Dear readers,
Welcome to Quartz’s newsletter on the economic possibilities of the extra-terrestrial sphere. Please forward widely, and let me know what you think. This week: Survey says “satellites,” in-flight abort and space bibles.
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I was trying to convince a veteran journalist that space business is a big deal. She was skeptical. “Isn’t that just a big money suck?”
Maybe! Despite the headline success of SpaceX, many of the “new space” companies are still in the invest-and-grow stage—not in the having profits and rewarding investors phase—of their corporate lives. Most of the money being made in space is still being made by big aerospace contractors.
Still, we’re dreaming about the $1 trillion space economy, and there’s a lot driving it: Private investors are pouring billions into space-related firms, and market analysts are putting out ambitious forecasts in response. Euroconsult released a report this week, based on an industry-wide survey, that predicts a 28% increase in satellite revenue in the next decade, driven by four times as many spacecraft launched compared to the previous 10 years, and an expected average of 990 new spacecraft heading for orbit annually.
Telecommunications satellites are a big part of this, thanks to the enormous new constellations being developed by SpaceX, OneWeb, Amazon and others. Elon Musk’s company has already launched 60 new satellites this year and expects to launch another 60 next week. OneWeb says it can now build two satellites every day (slow in most manufacturing sectors, quite speedy for spacecraft). So far, the forecast seems to be on trend.
The chart I was most interested in was Euroconsult’s admirable effort at accountability, showing how its previous forecasts held up. It’s divided between “geostationary” satellites, which effectively hang over one region of the planet, and everything else.
During the tech boom of the 1990s, the forecasts were way over the top and expectations didn’t meet reality. This was a period when investors learned to hate space: Major satellite companies went bankrupt, and the rocket-makers who had bet on ferrying all those satellites into space had to be in effect bailed out when the Defense Department overruled the Federal Trade Commission and allowed Lockheed Martin and Boeing to form an effective monopoly, United Launch Alliance.
That’s why the idea of new satellite constellations attracted early skepticism from the folks who took the ride the first time, whether journalists or investors. Bill Gates is a great example of someone who has soured on the sector. In the 1990s, he invested in an ambitious satellite company called Teledesic that went belly-up. In 2013, he said he didn’t see the point of space investments, and in 2019, he said he had no interest in space. (Is this true? No, Gates has personally invested in several satellite companies in recent years.)
So it’s intriguing to see for the last several editions of the forecast, analysts consistently under-estimated the amount of geostationary satellites being deployed, and only modestly overestimated the amount of non-geostationary spacecraft. For all the hype around the space sector (and boy is there hype), it seems like expectations today are more reasonable and in line with both technology and markets. And, hmm, it probably is not a great idea to type that…this time is different, money-suck wise.
What could go wrong?
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IMAGERY INTERLUDE
Meet the latest class of US astronauts, who just graduated from their two-year training program, which included “spacewalking, robotics, International Space Station systems, T-38 jet proficiency, and Russian language” on Jan. 10.
As is tradition, the astronauts comprise some of the most accomplished people out there—you’ve heard about the Navy Seal-Harvard Med School astronaut, right? This class is special in that it might include the first Americans to return to the lunar surface—five years from now or so, assuming the space agency can get a feasible plan together to get them there.
🚨 Read this 🚨
If anything defines the US space program, it’s bitter fights over limited public resources. For example, are both a space station and a moon mission feasible? NASA’s annual budget has fallen from about 1% of federal spending in 1990, to .75% in 2000, to just .48% today.
Part of the challenge is plunging corporate tax revenue, as US multinationals find clever ways to squirrel their profits beyond the reach of the IRS. They are abetted in this effort by consultants hired from global accounting firms, who are also responsible for ensuring their books aren’t cooked.
The conflict between consulting and auditing now has the Big Four accounting firms “under more scrutiny than at any time since the Enron scandal,” writes Quartz contributor Michael Rapoport. This week’s state of play explains what’s wrong with how public companies are audited and how the industry is trying to course correct.
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SPACE DEBRIS
Let’s call the whole thing off. On Jan. 18, SpaceX is scheduled to perform its in-flight abort test, demonstrating that its Crew Dragon space capsule can separate from a Falcon 9 rocket and carry passengers to safety in the event of an emergency. It’s the final big test for SpaceX before it can win approval to begin flying US astronauts to the International Space Station on a regular basis, but it was held up following a ground-test anomaly that destroyed a previous test vehicle. Given Boeing’s failure to make it to the ISS during a December dry-run, the commercial crew program could use a smooth test this weekend.
Three’s not a crowd! A fascinating scoop from SpaceNews’ Sandra Erwin: The RAND Institute has delivered a report to the US Air Force arguing that funding three rocket-makers would be a smart choice to assure the US military’s capabilities in space. Right now, military officials are in the middle of selecting two firms to launch national security satellites for the next decade, from a group that includes SpaceX, United Launch Alliance, Blue Origin and Northrop Grumman. The decision will shape the industry for years to come and Blue Origin, the newest entrant, has made the case that tapping three providers instead of two would be a good idea. Fun to see that the RAND crowd agrees.
Pray for Space Force. Gen. John “Jay” Raymond has taken the reins as head of the US Space Force. He was sworn in on the official bible of Space Force, which was blessed over the weekend at the Washington National Cathedral. Are people who care about the separation of church and state mad about this? You bet. It also gives me an excuse to point you toward Marina Koren’s great 2018 story about the intersection between church and space.
Accept my space rose. Would you watch a dating reality show in space? How about a dating reality show on Earth that’s predicated on going to space at some indeterminate later date? The latter will soon be available, thanks to Yusaku Maezawa, the Japanese entrepreneur who paid SpaceX some amount of money in order to be the first passenger on its as-yet-unbuilt Starship spacecraft on a trip around the moon. Maezawa initially pitched the trip as a cultural mission to bring a dozen artists to space. Now, he is planning to also bring the woman of his dreams, who he will find on a streaming reality TV show, or um, documentary. Applicants must apply by Jan. 17 and the lucky lady will be chosen in March. No word on what will happen during the intervening multi-year period between the selection of Maezawa’s future partner and the hypothetical flight.
Your pal,
Tim
This was issue 30 of our newsletter. Hope your week is out of this world! Please send your forecasts for the future of space, your recommendations on the right space bible for a space bachelor, tips, and informed opinions to tim@qz.com. If you enjoy this newsletter, take 50% off becoming a Quartz member.