For-profit Earth-observing Firms Brace for Coming Flood of Free Data
PARIS — Operators of three small commercial Earth observation satellite systems on Sept. 14 said they expect a negative impact on their business from the coming flood of free data from U.S. Landsat and future European Sentinel satellites, but that they are confident they can adapt to preserve their businesses.
Owners of the five-satellite RapidEye AG system of Germany, the five- or six-satellite DMC International Imaging of Britain and Spain’s one-satellite Deimos all will feel the effects of U.S. and European government policies that provide Landsat and Sentinel low- and medium-resolution satellite imagery free of charge as a way to stimulate value-added markets.
All three companies are focusing on differentiating their products to provide customers with value beyond the raw imagery coming off the free-access systems.
“The Sentinel and Landsat data coming onto the market will affect our sales, no doubt about it,” said Ryan Johnson, chief executive of Brandenburg-based RapidEye.
Addressing the World Satellite Business Week conference here, organized by Euroconsult, Johnson said RapidEye is adapting its commercial offer to focus on the system’s strength, which is collecting wide-area imagery in short order using the constellation’s full capacity.
He said RapidEye recently decided to end its practice of providing land-use assessments for agricultural customers, concluding that this is a chore best left to customers. RapidEye will focus on providing the raw data.
Ryan arrived at RapidEye in 2011 as part of a group of new owners that purchased the company following its financial reorganization under German bankruptcy law. He said revenue has nearly tripled in the past two years, to around 35 million euros ($45 million) anticipated this year.
Ryan said the business has not yet generated the amount of predictable recurring revenue that would enable it to finance a second-generation constellation without outside backing. An annual revenue haul of around 50 million euros, he said, would be sufficient to fund the business including eventual replacement satellites.
“A second-generation constellation is a high-risk investment,” Ryan said, adding that the company does not have much in-house expertise in purchasing and launching satellites. As an alternative, he said, RapidEye might determine that it should forgo the idea of operating its own satellites in favor of making bulk purchases of data from other satellite constellations.
RapidEye’s current satellites are expected to operate until 2018, meaning that the investment in a second generation of satellites could wait until 2014.
Ryan said that in the near term RapidEye hopes to take advantage of the expected merger of the two principal satellite Earth observation companies,of Longmont, Colo., and Inc. of Herndon, Va., by hiring some of the employees likely to be dismissed when the merger occurs.
DMC Imaging International, a subsidiary of Guildford, England-based Surrey Satellite Technology Ltd., operates a five- or six-satellite constellation that distributes data free to governments and aid agencies in emergencies, and sells data on the commercial market otherwise.
DMC Imaging International’s core product is 20-meter-resolution wide-swath images for a market that overlaps RapidEye’s. The company’s managing director, David Hodgson, said 2011 revenue was about 35 million British pounds ($56 million.
Hodgson said that amount of revenue is sufficient to fund the business and to invest, when needed, in replacement capacity. He said he expected revenue for 2012 to increase by 20 percent over 2011.
A second-generation DMC constellation of three satellites providing 1-meter imagery in panchromatic mode is scheduled for launch in 2014 following the agreement of a Chinese company to guarantee the purchase of $170 million of imagery.
Spain’s Deimos Group, which operates a single satellite with a 20-meter resolution in color and a swath width of 620 kilometers, generated about 5 million euros in revenue in 2011, a figure that covers the company’s costs, said Deimos Group Managing Director Miguel Bello Mora.
Mora said Europe’s Sentinel 2 medium-resolution optical satellite, set for launch in 2014, “will take some of our business, that’s for sure,” and that the addition of the Deimos-2 high-resolution satellite in late 2013 should help diversify the company’s portfolio.
Deimos-2 will carry a 75-centimeter-resolution imager provided by Satrec Initiative of South Korea. Spain’s government-owned Inta will perform satellite integration of the 300-kilogram Deimos-2. Deimos has booked a launch aboard the Dnepr converted ballistic missile operated by Kosmotras of Moscow.
Deimos’ corporate parent, Elecnor of Madrid, has agreed to underwrite much of the 60 million euros in anticipated Deimos-2 costs, a figure that includes the satellite’s construction, launch and insurance. Spain’s Ministry of Industry, Tourism and Trade is picking up 20 percent of Deimos’ costs.
Deimos-2 will have a 12-kilometer-diameter swath and be able to swivel 30 degrees off nadir to each side, and 45 degrees in the event of a special order.