Sources of economic growth for SpaceX, reusable rockets

[zd4]

Following a great talk by representatives of SpaceX, Sierra Nevada and Orbital -
"The Future of the U.S. Space Program"

Came up in discussion, mostly between the representative of Orbital (Antonio Elias) and of SpaceX (Adam Harris) a great question of where is the source for economic growth in Space.

Representative of Orbital pointed out the following observations (among others):
1. Innovation in rocketry has stagnated mostly because rockets have already reached close to physical limits of efficiency in terms of structural mass fraction and Isp, which are the key indicators.
2. New manufacturing techniques for rockets are limited in the benefit of what they can do to reduce cost.
3. A TV broadcast company typically pays (according to Orbital representative)
~3% of the cost for launch.
A typical NASA mission (assuming - science mission)
~12% of the cost for launch
A typical DOD mission
~18%
Launch NASA payload to the ISS
~35%
And the argument made is that therefor, is that even if you can cut the cost in half - it is a lot only for the case of servicing the ISS.

- It was also mentioned that there are only about 20 -25 commercial satellite launches per year.

So the question: Given these 3 points - what is the source of economic growth for SpaceX?
(unless the assumptions are incorrect, in which case please point out how).

My attempt at answering -
- In the near term, say, until 2020 its safe to assume SpaceX will still have ISS service missions. Its also safe to assume that for the next 5 years they will continue to catch more of the commercial satellite launches since they are far ahead of competition. But over the longer term the commercial launch market will be saturated, both by the limited number of launches and by the fact competitors will improve efficiency.
ISS will be deorbited we can assume by 2020. DOD and NASA science / deep space payloads - SpaceX would surely get some of those but there are less incentive on the part of NASA / DOD to give them all to SpaceX since from point 3 the economics are less of a factor.

- Given the above point, and points 1 and 2, I think first thing to say is that for SpaceX to continue to enjoy rapid growth they absolutely need reusability, and furthermore they need to increase the number of launches significantly.

- Further launch number growth could come from two possible source types:
A. If the number of satellites will increase (from the numbers in point 3, this could only come not from reusability of rockets but from innovation in satellite technology).
B. New markets that can only be made possible by lower costs due to reusability. I can think of a few:
*Commercial R&D in microgravity i.e. big farma. 
*Satellite servicing.
*Space tourism.

- The first and third heavily depend on having a commercial / private space station. All 3 could involve the DreamChaser. This leads me to think that there could be a great deal of cooperation going forward for SpaceX with both SNC and Bigelow.

-Criticism both negative and positive of this analysis is welcomed.

[TrevorMonty]

I don't see satellite servicing as increasing flights as it eliminates the need for a replacement satellite.

But I do think there is market for servicing expensive satellites especially billion dollar DoD ones.

[GregA]

Representative of Orbital pointed out the following observations (among others):
<snip> 3.
A TV broadcast company typically pays (according to Orbital representative)
~3% of the cost for launch.
A typical NASA mission (assuming - science mission)
~12% of the cost for launch
A typical DOD mission
~18%
Launch NASA payload to the ISS
~35%
And the argument made is that therefor, is that even if you can cut the cost in half - it is a lot only for the case of servicing the ISS.

Thanks for the link, I look forward to being able to watch it properly (just started the work day!). So apologies if I'm misunderstanding your summary above.

So they said for the ISS payloads, 35% of sending them up is the rocket launch. While for TV companies only 3% of getting their TV satellite is the rocket launch.

This makes sense if you look at the cost of the payload.

The ISS needs food & water and lots of day-to-day supplies, cheap and expensive experiments, and people. The cost of the payload is much lower. A TV satellite is far more expensive and complicated, and beyond just the expensive broadcast equipment requires a power source, remote management, its own thrusters etc to hold its place.

One of the things that holds back space development is the expense of getting anything to orbit, even cheap 'building material', so the more the cargo can do to support some important ground-based need the more viable it becomes (because the rocket is a small price for the reward).

So the money comes from the lifting of high volumes of basic materials that are needed (with 95% success rate) and then adding the lifting of people (with near perfect success rate).

edit: for the record, I don't think 95% is realistic, just illustrating the idea of "a cheap truck of metal to get to space" not needing the same perfection of human or "really expensive satellite" launches. Of course if you're re-using the rockets you need them to work very well!

[Coastal Ron]

Great topic.

I would disagree with your assumption that the ISS will go away in 2020, but for the purposes of this exercise I'll assume it does end in 2020.

I think that until reusability is proven out, likely over a period of years, that we won't see a significant change in the existing commercial and government satellite market.

However, and this may not seem intuitive, I think cargo and crew deliveries to LEO will be the part of the market that would use reusability the quickest.  Both have backup safety systems (i.e. the Dragon EDS) so that their payloads can be recovered in the event of a launch failure, which means they can accept a larger degree of risk in pursuing new business models.

For cargo, the demand for that will be tied to the number and types of destinations we have in LEO.  To a degree the same is true for crew, but there is the added potential market for space tourism - although I tend to think of tourism as an outgrowth of expanding commerce and other work-related activities, and not the other way around.

This will likely be the first plateau that SpaceX will reach as far as economic growth.  However, once reusability is proven and the pricing seems stable I think entrepreneurs and companies will start testing out new ideas and business models that would only be possible because of reusability.  These new areas of demand will drive SpaceX into new growth.  Most of this is likely to not be HSF related though.

Other than the demand that Bigelow Aerospace can generate with their private stations, I just don't see that much HSF activity happening outside of the existing ISS partners (both during and after the ISS) and whatever SpaceX has planned with their internal projects (which only consume funds, and won't generate any revenues).  That's based on how much money all the world governments, including our own, seem to want to spend on HSF these days - which isn't really that much.

What I've been forecasting probably goes out through 2030, but not beyond, which isn't a lot of demand.  But maybe that's enough for what SpaceX wants to do on their own, which is something we all have to remember is one of their primary goals.

My $0.02

[TrevorMonty]

Thanks for great, just watched video.

I was impressed by Antonio from Orbital. Sounds Orbital are predicting mass launches of small/ cube satellites. I suspect they will be building some of these  constellations. If that is case the small LV manufacturers eg Firefly will benefit the most. SpaceX F9 if it can reduce costs with reusability.

There is reduced risk doing small launches of say 10 satellites with no insurance than a large launch of 100 with insurance. It is easier to build another 10 compared to 100 if a launch failures.

[KelvinZero]

I can't really think of any growth except tourism but I don't know much about that.

I think (and hope) that regardless of what happens to the ISS in 2020 there will be a lot of inertia by that point to keep doing the same things using the same people. The huge inertia behind the SDLV and the totally nonsensical calls it continually spawns to throw everything of use away probably can be taken as examples of how much political inertia will help rather than hinder ISS-like research using commercial cargo and crew by 2020, even if we dont have an ISS. Look at the inertia behind SLS even without a plausible mission. It will be easy to invent something for ISS-researchers and commercial launchers to do.

[R7]

what is the source of economic growth for SpaceX?

Maaaaaaaaars?

[guckyfan]

So they said for the ISS payloads, 35% of sending them up is the rocket launch. While for TV companies only 3% of getting their TV satellite is the rocket launch.

This makes sense if you look at the cost of the payload.

The ISS needs food & water and lots of day-to-day supplies, cheap and expensive experiments, and people. The cost of the payload is much lower. A TV satellite is far more expensive and complicated, and beyond just the expensive broadcast equipment requires a power source, remote management, its own thrusters etc to hold its place.

There is a misunderstanding. The 3% is not launch vs. satellite. The ratio includes all involved services including ground stations, operation and services over the satellites life time. The satellites are in the 100-200 million Dollar price range so launch cost share would be in the 25-50% range depending on satellite and launch vehicle.

[aero]

So is it Launch % = launch costs / all costs, or is it Launch % = launch costs / all other costs?
Or is it Launch costs + launch related costs / all (or all other) costs?

[guckyfan]

So is it Launch % = launch costs / all costs, or is it Launch % = launch costs / all other costs?
Or is it Launch costs + launch related costs / all (or all other) costs?

We can't know what exactly they were comparing. However we can be absoluely certain with 3% launch cost it was not launch vehicle cost vs. payload cost.

[MP99]

Note that Antonio also said that market elasticity tends to be over-estimated in the short term and under-estimated in the long term (EG a sustained Mars campaign).

Cheers, Martin

[CuddlyRocket]

So the question: Given these 3 points - what is the source of economic growth for SpaceX?
(unless the assumptions are incorrect, in which case please point out how).

One hidden assumption is that SpaceX is interested in economic growth!

Obviously SpaceX needs a positive margin to pay for the research and development of the transportation infrastructure to Mars. But cutting costs enables you to maintain your margin even if your turnover declines.

We may get to the stage where the size of the space market declines because people are doing the same things at lower cost. Hopefully, eventually people will think of things to do what will then be possible because of the lower cost and the size of the market will then recover and eventually exceed what it is at present. To some extent this is a matter of faith, but as Elon says, unless we get the cost down drastically nothing will change.

[gin455res]

Could an F9R sensibly launch a (perhaps, skip glide) hypersonic transport?

Possibly skip a few times till the thing settles down to ramjet speeds [mach 4?-6? - then maybe stop skipping]

[Burninate]

If launch was free, you would see *marginal* costs for the above cut down by mass-producing anything it makes sense to mass-produce, and automating as much of the operations department as possible.  You would see an expansion of the total market via a 30-satellite fleet costing only slightly more to produce than 1 satellite.

The ceilings here are places where 30 satellites don't help you - where spectrum or broadcast content or consumer-market for the service is inherently, structurally limited.

Also: This sort of expansion essentially requires us to settle on a legal framework that compels us to begin removing orbital debris.

[AncientU]

If launch was free, you would see *marginal* costs for the above cut down by mass-producing anything it makes sense to mass-produce, and automating as much of the operations department as possible.  You would see an expansion of the total market via a 30-satellite fleet costing only slightly more to produce than 1 satellite.

The ceilings here are places where 30 satellites don't help you - where spectrum or broadcast content or consumer-market for the service is inherently, structurally limited.

Also: This sort of expansion essentially requires us to settle on a legal framework that compels us to begin removing orbital debris.

...orbital debris.  Now that you mention it, orbital debris removal is a mass market for launch services if/when things start colliding in a cascade fashion or if we ever intend to be other than casual visitors above the atmosphere.

[Burninate]

If launch was free, you would see *marginal* costs for the above cut down by mass-producing anything it makes sense to mass-produce, and automating as much of the operations department as possible.  You would see an expansion of the total market via a 30-satellite fleet costing only slightly more to produce than 1 satellite.

The ceilings here are places where 30 satellites don't help you - where spectrum or broadcast content or consumer-market for the service is inherently, structurally limited.

Also: This sort of expansion essentially requires us to settle on a legal framework that compels us to begin removing orbital debris.

...orbital debris.  Now that you mention it, orbital debris removal is a mass market for launch services if/when things start colliding in a cascade fashion or if we ever intend to be other than casual visitors above the atmosphere.

A rapid collisional cascade is the time when orbital debris removal *ceases* to be an option.  We have to take down debris in a preemptive fashion if we want to save Earth Orbit.

We've already had natural collisions occur.  They're only going to get more frequent over time, unless we push hard enough to solve this https://en.wikipedia.org/wiki/Free_rider_problem

[mvpel]

A rapid collisional cascade is the time when orbital debris removal *ceases* to be an option.  We have to take down debris in a preemptive fashion if we want to save Earth Orbit.

We've already had natural collisions occur.  They're only going to get more frequent over time, unless we push hard enough to solve this https://en.wikipedia.org/wiki/Free_rider_problem

In that vein, the Air Force is expected to announce the Space Fence award in the near future, according to the Washington Post's March 14 article.

[sghill]

SpaceX (and perhaps others) is going to have a reusable 1st stage booster (versus returnable) in the near future unless some technical difficulty proves that it's unworkable as a business model. But keep in mind that the development cost is going to be a sunk cost at that point. 

OK, so what do the economics of that reusable booster look like?  The US military isn't going to care much at first about reusability for its payloads because mission assurance plays an out-sized role in their launch cost calculations.  Non-compete launches won't be affected at all.  Civilian launches will care a great deal.  A million $$ is a million $$ to an investor, so even small improvements over launch costs by implementing reusability will wildly drive existing businesses to a reusable booster operator.  This assumes the MAJOR point that the benefits of reusability are ultimately passed along from the operator in the form of lower launch pricing to customers. They may not be.

Because existing business is very nearly a zero-sum game, commercial Soyuz, Arianespace, Orbital, and other commercial launch operators are going to take the hit first in the short term until they can respond with lower offered price points of their own through whatever means they have at their disposal.  A greater share of the existing market may be just fine for justifying the expense of maintaining a few reusable boosters (remember always that by this point they've already spent the money to develop it, so it's no longer counted) versus more cheaply building expendables.  And taking the thought to it's logical conclusion, reusability may ultimately eliminate any justification for expendables in a given booster class.  If reusability drives down launch costs to the operator or the customer (or both), expendability will go away for missions that use that sized booster.  There is no economic model where a customer buys a cargo ship to use it once- even if the value of the cargo is greater than that of the ship- when a reusable ship is available at a lower cost. 

Long-term this pressure will continue to trickle up into launches where competition exists, but where cost is secondary to mission assurance (such as U.S. military launches or NASA science launches).  That second phase may take years, allowing competitors time to respond, perhaps with reusability of their own, or perhaps with other pricing reduction techniques. 

Along with the zero-sum game of existing business however, is the positive-sum game of creating new markets with disruptive technology and techniques. 

If a reusable rocket (and lower launch pricing) can boost "dumb and dumber" items into space- such as construction materials instead of complex communications satellites- then a new market for frequent launches may develop as some entity seeks to make something up there or do anything other than the three primary space activities of launching self-contained telecommunications, science, and reconnaissance missions.  The list beyond these three things is endless if launch costs go down. If the dynamics of launch pricing change, then new customer entrants may need frequent, cheap, launch services for some different need, and that's where reusability could have its greatest impact.

To recap, here are the benefits of an operational reusable booster with (assumed) lower operational costs than CAPEX costs compared with an expendable booster:
1) internally for the operator- CAPEX per launch may be lowered through reusability to increase profits without changing market share (e.g. pricing doesn't change, but internal costs are lower).
2) existing market- reusability lowers launch costs and takes market share from other operators to make its business case.
3) new market- reusability lowers launch costs and creates new markets to make its business case.
Any combination or mash-up of the above works as well.

Recap of my recap:  If reusability drives down launch pricing, new launch purchasing opportunities will materialize along the demand curve- as would be expected with the pricing of any sort of widget.   If reusability drives down launch pricing and/or costs, expendability will go away for price-competition missions that use that sized booster.

[mgfitter]

So is it Launch % = launch costs / all costs, or is it Launch % = launch costs / all other costs?
Or is it Launch costs + launch related costs / all (or all other) costs?

We can't know what exactly they were comparing. However we can be absoluely certain with 3% launch cost it was not launch vehicle cost vs. payload cost.

To me, this is such a good question that if I were in aero's shoes, I'd send it (and a link to this thread) directly to Chris Bergin and ask him if he'd mind asking Antonio for us, after all Antonio has been good enough to answer many question from this forum in the past.

-MG.

[zd4]

SpaceX (and perhaps others) is going to have a reusable 1st stage booster (versus returnable) in the near future unless some technical difficulty proves that it's unworkable as a business model. But keep in mind that the development cost is going to be a sunk cost at that point. 

OK, so what do the economics of that reusable booster look like?  The US military isn't going to care much at first about reusability for its payloads because mission assurance plays an out-sized role in their launch cost calculations.  Non-compete launches won't be affected at all.  Civilian launches will care a great deal.  A million $$ is a million $$ to an investor, so even small improvements over launch costs by implementing reusability will wildly drive existing businesses to a reusable booster operator.  This assumes the MAJOR point that the benefits of reusability are ultimately passed along from the operator in the form of lower launch pricing to customers. They may not be.

Because existing business is very nearly a zero-sum game, commercial Soyuz, Arianespace, Orbital, and other commercial launch operators are going to take the hit first in the short term until they can respond with lower offered price points of their own through whatever means they have at their disposal.  A greater share of the existing market may be just fine for justifying the expense of maintaining a few reusable boosters (remember always that by this point they've already spent the money to develop it, so it's no longer counted) versus more cheaply building expendables.  And taking the thought to it's logical conclusion, reusability may ultimately eliminate any justification for expendables in a given booster class.  If reusability drives down launch costs to the operator or the customer (or both), expendability will go away for missions that use that sized booster.  There is no economic model where a customer buys a cargo ship to use it once- even if the value of the cargo is greater than that of the ship- when a reusable ship is available at a lower cost. 

Long-term this pressure will continue to trickle up into launches where competition exists, but where cost is secondary to mission assurance (such as U.S. military launches or NASA science launches).  That second phase may take years, allowing competitors time to respond, perhaps with reusability of their own, or perhaps with other pricing reduction techniques. 

Along with the zero-sum game of existing business however, is the positive-sum game of creating new markets with disruptive technology and techniques. 

If a reusable rocket (and lower launch pricing) can boost "dumb and dumber" items into space- such as construction materials instead of complex communications satellites- then a new market for frequent launches may develop as some entity seeks to make something up there or do anything other than the three primary space activities of launching self-contained telecommunications, science, and reconnaissance missions.  The list beyond these three things is endless if launch costs go down. If the dynamics of launch pricing change, then new customer entrants may need frequent, cheap, launch services for some different need, and that's where reusability could have its greatest impact.

To recap, here are the benefits of an operational reusable booster with (assumed) lower operational costs than CAPEX costs compared with an expendable booster:
1) internally for the operator- CAPEX per launch may be lowered through reusability to increase profits without changing market share (e.g. pricing doesn't change, but internal costs are lower).
2) existing market- reusability lowers launch costs and takes market share from other operators to make its business case.
3) new market- reusability lowers launch costs and creates new markets to make its business case.
Any combination or mash-up of the above works as well.

Recap of my recap:  If reusability drives down launch pricing, new launch purchasing opportunities will materialize along the demand curve- as would be expected with the pricing of any sort of widget.   If reusability drives down launch pricing and/or costs, expendability will go away for price-competition missions that use that sized booster.

Great post.
I agree with both points: on SpaceX winning a larger share of the commercial launch pie with reusability. And the possibilities for new markets.

On the first point, this is what many miss out when they say that the economics of reusability don't work without a great increase in the number of rockets (to 50 - 60 a year according to Antonio in the video, from a research Orbital did). Even if it is true that revenue will decrease with reusability, SpaceX could still gain by taking a larger share of a smaller pie. Competitors would have to either follow with reusability or loose commercial / non strategic market share over time. Again, this only assumes the number of launches per year does not significantly increase. It wouldn't be considered a good outcome if SpaceX would just take a larger share of an even more consolidated market, and that would be the end of it. I think, or at least expect that the number of launches will increase dramatically.

Regarding new markets, I think this is, for me at least, where the excitement is regarding 'NewSpace', especially the prospects of new habitats in space, even a commercial space station using Bigelows modules at some point in the future.

To expand on a thought regarding expansion of the number of launches for the commercial satellite market:
 from the 3% number Antonio gave, assuming this meant out of total expenditure which makes sense, it seems unlikely to me that reusability alone would completely change the business model of TV broadcast companies that would lead them to launch much more ofter. If we assume 100 - 200M$ for the satellite itself, which was a number frown here, this also confirms that there is more to it than just the rockets that keep the number of launches low. But what about the prospect of reusability coupled with innovation in satellite technology leading to a launch once in every 5 years instead of once in every 20 years or so?
Someone with more knowledge on the commercial satellite market might be more equipped to answer that.
It would also interesting how the prospect of satellite servicing might fit into the picture.

[Jim]

To expand on a thought regarding expansion of the number of launches for the commercial satellite market:
 from the 3% number Antonio gave, assuming this meant out of total expenditure which makes sense, it seems unlikely to me that reusability alone would completely change the business model of TV broadcast companies that would lead them to launch much more ofter. If we assume 100 - 200M$ for the satellite itself, which was a number frown here, this also confirms that there is more to it than just the rockets that keep the number of launches low. But what about the prospect of reusability coupled with innovation in satellite technology leading to a launch once in every 5 years instead of once in every 20 years or so?
Someone with more knowledge on the commercial satellite market might be more equipped to answer that.

There is a limited number of orbital slots for GSO comsats.  Spacecraft on similar frequencies can only be placed so close.  Also, what innovation?

[Elmar Moelzer]

It is funny. Antonio claimed that satellites will become smaller. This will actually be beneficial for SpaceX, because it will put more GSO satellites within the capabilities of the fully reusable F9. It would mean less work for the (probably less economic) Falcon Heavy but more work for F9.

[zd4]

To expand on a thought regarding expansion of the number of launches for the commercial satellite market:
 from the 3% number Antonio gave, assuming this meant out of total expenditure which makes sense, it seems unlikely to me that reusability alone would completely change the business model of TV broadcast companies that would lead them to launch much more ofter. If we assume 100 - 200M$ for the satellite itself, which was a number frown here, this also confirms that there is more to it than just the rockets that keep the number of launches low. But what about the prospect of reusability coupled with innovation in satellite technology leading to a launch once in every 5 years instead of once in every 20 years or so?
Someone with more knowledge on the commercial satellite market might be more equipped to answer that.

There is a limited number of orbital slots for GSO comsats.  Spacecraft on similar frequencies can only be placed so close.  Also, what innovation?

I was talking about commercial satellites more generally and not GSO specifically. But what about constellations in LEO?
Thinking in the direction of COMMStellation (http://en.wikipedia.org/wiki/COMMStellation), and what seems to be a general bloom in micro-satellites, what is the prospect of these taking replacing functionality on GSOs? I hope to not offend anyone with my ignorance on the subject, but - is there some overlap, at least theoretically, in what you can do with a large enough constellation and what you can do with a GSO satellite?

[sghill]

Thinking in the direction of COMMStellation (http://en.wikipedia.org/wiki/COMMStellation), and what seems to be a general bloom in micro-satellites, what is the prospect of these taking replacing functionality on GSOs? I hope to not offend anyone with my ignorance on the subject, but - is there some overlap, at least theoretically, in what you can do with a large enough constellation and what you can do with a GSO satellite?

There are two major differences between the two types that can't be engineered around through frequency hopping, timing windows within each band, hand-offs, signal combining, and other trickery because they involve physical limitations of the earth and where the satellite is located. 

The first is coverage and power needs to assure coverage.  An GSO sat can "see" more of the globe from its vantage point, but it's further out, so it needs more powerful receivers and transmitters- hence their large size and expense.  Lower orbit sats use less power, and are less complicated, but they cover a smaller portion of the globe, plus they move in relation to the globe, so you need several to equal the same coverage.

The second is distance, a lower satellite has a faster response time because the speed of light from the orbit to the ground isn't consequential.  This second limitation has largely gone away for two-way communications with the global network of fiber optics, but it still plays a role with satellite phones.  For one-way communications GSO is king.

I think your "hybrid" idea is workable with medium sized satellites in medium sized orbits, and a reusable booster may be perfect for getting them there.  Just thinking about back of the napkin constellation size, I think you'd need a constellation about the size of the 32 satellite GPS constellation, and not the 66 satellite LEO Iridium constellation to cover the earth, versus 3 or 4 GSO birds.

That's still only around a 30 satellite difference however, so not a lot of launches- especially if you send up more than one bird per launch- but nevertheless, several dozen launches is several dozen launches!

At any rate, it's fundamentally an accounting game, and not an engineering game.

[TrevorMonty]

There was talk of large constellation of 1600 small LEO satellites by Google to give global internet coverage. They definitely have money to make this happen.

[Llian Rhydderch]

SpaceX (and perhaps others) is going to have a reusable 1st stage booster (versus returnable) in the near future unless some technical difficulty proves that it's unworkable as a business model. But keep in mind that the development cost is going to be a sunk cost at that point. 

OK, so what do the economics of that reusable booster look like?  The US military isn't going to care much at first about reusability for its payloads because mission assurance plays an out-sized role in their launch cost calculations.  Non-compete launches won't be affected at all.  Civilian launches will care a great deal.  A million $$ is a million $$ to an investor, so even small improvements over launch costs by implementing reusability will wildly drive existing businesses to a reusable booster operator.  This assumes the MAJOR point that the benefits of reusability are ultimately passed along from the operator in the form of lower launch pricing to customers. They may not be.

Because existing business is very nearly a zero-sum game, commercial Soyuz, Arianespace, Orbital, and other commercial launch operators are going to take the hit first in the short term until they can respond with lower offered price points of their own through whatever means they have at their disposal.  A greater share of the existing market may be just fine for justifying the expense of maintaining a few reusable boosters (remember always that by this point they've already spent the money to develop it, so it's no longer counted) versus more cheaply building expendables.  And taking the thought to it's logical conclusion, reusability may ultimately eliminate any justification for expendables in a given booster class.  If reusability drives down launch costs to the operator or the customer (or both), expendability will go away for missions that use that sized booster.  There is no economic model where a customer buys a cargo ship to use it once- even if the value of the cargo is greater than that of the ship- when a reusable ship is available at a lower cost. 

Long-term this pressure will continue to trickle up into launches where competition exists, but where cost is secondary to mission assurance (such as U.S. military launches or NASA science launches).  That second phase may take years, allowing competitors time to respond, perhaps with reusability of their own, or perhaps with other pricing reduction techniques. 

Along with the zero-sum game of existing business however, is the positive-sum game of creating new markets with disruptive technology and techniques. 

If a reusable rocket (and lower launch pricing) can boost "dumb and dumber" items into space- such as construction materials instead of complex communications satellites- then a new market for frequent launches may develop as some entity seeks to make something up there or do anything other than the three primary space activities of launching self-contained telecommunications, science, and reconnaissance missions.  The list beyond these three things is endless if launch costs go down. If the dynamics of launch pricing change, then new customer entrants may need frequent, cheap, launch services for some different need, and that's where reusability could have its greatest impact.

To recap, here are the benefits of an operational reusable booster with (assumed) lower operational costs than CAPEX costs compared with an expendable booster:
1) internally for the operator- CAPEX per launch may be lowered through reusability to increase profits without changing market share (e.g. pricing doesn't change, but internal costs are lower).
2) existing market- reusability lowers launch costs and takes market share from other operators to make its business case.
3) new market- reusability lowers launch costs and creates new markets to make its business case.
Any combination or mash-up of the above works as well.

Recap of my recap:  If reusability drives down launch pricing, new launch purchasing opportunities will materialize along the demand curve- as would be expected with the pricing of any sort of widget.   If reusability drives down launch pricing and/or costs, expendability will go away for price-competition missions that use that sized booster.

This was a really good post, sghill.  Thanks for taking the time to set forth your argument, and your evidence for it, in such a comprehensive fashion.

[KelvinZero]

If NASA decided to pursue propellant depots for HSF I guess that would create a market a few times bigger than the current ISS cargo and crew, at least in terms of tonnage. Its an ideal application for a cheap reusable rocket needing repetitive missions.

[Llian Rhydderch]

To expand on a thought regarding expansion of the number of launches for the commercial satellite market:
 from the 3% number Antonio gave, assuming this meant out of total expenditure which makes sense, it seems unlikely to me that reusability alone would completely change the business model of TV broadcast companies that would lead them to launch much more ofter. If we assume 100 - 200M$ for the satellite itself, which was a number frown here, this also confirms that there is more to it than just the rockets that keep the number of launches low. But what about the prospect of reusability coupled with innovation in satellite technology leading to a launch once in every 5 years instead of once in every 20 years or so?
Someone with more knowledge on the commercial satellite market might be more equipped to answer that.

There is a limited number of orbital slots for GSO comsats.  Spacecraft on similar frequencies can only be placed so close.  Also, what innovation?

One example of potential innovation is the dramatic shrinkage and mass reduction of electronics, with knock-on effects in reduced mass for the power supply (solar) and the propellant mass and engine mass needed to keep the satellite in Geosynchronous orbit, and move it to a graveyard orbit at end-0f-life.  (Or, why not, maybe even future deorbit of the sat when the current unpriced externality regime of leaving derelict satellites in geocentric orbits eventually becomes a priced internal cost to the mission.  Reduced mass will be very important if this eventuality occurs).

The shrinkage in electronics and the entirely new server architectures made possible by CMOS semiconductor technology ate the lunch of the big mainframe and mini/microcomputer vendors like IBM, Sun Microsystems, et al.  It will happen in satellites too.

The availability of cheaper/faster/less massive technologies will allow substantial technology upgrades from the old, out-of-date, Rad-hardened silicon architectures used in previous generations of satellites and off-Earth probes.  While we don't know the lifetimes of these cheaper/better/faster-innovation technologies as applied to satellites, it is quite likely that a trade space is created to determine the economics of staying with 15-year nominal commsat life, or whether 7 or 5, or even 3, year turns might later on be the more economic option since the faster turns also allows quicker upgrades in available technologies. 

So, yes, not only is there substantial innovation on the horizon, there is a plausible argument that it could affect the Geosynch commsat market.

There are other examples as well.

[pippin]

If you look at the very long term perspective, GEO comsats will go away anyway. Communication in general is going towards IP/bidirectional communication and that's something not compatible with the link times of GEO sats. It's also not spectrally efficient enough due to the huge cell size.

So either we are going to see LEO constellations or most of the communication will become terrestrial again with cables as backbones. Probably the latter since LEO cells are still quite big.

In that kind of scenario GEO sats will only serve as cheap backbones for non time-critical data (batch link) and to cover broadcast comm to remote areas. The latter, too, might go away if LEO constellations would evolve.

So I doubt that in the very long term and assuming the kind of technical evolution you are describing the GEO Comsat market will see such a development towards cheaper, shorter, more.

[Jim]

One example of potential innovation is the dramatic shrinkage and mass reduction of electronics, with knock-on effects in reduced mass for the power supply (solar) and the propellant mass and engine mass needed to keep the satellite in Geosynchronous orbit, and move it to a graveyard orbit at end-0f-life.  (Or, why not, maybe even future deorbit of the sat when the current unpriced externality regime of leaving derelict satellites in geocentric orbits eventually becomes a priced internal cost to the mission.  Reduced mass will be very important if this eventuality occurs).

The shrinkage in electronics and the entirely new server architectures made possible by CMOS semiconductor technology ate the lunch of the big mainframe and mini/microcomputer vendors like IBM, Sun Microsystems, et al.  It will happen in satellites too.

The availability of cheaper/faster/less massive technologies will allow substantial technology upgrades from the old, out-of-date, Rad-hardened silicon architectures used in previous generations of satellites and off-Earth probes.  While we don't know the lifetimes of these cheaper/better/faster-innovation technologies as applied to satellites, it is quite likely that a trade space is created to determine the economics of staying with 15-year nominal commsat life, or whether 7 or 5, or even 3, year turns might later on be the more economic option since the faster turns also allows quicker upgrades in available technologies. 

  The electronics are a small part of the mass of a spacecraft, so your premise is wrong

[mlindner]

One example of potential innovation is the dramatic shrinkage and mass reduction of electronics, with knock-on effects in reduced mass for the power supply (solar) and the propellant mass and engine mass needed to keep the satellite in Geosynchronous orbit, and move it to a graveyard orbit at end-0f-life.  (Or, why not, maybe even future deorbit of the sat when the current unpriced externality regime of leaving derelict satellites in geocentric orbits eventually becomes a priced internal cost to the mission.  Reduced mass will be very important if this eventuality occurs).

The shrinkage in electronics and the entirely new server architectures made possible by CMOS semiconductor technology ate the lunch of the big mainframe and mini/microcomputer vendors like IBM, Sun Microsystems, et al.  It will happen in satellites too.

The availability of cheaper/faster/less massive technologies will allow substantial technology upgrades from the old, out-of-date, Rad-hardened silicon architectures used in previous generations of satellites and off-Earth probes.  While we don't know the lifetimes of these cheaper/better/faster-innovation technologies as applied to satellites, it is quite likely that a trade space is created to determine the economics of staying with 15-year nominal commsat life, or whether 7 or 5, or even 3, year turns might later on be the more economic option since the faster turns also allows quicker upgrades in available technologies. 

  The electronics are a small part of the mass of a spacecraft, so your premise is wrong

But most of the volume. Fiberglass has very low density. That makes the requirement for the structure which is most of the mass. Electronics get smaller and System on a Chip (SoC) designs start reducing the volume.

Edit: Or actually, more likely is that satellites stay fixed size and get more capable because the marginal cost of X more fuel isn't much once you have the launch of an ELV. We need some cheap microsat/nanosat launchers.

[Jim]

But most of the volume. Fiberglass has very low density. That makes the requirement for the structure which is most of the mass. Electronics get smaller and System on a Chip (SoC) designs start reducing the volume.

Edit: Or actually, more likely is that satellites stay fixed size and get more capable because the marginal cost of X more fuel isn't much once you have the launch of an ELV. We need some cheap microsat/nanosat launchers.

again, it isn't the electronics.  Microsats and nanosats can't be comsats.  The comm package where the mass is.   The difference between a laptop and smartphone in terms of electronics would have little effect on the mass or size of a comsat.

[Llian Rhydderch]

But most of the volume. Fiberglass has very low density. That makes the requirement for the structure which is most of the mass. Electronics get smaller and System on a Chip (SoC) designs start reducing the volume.

Edit: Or actually, more likely is that satellites stay fixed size and get more capable because the marginal cost of X more fuel isn't much once you have the launch of an ELV. We need some cheap microsat/nanosat launchers.

again, it isn't the electronics.  Microsats and nanosats can't be comsats.  The comm package where the mass is.   The difference between a laptop and smartphone in terms of electronics would have little effect on the mass or size of a comsat.

Well then Jim, looks like we should all just agree to disagree on this point.  We'll come back in ten years and see who's argument was closer to the reality we see then.   

[meekGee]

The resurgence of LEO constellation will be driven by the demand for high bandwidth, low latency, bi-directional traffic.  Kids don't want to watch TV, they want to watch youTube.

Required mass won't drop by much.  First, the reduction in mass-per-bandwidth is offset by the increase in demand for bandwidth.  Second, LEO comsats don't require less power because they are closer in.  However, they do get only 50% sun, so need twice as large panels + 45 minutes high-cycle count power storage.  They also need to worry more about thermal control, since they go in and out of sunlight.  On the upside, they don't need large fancy antennas since they footprints are naturally smaller, and don't have to be shaped funny.  (unless you consider "circular" to be funny)

So what I see is an actual increase in total required mass, but used by very large numbers of small sats instead of a few large sats.  I don't think cube-sats are the right size (even if the first constellation will use them), but maybe 100-500 kg / sat or so.  It is still after all managing a rather large cell.

At a cost level of $5M, a system that requires 1 launch/day, or $2B/yr, is pretty reasonable.  How much does Verizon spend on cell towers?

[Roga]

I did a fair amount of research on this in grad school 5 years ago, it's still relevant I think. This is known as the elasticity problem, or the valley of death. It is related to but not the same as the "chicken or egg" problem, in that it increases risk to return on investment for large capital outlays that are generally needed to develop reusable launchers.

Several people above said it was better for the reusable operator regardless because they could undercut the market and gain market share. This is not strictly true - in practice the space launch business appears to have negative demand elasticity. Demand elasticity (E_d) means, when I drop the price of a product, how much more revenue do I take in? I hope I get this right, but it goes something like this:
E_d > 1 means as I drop prices the total available revenue rises at a a higher rate than prices drop. It's difficult to keep an industry down when it has E_d>1, investment will rush to it because every incremental cost cut on the production side means windfall profits from not only existing customers migrating, but also new customers.
0>E_d>1 means that as prices drop, revenue increases but more slowly than the drop in prices. This is the normal place that most industries operate most of the time.
E_d<0 means that as prices drop, revenues also drop. Space launch E_d historically is near or slightly below 0. What this means is that if a company corners the market, it will actually make less money (revenue, not profit) by reducing costs. This is a market failure. Thanks mostly to government priorities that are even less elastic, several nations have maintained viable launch industries, but the market solves for high price, low volume, for customers who are insensitive to large price changes. Hence 3% of the total system cost.

Futron did a great survey last decade about potential emerging markets, and found very little change in this bleak picture down to something like $1000/kg. Other studies have found similar stories. Studies that focus on mass-markets tend to have much larger error bars but they seem to suggest that things like satellite servicing, personal spaceflight, space industry & R&D, and space solar power would bend the elasticity curve well above E_d = 1, but only at launch costs in the $10s or $100s/kg. Hence, "valley of death" between current $5-20k/kg and this somewhat magical point.

Additionally, there is a phase lag of 5-10 years between a capability appearing and payloads appearing. This is effectively forever at the costs of capital we see in the launch industry. At 15% discount per year, your return is worth 44 cents on the dollar in 5 years and 20 cents in 10. The current approach by SpaceX is interesting because it leverages a revenue product, so it erases most of the discount hit; but it's still money that could be spent on e.g. launching sooner. At 15% per year and 3% of total cost, slipping a launch by 3 months means you might as well give it away for free. Or more reliably.

So which way out? There seem to be a couple possibilities. First one is to make your customer more price-sensitive. Orbital and SpaceX are focusing on these customers, Orbital as a revenue generator and SpaceX as essentially an R&D investment source. Other ways might be to fly more price-sensitive payloads - humans, preferable spending their own money, come to mind. But also encouraging more standardized satellite busses where subsequent serial numbers are more and more sensitive to launch price. This is ie. Orbcomm and GPS III.

The second one is essentially self-sacrificial. While E_d is low, it's counterpart E_s is quite favorable. Which means, if you glut the market with capacity price pressure is very high. Generally that kind of thing is used to monopolize market share and raise barriers to entry. It could conceivably be used by a government or also a private player to incentivize cheap payloads. If your cost to launch is $500/kg, and your competitor is $2000, you could price at $1999 and pocket the difference. Or, you could "spend" the margin on incentives - for example, make very low base launch rates and charge through the nose for custom interfaces. Or offer significant price savings for risky R&D flights, or on reused vehicles. Or charge less for payloads that favor long-term market expansion, like on-orbit infrastructure and university or startup microsats. Or launch every 3rd day at noon with or without a payload to establish a more commoditized business model for clients and build up reliability in your vehicle.

It's a tough problem but not unsolvable.

[Jim]

  So what I see is an actual increase in total required mass, but used by very large numbers of small sats instead of a few large sats.  I don't think cube-sats are the right size (even if the first constellation will use them), but maybe 100-500 kg / sat or so.  It is still after all managing a rather large cell.

Much bigger, and fewer spacecraft, less than 100 of them

[Jim]

Well then Jim, looks like we should all just agree to disagree on this point.  We'll come back in ten years and see who's argument was closer to the reality we see then.   

All of Juno's spacecraft avionics are in this vault. A reduction in the size on the cards inside it would not have an appreciable affect on the spacecraft size.   The mass of a GSO comsat is the payload package (TWTA, receivers, solar arrays and antennas) and the rest of the spacecraft is size to this and not the avionics.

The effect (if any) is that is cheaper to launch more and not smaller. 

[watermod]

One of the great mistakes in Iridium was to use movable antennas to talk to the neighboring Iridium sats.   The movements changed balance and orbits of the satellites which caused the use of lots of extra fuel to maintain the proper orbit.  If they had used phased array antennas to do electronic beam forming instead of moving a physical antenna they would not have used as much fuel to keep their orbit.  Over the life of an LEO Iridium sat it could have been a big deal on the mass end of things.   So, yeah, modern electronics can make a big difference in the required size.

[Jim]

One of the great mistakes in Iridium was to use movable antennas to talk to the neighboring Iridium sats.   The movements changed balance and orbits of the satellites which caused the use of lots of extra fuel to maintain the proper orbit.  If they had used phased array antennas to do electronic beam forming instead of moving a physical antenna they would not have used as much fuel to keep their orbit.  Over the life of an LEO Iridium sat it could have been a big deal on the mass end of things.   So, yeah, modern electronics can make a big difference in the required size.

1.  How does spacecraft mass properties affect the orbit?
2.  Phased array antennas would require more power and hence larger solar arrays

[meekGee]

  So what I see is an actual increase in total required mass, but used by very large numbers of small sats instead of a few large sats.  I don't think cube-sats are the right size (even if the first constellation will use them), but maybe 100-500 kg / sat or so.  It is still after all managing a rather large cell.

Much bigger, and fewer spacecraft, less than 100 of them

You won't get enough coverage with <100.

[sghill]

But most of the volume. Fiberglass has very low density. That makes the requirement for the structure which is most of the mass. Electronics get smaller and System on a Chip (SoC) designs start reducing the volume.

Edit: Or actually, more likely is that satellites stay fixed size and get more capable because the marginal cost of X more fuel isn't much once you have the launch of an ELV. We need some cheap microsat/nanosat launchers.

again, it isn't the electronics.  Microsats and nanosats can't be comsats.  The comm package where the mass is.   The difference between a laptop and smartphone in terms of electronics would have little effect on the mass or size of a comsat.

Well then Jim, looks like we should all just agree to disagree on this point.  We'll come back in ten years and see who's argument was closer to the reality we see then.   

Jim's right.  The signal processing electronics could fit on a dime, but the power handling and amps are where the weight is.  I've worked in radios since the 90's- including satellite TV ground stations and cellular communications- and I've seen very little change to the amps and transceiver equipment even as the equipment racks for handling the traffic have gone from room sized to a single rack.

[watermod]

One of the great mistakes in Iridium was to use movable antennas to talk to the neighboring Iridium sats.   The movements changed balance and orbits of the satellites which caused the use of lots of extra fuel to maintain the proper orbit.  If they had used phased array antennas to do electronic beam forming instead of moving a physical antenna they would not have used as much fuel to keep their orbit.  Over the life of an LEO Iridium sat it could have been a big deal on the mass end of things.   So, yeah, modern electronics can make a big difference in the required size.

1.  How does spacecraft mass properties affect the orbit?

2.  Phased array antennas would require more power and hence larger solar arrays

1.  How does spacecraft mass properties affect the orbit?
The constant movement of the antennas so they could talk to the neighboring sats in the constellation were causing orbit and stability changes.  To compensate, at one point, they had rooms full of engineers flying the sats.   All those adjustment used up fuel mass at a much higher than planned rate.

2.  Phased array antennas would require more power and hence larger solar arrays
Maybe and maybe not,  but definitely less fuel consumed to remain in orbit.  I'll send you a patent I got beat to the patent office on (slow lawyers) if you want detail.   We looked into phased arrays for cellphones - both towers and the phones to do a feedback of phase in buildings or city canyons in much the same way that power control does.  After some test by a group in Israel we gave up on it for city canyons.   These big moving reflectors called semi-trucks destroyed the outside feedback scheme.  It still worked fine in building where you had metal 2x4s etc.    As I was more concerned with the phase strength I didn't bother with the power control logs.

Oh, I and several others, discussed this in great detail (unofficially) with  the same designer/manager after he left Iridium development and  who was later named in the Iridium Supreme Court case.  (Supremes found him responsible so he  jumped ship to a defense contractor)

[ArbitraryConstant]

So either we are going to see LEO constellations or most of the communication will become terrestrial again with cables as backbones.

It's been overwhelmingly terrestrial all along. I think the overall impact of that is to add demand for satellite broadband, not reduce it, because densely populated areas support applications that everyone else then wants access to.

The question for me is how much of the demand is going to go to solar powered drones rather than LEO satellites, as that will suck a lot of value out terrestrial broadband applications that satellites might hope to take advantage of. Presumably a good deal of the amortization of a LEO satellite would come from, say, rural Arizona, rather than, say, the average patch of open ocean, even if the ocean revenue isn't strictly zero (which it wouldn't be).

So I doubt that in the very long term and assuming the kind of technical evolution you are describing the GEO Comsat market will see such a development towards cheaper, shorter, more.

The GEO evolution seems to be towards more sophisticated antennas that can support smaller and smaller cells, so to an extent you can trade mass in GEO for more aggregate bandwidth. Ultimately you're diffraction limited at wavelengths that reliably make it through the atmosphere, but I don't think we're there yet.

[pippin]

Well, the problem with GEO is not only cell size, it's also latency. It's too much for good IP based communication. It might be acceptable in those rare cases where you have no other means of access but for everything else it won't be competitive.

So what's the use case for GEO comsats in the long run? I just don't see it. Broadcast is going away and terrestrial backbone bandwidth is going to be so high that also the "let's move big chunks of data in batch mode" case is not there. Backbone broadcast for things like distributing live TV streams and things but that, too, will not be worthwhile distributing over sat if it's just a minor volume compared to what your terrestrial infrastructure transports anyway.

I agree that there will be fight between drones and LEO sats for the semi-remote areas, I'd counted drones under "terrestrial".

So what does this leave GEO? I really don't see that as a growth market in 10 or 15 years, it's a segment you want to cash in on today or never.

[ArbitraryConstant]

Well, the problem with GEO is not only cell size, it's also latency. It's too much for good IP based communication. It might be acceptable in those rare cases where you have no other means of access but for everything else it won't be competitive.

You're overstating this. It competes with dialup and the lower tiers of DSL in the real world. The latency is excessive for, say, gaming, but that is demonstrably not prohibitive (demonstrably since it's commercially viable in the real world right now).

So what does this leave GEO? I really don't see that as a growth market in 10 or 15 years, it's a segment you want to cash in on today or never.

You could ask where GEO was left over the last 20 years, but the reality is that improved terrestrial broadband just made it that much more valuable at every step; there's more to connect to.

Terrestrial coverage has improved, but the value to remote areas increased faster.

[RocketGoBoom]

Lag Sucks !!!
http://wiki.answers.com/Q/What_is_the_Round_Trip_time_of_a_RF_signal_for_GEO_satellites

the speed of light = 299792458 m / s

GEO (Geostationary Earth Orbit) = 35863000 m above the Earth's surface

round trip time = 2*(35863000)/299792458 =0.239 s

the time needed for an RF signal to reach a GEO satellite and gets retransmitted back to a ground station on earth is approximately 240 milliseconds

[Elmar Moelzer]

Lag Sucks !!!
http://wiki.answers.com/Q/What_is_the_Round_Trip_time_of_a_RF_signal_for_GEO_satellites

the speed of light = 299792458 m / s

GEO (Geostationary Earth Orbit) = 35863000 m above the Earth's surface

round trip time = 2*(35863000)/299792458 =0.239 s

the time needed for an RF signal to reach a GEO satellite and gets retransmitted back to a ground station on earth is approximately 240 milliseconds

Which is quite a lag for games. It is OK for other uses, though. I agree and think that LEO constellations might be better in the future.

[dlapine]

Lag Sucks !!!
http://wiki.answers.com/Q/What_is_the_Round_Trip_time_of_a_RF_signal_for_GEO_satellites

the speed of light = 299792458 m / s

GEO (Geostationary Earth Orbit) = 35863000 m above the Earth's surface

round trip time = 2*(35863000)/299792458 =0.239 s

the time needed for an RF signal to reach a GEO satellite and gets retransmitted back to a ground station on earth is approximately 240 milliseconds

Which is quite a lag for games. It is OK for other uses, though. I agree and think that LEO constellations might be better in the future.

So a better phrasing would be that a GEO satellite constellation would not be useful for most gaming, phone service or video conferencing, but great for everything else depending on price.

Even video streaming is fine with that lag, if the signal can be kept constant.

The bigger question is whether you can build a constellation cheaply enough to provide competitive internet data service for the areas where the local coverage is poor.

[ArbitraryConstant]

No he is not overstating this.  Satellite lag from GEO precludes most two-way communications except where terrestrial alternatives are not available (or preferable).  This is basically all modern telecommunications except for broadcast and military needs.

Shrug. It's alive and well competing against rural DSL. There's no point arguing about it when we can just look and see people using it, including in the US.

No one is going to invest and build a two-way platform to use in GEO when they can do so at lower orbits or using terrestrial alternatives.

Doing so at lower orbits requires orders of magnitude more satellites, so it doesn't automatically win the trades even at lower launch prices. Depends on overall demand and alternatives. Alternatives even if they aren't full replacements will nevertheless eat up much of the revenue that could be anticipated, and make it harder to justify a big new satellite network.

[AncientU]

Google is experimenting with dirigibles for world-wide data coverage.  Affordable launch costs plus mass-produced satellites seems vastly better than airships.
http://www.telegraph.co.uk/technology/google/10084512/Google-blimps-will-bring-the-web-to-Africa.html

Edit: Added reference and changed question to statement.

[Elmar Moelzer]

Isn't Google experimenting with dirigibles for world-wide data coverage?  Affordable launch costs plus mass-produced satellites seems vastly better than airships.

I agree. If SpaceX can lower launch costs as anticipated, this should make more sense than dirigibles.

[pippin]

It's not just games. Most internet applications are heavily interactive these days and communicate a lot back and forth. Application providers go to great length to have local infrastructure to keep latency around 100ms.
I have used GEO Internet services, even using something like GMail through that will drive you crazy and it had a terrestrial uplink.
You also have to see that these 240ms or so are overly optimistic. That's not taking into account all the latencies in your terrestrial infrastructure (your service is not where the uplink is, all the switching and stuff and so on). Plus you are rarely right at the equator so your average trip times are easily twice as high.
Realistically we talk about half a second and a lot of internet services are not really usable with that. And all of this assumes a terrestrial back channel or the real round trip, going over the sat again gets even longer.

And then if you need a terrestrial network for most applications anyway there is little reason for a secondary channel.

Comsats have been successful in the recent years because satellite TV was but all usage statistics you can see show you that broadcast TV use is already in heavy decline with people under 30 and with on-demand channels becoming more and more available this will increase a lot. I know about Big TV networks already seriously considering to back out of some of their distribution channels.

A big factor is that people don't necessarily stop to watch the TV programs (like series, sports and so on) but they are not watching them through TV broadcast but on-demand or internet channels instead. Once the content providers realize that they'd better not fight his but change their monetization schemes the change will be all the more dramatic.

[Elmar Moelzer]

Agreed, cloud based applications are becoming more common. They need fast internet connections with low lag.
I think that LEO based constellations would be good enough. GEO, I cant see working.

[llanitedave]

No he is not overstating this.  Satellite lag from GEO precludes most two-way communications except where terrestrial alternatives are not available (or preferable).  This is basically all modern telecommunications except for broadcast and military needs.

Shrug. It's alive and well competing against rural DSL. There's no point arguing about it when we can just look and see people using it, including in the US.


The only thing it can really compete against is dialup.  We were using it at home in our very rural area until last year, but we jumped ship as fast as we could when 4G service became available.  It's alive, but I wouldn't call it well.  It's a desperate measure.

[Ludus]

http://www.parabolicarc.com/2014/02/16/google-planning-son-teledesic/

A Teledesic 2.0 sort of project is an example of ambitious new demand that might emerge if spacex is making deals for buys that soak up lots of launches. If launches can be bulk purchased for say $6 million rather than $60 million for falcon 9 performance to LEO, a company with lots of cash and internet ambition might consider a constellation of big powerful satellites for global broadband (that could incidentally also have hi-res cameras and provide total real time photo coverage). Big satellites with lots of PV arrays, lots of power, big antennas, redundant electronics, robust construction, which are produced by the hundreds can be orders of magnitude cheaper per unit. A large high performance satellite with a launch cost of a few million can also be made for a few million. Sort of the Planet labs approach scaled up.

While continuing to sell regular launch services at much higher market prices, projects that buy hundreds of launches could get appropriate pricing. Rapid reusability has the potential to lower marginal costs to make this sort of pricing deal possible, even in a period where ordinary one-off launch prices have not fallen much from current levels. That implies that profit percentages on regular launches could be much higher.

[simonbp]

All of Juno's spacecraft avionics are in this vault. A reduction in the size on the cards inside it would not have an appreciable affect on the spacecraft size.   The mass of a GSO comsat is the payload package (TWTA, receivers, solar arrays and antennas) and the rest of the spacecraft is size to this and not the avionics.

Juno is maybe not the best example, because it has really heavy vault for surviving Jovian radiation. The vault holds both the control system and scientific electronics (i.e. the payload). Smaller cards would have reduced the size and mass of the vault, and therefore the size and mass of the bus. And being an escape mission, there is a much greater benefit to minimizing mass. The overall size of spacecraft was dictated by the very large solar arrays, which again are not typical for GEO sat.

Really though, I could believe that the trends to progressively larger GEO sats and fewer open slots will reach its logical conclusion and commercial satellite operator will move to using large monolithic platforms that could be serviced and refueled robotically.

[Jim]

Juno is maybe not the best example, because it has really heavy vault for surviving Jovian radiation. The vault holds both the control system and scientific electronics (i.e. the payload). Smaller cards would have reduced the size and mass of the vault,

Not by enough to really matter.  A vault half the size wouldn't have changed the spacecraft.  The point was that changes to  the avionics are over shadowed by other systems, propulsion, power production and storage, and communication package of a comsat.

[ArbitraryConstant]

The only thing it can really compete against is dialup.  We were using it at home in our very rural area until last year, but we jumped ship as fast as we could when 4G service became available.

Good call; but it's hard to see a LEO constellation being competitive with an area that can support 4G service.

Cell towers can pick their location. GEO birds can pick their location (somewhat) and choose where they point their antennas. So-called atmospheric satellites will be able to choose where they loiter. But a LEO satellite won't be able to control its ground track. The main issue I'm trying to surface here is that much of the revenue potential for a LEO satellite's ground track will be in areas that are sufficiently densely populated to support a denser communications medium. There are certainly cases that LEO can handle better but it isn't automatically the case that the gap between terrestrial means and GEO will support a huge new satellite constellation.

[Elmar Moelzer]

The only thing it can really compete against is dialup.  We were using it at home in our very rural area until last year, but we jumped ship as fast as we could when 4G service became available.

Good call; but it's hard to see a LEO constellation being competitive with an area that can support 4G service.

Cell towers can pick their location. GEO birds can pick their location (somewhat) and choose where they point their antennas. So-called atmospheric satellites will be able to choose where they loiter. But a LEO satellite won't be able to control its ground track. The main issue I'm trying to surface here is that much of the revenue potential for a LEO satellite's ground track will be in areas that are sufficiently densely populated to support a denser communications medium. There are certainly cases that LEO can handle better but it isn't automatically the case that the gap between terrestrial means and GEO will support a huge new satellite constellation.

What speaks against this is that satellite phones have been picking up in business recently. If they have enough customers, so should internet. The military might also be interested in a high bandwidth communications from anywhere.

[AncientU]

Wouldn't a LEO constellation be able to provide continuous communication between any satellite and the ground and vise versa?  IP for ISS, Bigelow, Dragon?  Once you have full coverage of the planet and the complex control system to hand off traffic, all airliners, ships, trains, buses, cars, trekers, etc. will have wifi (won't that be fun). 

[ArbitraryConstant]

Wouldn't a LEO constellation be able to provide continuous communication between any satellite and the ground and vise versa?  IP for ISS, Bigelow, Dragon?  Once you have full coverage of the planet and the complex control system to hand off traffic, all airliners, ships, trains, buses, cars, trekers, etc. will have wifi (won't that be fun).

Yeah, it's not out of the question that good internet connectivity for trans-oceanic flights are a billion dollar business. This would have to be part of the evaluation.

My goal isn't to dismiss the idea, just express the trades.

[Avron]

if we are to track in realtime every aircraft re: MH 370 and maybe every means of transport we are going to need a few more sats , thinking realtime comms 

[sghill]

The big three launch types (telecommunications, science, and reconnaissance) are not the justification for large-scale reusability.  This talk about medium orbit telcom sats is a distraction.  Launch costs are a small portion of the overall costs of these types of payloads.

The payload has to be something much MUCH simpler.  Focus on that.

The payload has to be "dumber" to the point where the launch costs are a much higher percentage of the total than the value of the payload.  Whatever "it" is.  For example, it would have made no economic sense to launch payloads of water and food on the space shuttle if Orbital and SpaceX had been available while STS was still flying.  We'd have used STS for nodes and trusses, and not bulk materials (which we started to do towards the end).

For me, I'm thinking bulk materials or construction materials.  Something that is a simpler component of something far more complicated (like a space station). 

Even launches of repair equipment for older broken satellites to a hypothetical orbiting space tug will be more profitable if boosting hydrazine and new solar panels is an order of magnitude cheaper using a reusable booster.

[AncientU]

fuel

[sghill]

fuel

Bingo.


A different reusable "tanker" for each bulk type you need to send up there (one for fuel, one for O2, one for hydrogen, one for hydrazine, one for spam, one for lumber, etc.).

Come home, refill it, go up again. Repeat.

[AncientU]

fuel

Bingo.


A different reusable "tanker" for each bulk type you need to send up there (one for fuel, one for O2, one for hydrogen, one for hydrozine, one for foodstuffs, one for lumber, etc.).

Come home, refill it, go up again. Repeat.

If 70-80% of the mass we need on orbit is fuel alone, bulk needs (including people?) could possibly constitute 80-90%. At < $1M/mT, possibilities that have been suppressed by the current price of > $20M/mT may begin to emerge.

[oldAtlas_Eguy]

fuel

Bingo.


A different reusable "tanker" for each bulk type you need to send up there (one for fuel, one for O2, one for hydrogen, one for hydrozine, one for foodstuffs, one for lumber, etc.).

Come home, refill it, go up again. Repeat.

If 70-80% of the mass we need on orbit is fuel alone, bulk needs (including people?) could possibly constitute 80-90%. At < $1M/mT, possibilities that have been suppressed by the current price of > $20M/mT may begin to emerge.

Yes.

A reusable FH and a reusable tanker able to do ~ 25-30mt @ ~ $2M/mt per delivery of bulk liquids to LEO is a possibility in the near future (2018-2020).  But a depot by that time is questionable even though the hardware to deliver could be available by then.

[AncientU]

fuel

Bingo.


A different reusable "tanker" for each bulk type you need to send up there (one for fuel, one for O2, one for hydrogen, one for hydrozine, one for foodstuffs, one for lumber, etc.).

Come home, refill it, go up again. Repeat.

If 70-80% of the mass we need on orbit is fuel alone, bulk needs (including people?) could possibly constitute 80-90%. At < $1M/mT, possibilities that have been suppressed by the current price of > $20M/mT may begin to emerge.

Yes.

A reusable FH and a reusable tanker able to do ~ 25-30mt @ ~ $2M/mt per delivery of bulk liquids to LEO is a possibility in the near future (2018-2020).  But a depot by that time is questionable even though the hardware to deliver could be available by then.

Is a meth/LOX depot so difficult? ZBO Hydro/LOX is much tougher.

The missing/questionable 'component' in this bulk cargo hauling scenario is something needs to be going on in space to create the need for bulk anything.

[Oli]

The payload has to be something much MUCH simpler.  Focus on that.

Humans. The actual payload is only meat.

[groundbound]

Yes.

A reusable FH and a reusable tanker able to do ~ 25-30mt @ ~ $2M/mt per delivery of bulk liquids to LEO is a possibility in the near future (2018-2020).  But a depot by that time is questionable even though the hardware to deliver could be available by then.

What is the market for fuel in LEO in the next 5 years?

I get it that there is a market eventually, but right now there is a lack of market for paying end-use customers. If fuel is an intermediate product for currently undersupplied end use, shipping it to LEO is about as profitable as bulk shipping bagels because there will eventually be delicatessens in space.

(the context in which I ask this question is my perception that SpaceX can serve most of the current available market just by fully executing F9/FH plans for ramp-up and reuse.)

[zd4]

I just came across this talk by Elon at the AIAA, 2011:


Where he was asked exactly this question, how do the economics of re-usability pan out, where is the driver for more launches?
He said he didn't believe there is a need for too many satellites. He certainly doesn't believe mining anything in space would be economic.
He said the biggest drivers would be moving people and cargo to a base on the moon and Mars.

The issue I have with that answer is that it is too far out into the future. Lets say even that the first Mars landing is in the 2030's as NASA wants. It would still take a few more decades until Mars is a business case. Especially since there is a window for minimum energy orbit only once in two years.

If you rule out any significant increase in satellites, that only leaves you with new markets for space. I can think of two main drivers, in the "short" term (relatively speaking, compared to any Mars or even moon base) - tourism, and commercial R&D in space. Commercial space station maybe?

[RanulfC]

Where he was asked exactly this question, how do the economics of re-usability pan out, where is the driver for more launches?
He said he didn't believe there is a need for too many satellites. He certainly doesn't believe mining anything in space would be economic.
He said the biggest drivers would be moving people and cargo to a base on the moon and Mars.

The issue I have with that answer is that it is too far out into the future. Lets say even that the first Mars landing is in the 2030's as NASA wants. It would still take a few more decades until Mars is a business case. Especially since there is a window for minimum energy orbit only once in two years.

Well he did say the Moon as well which has "windows" every couple of weeks at the worst (Venus has "windows" every couple of months IIRC even though he didnt' mention it as a destination

If you rule out any significant increase in satellites, that only leaves you with new markets for space. I can think of two main drivers, in the "short" term (relatively speaking, compared to any Mars or even moon base) - tourism, and commercial R&D in space. Commercial space station maybe?

A Commercial Space Station (Orbital Tourism is often implied but not so much "in-the-open" as it was) has been the cornerstone "hope" behind commercial crew from the begining. Bigelow has stated that all he was ever waiting on was someone (who's NOT the "government") to have an available capability before he went ahead with his private space station plans. The general "feeling" if not the reality is that once there is a "commercial" space transportation option available there will be a small but growing market available to tap.
There are a lot of hopes planned on in-space industrial research as well, because there are a lot of "problems" with using the ISS.

Any of it "real," well that depends greatly on the amount of "proof" you need and your ability to "believe"

Guess we'll see

Randy

[bstrong]

round trip time = 2*(35863000)/299792458 =0.239 s

You can cut that number in half (and cut the total RTT, including ground-side latency, by much more than half) by putting servers in GEO, too.

I'm only half joking. It seems to me that the combination of tiny servers based on mobile processors, higher density solid-state storage and bigger satellites might actually make this possible soon. I would imagine that, for example, storing the entire iTunes content library on a large comsat is approaching being feasible today.

This would make the most sense with a hybrid architecture, with latency-sensitive traffic going over a lower-latency / lower-bandwidth (perhaps lower orbit?) channel and requests for big static files like videos and music going to GEO. Most internet services already offload serving of static files to CDNs, so they wouldn't need to be re-architected. You'd just be putting CDN edge locations in orbit.

So for me, the big question isn't whether the latency is too high, but whether the available downlink bandwidth is too low. I have no idea what the limits on bandwidth are (and how hard they are), but I would be very interested to know.

Edit: Sorry, bad math on my part. This strategy would give you the RTT suggested in the original post, which is half of the 478ms RTT that you'd would get to a terrestrial server using a GEO relay and is still low enough for purposes like streaming static content.

[RocketGoBoom]

This seems like a natural for Larry Page to hire his buddy Elon Musk to take care of this little delivery task for him...

Google plans to send 180 satellites into orbit to improve global Internet access
By Aaron Mamiit,    Tech Times | June 2, 10:56 PM

http://www.techtimes.com/articles/7873/20140602/google-plans-to-send-180-satellites-into-orbit-to-improve-global-internet-access.htm

Google is making plans to invest over $1 billion in a fleet of 180 satellites that the company will launch into space to provide Internet access to parts of the world that do not yet have connectivity.

The price of the fleet of small, high-capacity satellites will run between $1 billion to $3 billion. The satellites will be placed in orbit around the Earth at altitudes that are lower when compared with most satellites.