WASHINGTON — While some see a surge of launch vehicle development efforts as a sign of an “overheated” market, others see those efforts as a sign of shifting demand.
At a Feb. 4 webinar, Tory Bruno, chief executive of United Launch Alliance, said he was concerned that too much investment was going into launch companies, creating capabilities that were driving down prices but not stimulating demand.
“It’s down to a third or even a fourth of the cost of what access to space was just a handful of years ago,” Bruno said. “Yet we have seen no increase in the overall size of the launch market nor have we seen a corresponding tripling or quadrupling of space activity.”
At a panel during the 2021 SmallSat Symposium Feb. 8, industry observers offered mixed views of Bruno’s thoughts of the launch market. His assessment of market trends is right when it comes to large satellites, some said.
“Launch is not a barrier to big satellite enterprises,” said Carissa Christensen, chief executive of Bryce Space and Technology. For those ventures, launch is a small fraction of the overall cost of a satellite system, so lowering launch prices does little to change the business case for that system. “Launch prices have gone down over the last 20 years steadily. We have not seen a concomitant increase in the number of large satellite launches.”
The situation is different for small satellites, where launch is a bigger fraction of the overall cost. Lowering launch costs, and increasing the supply of launches, can play a bigger role at that end of the market.
“It depends on what market you’re looking at,” said Fred Kennedy, president of in-space transportation company Momentus. “If you’re looking at the low end, I think there are any number of folks who are looking for rides to get on orbit, and they’re looking every day.”
“Maybe it’s a bifurcated market,” he suggested, with little change in demand for launching large satellites even with dropping prices. “But the little guys? They’re coming in gangbusters.”
That demand, though, may not help some small launch vehicle companies. The large number of small launchers under development — more than 100 by some estimates — has created a conventional wisdom that there will be a shakeout in that sector at some point, although when that will take place, and how many companies will survive, remains uncertain.
“That’s astounding: billions of dollars going to fundamentally the exact same market segment,” said Steve Jurvetson, partner in Future Ventures, during a talk later the same day at the conference. “I’ve never seen anything like it,” he said, calling all of the investment going into those companies “venture fratricide.”
Jurvetson, who is on the board of SpaceX, was skeptical that small launch vehicles could compete effectively against SpaceX’s smallsat rideshare service on a price basis. “They’re basically listing prices that are between 2 and 10, sometimes 12x, worse than SpaceX’s listed prices today,” he said.
He was unconvinced by arguments that small launchers can provide “nimble” dedicated launch services for customers willing to pay that price premium because the vast majority of smallsat launch demand will come from constellations. “Why would you launch one at a time at a higher cost per kilogram when you can put everything up into a particular plane in a single go?”
In the earlier panel, Christensen noted the competition between “bus versus taxi” models, with SpaceX providing a smallsats a low-cost “bus” to space with rideshare missions, while small launch vehicles offering a “taxi” to space for individual smallsats at higher prices. “You’ve got to get your taxi price down, and the quality of the taxi service has to be high enough, that it’s worth that price premium,” she said.