the drone formation performance business. Goju Innovation also launched its own brand of consumer drone products in 2017. In the northern market, Tianjin Yifei Intelligent Control, which focuses on the development and application of intelligent unmanned equipment control system solutions, also started the drone performance business three years after its establishment. This formed a situation in which the industry was divided into four pillars.
"In the early stages of the development of the industry, the government played a strong driving role." Yang Jincai said that more than half of the industry's early market orders came from local governments and enterprises and institutions. At that time, local finances were relatively abundant, and large-scale festivals also had the urgent need to "find new performance forms to replace fireworks and light shows."
After the "Regulations on the Safety Management of Fireworks and Firecrackers" was promulgated 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%.
City lighting projects, including light shows, have also been put on hold. In the past few years, various regions have followed suit and promoted comprehensive urban lighting projects. Some poor areas and underdeveloped towns have also invested heavily in launching "face-saving projects" related to lighting projects. Wanquan County in 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 lighting, musical fountains, laser projection and other facilities and technologies. A week after the incident was exposed, Wanquan District Party Committee Deputy Secretary and District Mayor 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 Excessive "Landscape Lighting Projects" to inspect and deal with "performance projects" and "face projects" that "violate the laws of urban development, exceed the carrying capacity of resources and the environment, exceed local financial resources, and deviate from the will of the people."
As fireworks shows and light shows gradually withdraw from the competition for "nighttime scenery", drone shows quickly fill the gap.
On April 29, 2018, thousands of drones arranged various shapes on top of the south gate city wall of Xi'an, Shaanxi Province. Picture/Visual China
"Large-scale festivals are in urgent need of new performance forms. Drone companies in the trough period just have to deal with inventory problems, and the supply and demand ends are in sync." The founder of a drone formation performance company told China News Weekly that at that time, many companies replaced the cameras at the bottom of the drones with light bulbs and went out to perform a round, which could save the company.
EHang, which had laid off 20% of its employees at that time, also began to get involved in the drone performance business. In less than two years, this market segment, which was initially ignored by the industry, has created unexpected surprises. According to the prospectus of EHang Intelligence, in 2018, the aerial media business with drone performances as its core generated revenue of 31.3 million yuan, accounting for 47% of the total revenue.
The CEO of EHang Intelligence was also quite surprised. He once admitted to the media that at first he just wanted to perform regular performances to create a festive feeling, and at the same time do some fund recovery for the consumer drone business. He did not expect that "formation flying has almost experienced a blowout development", and he did not expect that "the annual revenue of formation flying performances may even exceed 100 million."
According to a drone light show industry report released by Hengzhou Bozhi, the global drone light show market will reach US$170 million in 2021, and is expected to reach US$719 million in 2028.
Be wary of becoming a new “face project”
In April 2018, Xi'an, which aspires to become a "capital of hard technology", held a world-record drone show above the city wall. But it turned out to be a "rollover". After 1,374 drones successfully took off, they made frequent mistakes and the patterns appeared "garbled". When the performance was over, many drones even fell vertically.
The scale did break the world record, but it also ruined the performance. What is even more shocking to the outside world is that the official announcement shows that the total expenditure for this chaotic drone light and shadow show is 28.28 million yuan, and the funding source is all financial allocations. The cost of the drone performance project is 10.5 million yuan, and the average "appearance fee" for each drone exceeds 7,600 yuan.
According to interviewed practitioners, early drone equipment costs and personnel costs were relatively high, and industry competition was not sufficient. The price of a single performance was about 10,000 yuan/unit. "No one thought it was expensive at the time." But the question is, is it worth spending tens of millions of dollars on a performance?
"There are special funds for municipal publicity work, which are used to promote the city's image, develop tourism, and provide entertainment activities for citizens during holidays. This money must 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 publicity task requirements and different evaluation standards. As for how much real money benefits publicity and promotion activities can bring to the city, it is even more difficult to directly calculate.
"Since the Xi'an City Wall performance, government customers have become more cautious in purchasing performance services." The founder of the above-mentioned drone formation performance company revealed that some local governments no longer purchase the services themselves, but instead entrust subordinate state-owned enterprises or media groups to sign contracts with performance service companies, and then the performance companies contact the drone brands; or they set up a stage to sing and attract local companies to sponsor the performance, and at the same time add corporate advertising to the performance content, thereby reducing financial expenditures.
The "interlude" of the plane falling did not affect the arrival of a large number of orders. Although the Xi'an City Wall drone show was a failure, the company that hosted the show has not been hindered in its development and is still the industry leader. "The performance error was due to signal interference." The company once explained.
For the host city, a performance not only brings visual enjoyment, but can also be captured on video by citizens for secondary dissemination. “Drone performances have particularly strong self-propagation capabilities.” Yifei Intelligent Control once calculated that 85% of the audience will take out their mobile phones to take pictures, and 60 to 70% of them will post the filming content on self-media. The spread speed is fast, the topic is hot, and the effect is obvious.
In recent years, the regional demand for performances has shown a "U"-shaped trend. Those with high demand point to the eastern coast and first- and second-tier cities. They have basically experienced several rounds of large-scale drone performances and are no longer unfamiliar with new things. However, they have higher requirements for the artistry of the performance content. The scale of the performances is larger and the cost is higher. The other end is in sinking cities and the central and western regions. Many towns are seeing drone performances for the first time. Even if the same show is performed for three or four days in a row, the venue can be full.
"Unlike light shows, which often cost tens of millions or hundreds of millions of yuan in infrastructure investment, the price of drone performances is getting lower and lower, and industry development is not highly dependent on local finances." Yang Jincai analyzed that the cost of drone formation performances is proportional to the scale. Even if local governments purchase performance services, they can do so within their capabilities.
Drone performance prices are indeed falling. According to public information from the China Government Procurement Network, in 2023, the "annual" winning bid price for the Guangzhou large-scale event city promotion drone formation flight display project is only 123,500 yuan.
"More importantly, local fiscal budget management is becoming more and more strict." Ye Qing said that in the face of economic growth pressure, all localities must be careful with their budgets. The government will not make unnecessary expenditures at this time. Tens of millions of yuan spent on a drone show will not happen again, at least in the short term. In the long run, as government affairs are required to be open and the supervision threshold is lowered, taxpayers will not be allowed to "spend money on air."
But when the threshold for a drone show is lowered to hundreds of thousands or even tens of thousands of yuan per show, although it will not cause a huge financial burden, the necessity of "government procurement" is always likely to cause controversy. Moreover, it seems that it is unrealistic to completely decouple industry orders from "government procurement", but the pace of change is accelerating.
Different from the market structure dominated by government customers in the early stage, cultural tourism projects and scenic spots are becoming the focus of the drone performance market, with a market share of 36% in 2021. Take Damo Big Technology, one of the "Four Little Dragons", as an example. Its main business is to meet the needs of cultural tourism. 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, and Huai'an Journey to the West. Its market share in the theme park segment has reached 62.5%.
"At present, the proportion of enterprise customers in the industry has reached more than 60%, and the proportion of government customers is getting lower and lower." Qi Juntong said in comparison that procurement by government customers is usually more planned, while the performance needs of corporate entities are more flexible. At this stage, the supply of performances is in short supply.
Real estate and car companies across the country were once the most important corporate customers. Li Chenliang once received an order for a publicity performance from a real estate developer in a county in southwest China. The other party firmly stated that he did not need any animated images and only requested text advertisements such as real estate listings and phone calls to be "shot to the sky." As a result, the real estate was sold well.
Only by getting rid of financial dependence can it be possible to form sustainable capabilities for the industry. Today, drone performances are also called "sky digital new media." "Drones can be deeply integrated with various industries and may bring new business opportunities and consumer trends." Yang Jincai said.