Space: The Next Trillion Dollar Industry

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This video was made possible by Away. Get $20 off your Away suitcase by going to awaytravel.com/wendover and using the code “wendover” at checkout. And quickly, once you’ve finished this video there are two others to watch, both where I appear on camera for the first time—a behind the scenes video on my brand new personal channel and my appearance on StarTalk with Neil deGrasse Tyson. Both are linked in the description. “Suppose we’re in a cave right now. This is a cave, and there’s maybe 10 of us, we have a mini family tribe and I say “you know, I want to go out and see what on the other side of that mountain. We can see it from here,” and you say, “no, no we have cave problems we have to fix first. Fix all the cave problems first, then you can go out on the mountain.” And that’s what it sounds like to me when I hear people say, when we talk about exposing space, we have problems on earth, let’s fix those before we go into space, and here’s Earth, a speck of dirt orbiting an ordinary star and there’s this vastness of the Universe that is waiting for us. It beckons.” The commercial space industry is heating up. Fifty years ago outer space was reserved for the most powerful of nations, the most dominant governments, but today there’s a democratization of space. Commercial industry is inching us closer to the cosmos, and in the process, there’s a growing interdependence between what’s happening hundreds of miles up in space and down below on earth. The commercial space industry, using multi-million dollar satellites and rockets, is increasingly playing a part in our everyday lives. You may think of this industry as a new phenomenon, you may have only started hearing about profit-seeking space enterprise in the past few years, but in reality, this has been going on for decades. “Our founder, Walter Scott, founded the company in his garage in Palo Alto 25 years ago.” This is Dan Jablonsky. He’s President of one of the commercial space companies that you might not have heard of—DigitalGlobe. They might not be as flashy as SpaceX or as exciting as Virgin Galactic, but they’ve been flying satellites since before Elon Musk even graduated college. In fact, they were the very first American company to be granted a license to take high-resolution pictures from space and that is essentially what they do—they take pictures from space, but it’s a lot more complicated than it sounds. To take those images from space, you need satellites, and DigitalGlobe has five of them. “So the five satellites we have on orbit are GeoEye 1, WorldView 1, WorldView 2, WorldView 3, and you’re noticing a trend here, WorldView 4. The first of those was launched in 2007. The most recent was launched in 2016 and they have an expected life of over ten years each.” And these are really good satellites. WorldView 4, for example, DigitalGlobe’s newest satellite, has a pixel size of 12 inches. That means that this satellite, orbiting 383 miles above earth, can clearly see a single sheet of paper placed in a parking lot. Horizontally, that’s like if a camera in Toronto took a picture that could identify the individual eyes of Statue of Liberty in New York. It is insanely high resolution. “With a 30 cm pixel you can actually pick up road markings. You can see the lines on the roads, whether they’re straight or dashed lines, you can see whether there are turn arrows there, whether there’s a stop word on the road markings, you can even pick up some of the traffic signs and traffic light sizes.” The potential uses of such high quality imagery are endless, but how do the satellites even work? “Well first off its good to know that our satellites are in a low earth orbit which means that they actually, they’re not like a geo satellite which sits up in a fixed orbit and sits over one place in the planet.” Some satellites are designed to stay directly over one position for their whole service lives. Their orbits are significantly higher above earth so the time it takes them to complete an orbit is exactly the same as the time it takes the earth to make a full rotation so, relative to earth, the satellite doesn’t move at all. This is incredibly useful for certain uses like communications. When a communications company launches a satellite to broadcast TV or radio or internet, they want that satellite to stay over their particular service area. DirecTV, for example, the American satellite TV company, want their satellites to stay over the US because that’s their service area. If they weren’t able to put their satellites into geosynchronous orbit, they would have to launch enough satellites to cover the entire world even if they were only broadcasting to the US. So, DirecTV want their satellites to stay over one area because they’re broadcasting to one area, but DigitalGlobe, on the other hand, want their satellites to move because they’re imaging the entire world. “Each of our satellites right now are in sun synchronous orbits. So what that means is that the orbital plane that the satellite is flying around in stays in the same orientation relative to the sun all the time.” Simplified, that means that any given satellite passes over any given location on earth at the exact same time every day. WorldView 3, for example, always orbits above the points on earth where it’s 10:30 am. When it passes over Denver, it’s 10:30 in Denver, when it passes over Paris, it’s 10:30 in Paris, and when it passes over Tokyo, it’s 10:30 in Tokyo. How this works is that essentially, with each pass over the light side of earth, the orbit advances relative to the earth at the same rate as the sunlight advances. This orbit type is crucial because a lot of what satellite imaging is about is detecting change from day to day, month to month, or year to year and an image taken at 10:30 am is going to look very different than one taken at 6:00 pm. This orbit type allows the satellite to pass over the entirety of earth, once per day at the same time so the light conditions look the same. The satellites do, of course, need to be told what to do and that all comes down to four people in one room. “So this is our mission operations control center. This is where we fly the five satellites on orbit and really inside this room is what we consider our time-dominant, real-time activities from choosing, making the final choices of what images we’re going to collect in the next several minutes to the next several hours.” These four individuals are controlling billions of dollars worth of satellites. This whole company, the thousands of employees and hundreds of millions of dollars in revenue all exists to organize and fund what these four individuals are doing—sitting and piloting the satellites above in space. The mission operations center is, of course, staffed 24/7 since, while it’s nighttime in the US, it’s daytime in Asia and Australia. The satellite vehicle operators’ main task is to load plans onto the satellites of which images to take when, to monitor that the satellites are operating correctly, and and to assure that the satellites won’t collide with other satellites or space junk. These central screens at the front show the current location of each of the five satellites, while the one to the left displays other information such as the total number of times each satellite has orbited around the earth and how much time they have until the satellite loses signal. You see, in order for satellites to function they need to be able to communicate with the ground and that’s done with ground stations. These antennae communicate to satellites using what are essentially super-high powered wifi signals. The ground stations DigitalGlobe use are able to receive about a gigabyte of information every second from the satellites. “Each of those antennas around the world see each satellite several times a day so as we go through the day we accumulate about seven terabytes of raw imagery through that gigabit connection.” Satellites can only communicate with ground stations while they have a line-of-sight with the antenna so, due to the curvature of the earth, in the view of any given ground station the satellite will eventually dip below the horizon. Therefore, each ground station only has a limited operating range. The exact locations of ground stations are, understandably, kept secret but if there was one in Germany, for example, it would communicate with the DigitalGlobe satellites exclusively while they passed over Europe. The fact that these satellites have to, by nature, pass over the entire world is actually, however, quite useful. Not only does this let DigitalGlobe map the entire world, but they also use this extra capacity for humanitarian efforts. “It’s actually easier for us on the humanitarian global development side because we have much more capacity over these areas. There’s a lot more demand for our satellites over developed countries, for instance, right, so people are typically for commercial applications much more interested in the US or Europe or some of these more developed areas versus sub-saharan Africa where we just generally have much more ability to task the constellation and to collect those imagery so it’s actually an opportunity for us to support those use-cases much more than others.” For instance, DigitalGlobe partnered with the Gates foundation to map every single building structure in rural Zambia so aid workers now know things like how many bed nets, vaccines, or food to bring to communities that were previously unmapped. There are few companies the size of commercial space companies that rely on so few assets. What makes DigitalGlobe, for example, run are those five satellites and, to get these to space, to the place where they make money, they had to put them on rockets which tend to, from time to time, blow up. “It’s always a bit of a nail biter as you come up to a launch. We put an enormous capital investment into the satellites, the launch vehicle, and it all comes down to a one hour event lifting off from the ground and going on into orbit and that can be a little bit of a nerve-racking period but certainly very exciting at the same time.” An average of one in twenty rocket launches fail and then on top of that, some satellites fail once they reach orbit which makes the space business risky. Companies like DigitalGlobe will therefore purchase enormously expensive insurance policies on their satellites in case the launch or the satellite itself fails. If they didn’t, one bad launch could spell the end for the company. Of course, some launch providers are much more reliable than others. United Launch Alliance, the launch provider that DigitalGlobe used for their current five satellites, has not had a launch failure in its 11 year history. Insurance rates for ULA would be relatively low while insurance rates for a newer launch provider, such as Orbital ATK or Blue Origin would be comparatively high. Nonetheless, the cost of newer launch providers with insurance included is now often less than the older, more reliable launch companies. But how does DigitalGlobe fund their exploits, what keeps those satellites flying, how do they make their money? “Our largest customer is the US government and we have been very proud to be their mission partner for over a decade and a half coming up on two decades now.” It used to be that the commercial satellite industry was essentially focused on one major customer—governments. In the past the US government has been the single largest customer of the few commercial space companies there were thanks to its enormous defense spending, but today as commercial customers contract commercial space companies, the business is spreading globally. Over the past decade, the customer base has become more international and more diversified. “Our other customers are international customers who may be US allies or may be technology companies across the world. We go deep in the communications infrastructure, online mapping, energy industries, mining industries, forestry applications…” There’s really a huge variety of customers, but the most obvious ones are those mapping companies.“If you’ve ever used Google Maps you’re using our imagery, if you’ve ever used Apple Maps you’re using our imagery, if you ever look and do crowdsourcing projects in OpenStreetMap you’re using our imagery as well,” but perhaps the single most promising use of earth imagery is with autonomous vehicles. Having good, solid, current satellite imagery is an integral part of how autonomous vehicles work. These vehicles can’t just rely on their internal sensors to understand their surroundings—they need a view from above. “As we think about autonomous vehicles it’s not ok to update the image once a quarter, once a year, even once a week. It needs to be, they really need imagery that’s coming in much much faster than that to deal with changes in traffic conditions, changes in roads, crashes, etc.” Uber, which is developing autonomous cars, is already a customer of DigitalGlobe for navigation purposes and as more and more companies move into the autonomous vehicle race, the competition between earth observation companies for their business is likely to heat up. There are plenty of other emerging uses as well which, as an ensemble, are growing the demand for earth imagery day by day. It is a tremendously fast growing industry. But satellite imagery by itself really isn’t worth much. You need something more. “I would say that our customers are demanding more actionable information faster than ever.” Translation: customers want data. They want the information embedded in the images. For that, there’s another company—Radiant Solutions. “So today customers, the big challenge is around, where it used to be more of, ‘hey we just need to get an answer now,’ now it’s more of ‘how do we deal with all this data’ and ‘how do we deal with the more complex questions,’ because they are getting more complex and they’re getting even harder to answer nowadays by virtue of being inundated with data.” Radiant Solutions would describe themselves as a geospatial analytics company—they take satellite imagery and translate it into information. “We're able to take in vast amount of data and make sense of it to produce insight.” They answer big questions. A logging company might ask a question like, “what’s the density of trees in this particular region of Canada,” before purchasing new land and Radiant would be able to look at hundreds or thousands or millions of square miles of imagery to tell them how many trees there are. Now, with so much imagery and such a big world, you can’t just do this all by hand, at least economically. For that reason, there’s been a huge shift in the geospatial analytics business towards using artificial intelligence. “We hear more and more now that data is kind of like the new oil. Well that’s sort of true but the data has to be reliable, it has to be high confidence in the data." So the AI has to be good. To train a machine to find a red car, for example, you need to show it thousands or millions of examples of what a red car looks like, but “It’s very different for a machine to look for a red car in an urban environment as it is to find a red car in snow. So not only are you training those models on how to find the object, you have to train it on where to find it regionally.” It is hugely complicated, but that’s why these guys are in business—to answer complicated questions. Some data, however, isn’t in the visual spectrum. Some data is hidden, but luckily, there’s a special satellite just for that. “In the old days it was just please get me good, solid image pixels to use, and I’ll go figure out how to use them. Today, particularly in commercial space, it's all about information.” That’s Paul Kennedy, Vice President of Ground Systems at MDA. They’ve been in business since 1969. Their most visible project was on developing the Canadarm for the Space Shuttles and International Space Station. As a long-time player in the industry, they serve a variety of functions from developing space robotics to building satellite ground stations, but one of their most valuable assets is that special satellite—Radarsat-2. While most earth observation satellites image using the visual spectrum, what we can see with our own eyes, Radarsat-2 uses radar. “Radar is an active pulse so the satellite actually sends a beam of energy to the ground and reads back what it gets back from the earth and that gives us a couple of interesting advantages in SAR.” For one, radar can see through clouds and darkness. It doesn’t matter what the light and weather conditions are, it’s all the same for Radarsat-2. Now, MDA is a Canadian company, and it’s no coincidence that a Canadian company operates this satellite. Just like the US government is a major customer of DigitalGlobe, the Canadian government is a major customer of MDA, and here’s the thing about Canada—the weather is terrible and it’s always dark, quite literally in Northern Canada where the sun stays down for the entire winter. It’s no coincidence that the company that works so closely with the Canadian government operates the satellite that can see through clouds and night. Without Radarsat-2, the Canadian government would be blind—they would have no way of monitoring huge swaths of their territory in the high arctic for months out of the year. With new launch providers emerging such as Blue Origin and RocketLab and SpaceX, the cost of launching material into space is plummeting. Now, this is useful to these companies, at least in some ways. With lower launch costs, DigitalGlobe and MDA can launch more satellites which means more data for Radiant solutions, but that also makes it easier for competitors to launch satellites. The earth imagery business is growing, but so is the competition. The best known earth imagery start-up, Planet, is launching a constellation of small satellites. While DigitalGlobe’s satellites are the size of a bus, Planet’s smallest are the size of a toaster. With the smaller size, development and launch costs are lower. While in the past starting a space imagery company required hundreds of millions or billions of dollars in funding, the emergence of small-sats means that it’s enormously easier to break into the satellite imagery business nowadays. But there is a key difference between these two companies. DigitalGlobe’s satellites capture imagery with a pixel size of 12 inches while Planet’s primary satellite constellation captures imagery with a pixel size of 10-15 feet at a much lower cost. There are certain uses for high-resolution imagery and there are certain other uses for low-cost imagery so in some ways, these two companies aren’t even direct competitors. Nonetheless, the space industry is changing, growing, and becoming more competitive so the established companies needs to adapt. United Launch Alliance knows that, Airbus knows that, Arianespace knows that, and DigitalGlobe, MDA, and Radiant know that too, so they made a change. These three companies are now one. Along with a forth company, a spacecraft manufacturing company called SSL that will be covered in a future video, these are the entities that make up the newest powerhouse in the space technology business. This merger wasn’t necessarily in response to heavy competition, but rather, at least from an outsiders perspective, a preemptive strike to establish themselves as a major international player before the commercial space industry truly lifts off. “Increasingly, the more traditional aerospace and defense companies that have been supplying technology in space have been able to provide the performance but the cost has been extremely high.” Maxar is now a fully vertically integrated company. In the earth imagery space, for example, they’ll do everything from building satellites, to operating them, to extracting data from imagery. By performing all the steps in the process internally, Maxar lowers its costs and this also puts them in the same league as Airbus as one of the very few end-to-end integrated space companies. The commercial space industry as a whole is doing a phenomenal job of making access to orbital space commonplace. “The routine steps of space activities are slowly being ceded to private enterprise that can do it faster, better, cheaper.” We’re now at a place where launching a satellite to low earth orbit is unexceptional. That’s exactly what we want, easy access to space, and, for near space, that exists right now. Getting beyond earth’s orbit, though, outside our cosmic neighborhood, into deep space, that’s still tough. The problem is that private enterprise, by it’s very nature, needs to make money. Companies and their leaders are beholden to their investors to make money. If they’re not, then they’re not a company. Companies can and do make money with deep space but only through developing and building technology for NASA and other government agencies. There is zero commercial demand for deep space technology today. Going to new planets, to new solar systems, exploring space—that really doesn’t make money. “Many people who think about commercial space, I think they’re over predicting what their role will be. They’re imagining commercial space leading a space frontier, but to lead a space frontier is expensive, and it’s not an obvious return on the investment. You might do it as a vanity project, there are enough billionaires that could all pool their money, Jeff Bezos, Bill Gates, Elon Musk, they could do a vanity project and send humans to Mars, let’s say. But it’s not a business model and it would get a lot of attention but, is that something you can sustain? No, it would be a one-off. When people imagine a future of space and industry they’re imagining a sustained business case.” Of course, you could’ve said the same about the space-race sixty years ago—that was exploration however, in the long term, it was an investment that paid off because space now makes money. “Space today is an integral part of what we know and what we can do on the planet. Communications, imagery, climate science, defense and intelligence, and security applications—all of those are seamlessly enabled by space technologies without most of us going about our daily lives even thinking about it.” The difference between commercial enterprise and governments is time. Commercial enterprises need to think about investments that pay off within the lifetime of their shareholders. “So you’re always thinking about, what is the return on investment you’re making, how long will it take you to achieve the returns on your investment, and what’s the probability that the R&D that you’re putting in will be successful.” “If you take cues from history, the government does what hasn’t been done before and private enterprise does what’s routine.” While companies look at investments in terms of years, governments can look at investments in terms of decades or centuries because governments transcend generations. The innovation that will occur by bringing humans to Mars and beyond will absolutely make money in the very long term, but right now, it would take an enormous amount of money that few people want to risk. You could point to Elon Musk as an exception to this rule, he more than anyone understands the value of super long-term investments like going to Mars, but he also understands that he’s alone in that. Individuals don’t want to invest in something that won’t make money until after they're dead. Musk has stated that he has no plans to take SpaceX public until after a successful mission to Mars which means that, for the moment, the company is almost acting more as an organization. He’s funneling the money from launches, which make money, into exploration, which doesn’t. “Governments need to lead the way because they have the longer time horizons that they can think about and monetize. When they do that, once they lead the way they have now quantified the risks, and you know the cost, and where the friendlies are and where the hostiles—whatever are the things that would compromise your mission they’ve already figured this out. Then if they do it right, you then hand that to private industry that makes a buck off of it then the government can tax that if they so choose.” Maxar Technologies and its four businesses, meanwhile, absolutely innovate including in deep space technologies, but they’re not going to put the pieces together to go to Mars by themselves because that’s not a good investment. One should be careful to realize that this coming era of commercialized space does not necessarily translate into a renaissance of space exploration. Commercial industry is not a substitute for NASA or the ESA or any other government institution. They are collaborators, they can make the government’s job easier and cheaper, but they cannot replace those whose jobs are to go where no human has gone before. The next few decades and centuries can be the era of space exploration, but for that, you need a public, you need an electorate that understands anything good, anything truly worthwhile takes time. There are so many thanks I have to give for help with this video, but one is to Away not only for making this video possible through sponsorship, but also for literally carrying my possessions over the 15,000 miles I travelled while making this video… and unfortunately that number is not a mistake. I’ve now owned my Away suitcase for almost a year, have travelled all around the world with it, and I love it. The suitcase is just solidly built, you can feel it, and has a built in yet removable battery, a laundry bag, a laptop sleeve, and a compression system so you can pack more in a smaller space. Best of all, for how good it is, the Away suitcase is sold for an amazing price and its at an even more amazing price if you go to awaytravel.com/wendover and use the code “wendover” at check-out to get $20 off your Away suitcase. They’re so confident you’ll love the product that all Away suitcases have a lifetime warranty and 100 day unconditional return policy. It’s quite literally no risk and they made this enormous video possible so if you need a suitcase for life, check out awaytravel.com/wendover and use the code “wendover” at checkout. I also have to give a huge thanks to Maxar Technologies, especially Kristin Carringer and Turner Brinton, for letting me film this video, as it takes an enormous amount of work to allow cameras into such a high security environment. Lastly, as I mentioned at the beginning, I appeared on Neil deGrasse Tyson’s show StarTalk and also launched a new personal channel where I made a behind the scenes video for that appearance. Both are linked in the description and on-screen now. Thanks again for watching and I’ll see you again in three weeks for another Wendover Productions video.
Info
Channel: Wendover Productions
Views: 1,439,543
Rating: 4.8925257 out of 5
Keywords: space, outer space, neil de grasse tyson, startalk, cosmos, digitalglobe, mda, radiant solutions, ssl, maxar, maxar technologies, earth imagery, sattelites, on location, interview, interviews, interesting, animated, wendover productions, wendover, aerospace, satellite assembly, data analytics, documentary, mission operations center, behind the scenes, access, company, industry, commercial space, space industry
Id: hiRBQxHrxNw
Channel Id: undefined
Length: 27min 11sec (1631 seconds)
Published: Tue Mar 27 2018
Reddit Comments

were atleast 20 years away just like always.

👍︎︎ 3 👤︎︎ u/obes22 📅︎︎ Mar 27 2018 🗫︎ replies

Next trillion dollar industry is far closer than this sci-fi shit that's more than a few decades away.

👍︎︎ 7 👤︎︎ u/[deleted] 📅︎︎ Mar 27 2018 🗫︎ replies

I don't agree with the whole "we should be spending that money on earth" argument. I don't disagree with the issue it tries to tackle; we should be spending more money on human needs.

However, the argument fails to tackle anything, as resource scarcity is a problem with ALL of capitalism, rather than a problem with space industries.

The space industry is no more or less immoral than any other industry, with regard to their financial obligations (which their moral duty is not to the common good, but to the investors pockets). They don't deserve the finger-pointing and moral high-horsing from so many people.

👍︎︎ 2 👤︎︎ u/taintedblu 📅︎︎ Mar 27 2018 🗫︎ replies

I could have sworn it was going to be cold fusion

👍︎︎ 1 👤︎︎ u/ElagabalusRex 📅︎︎ Mar 27 2018 🗫︎ replies

20 years away like always. private industry can create rockets to ferry supplies/people to LEO/geosync for a profit. Beyond that there isnt a market for building all the parts required in a mining industry. Sure step 1 is getting lowered but deep space mining requires manufacturing plants, deep space cargo transport, let alone some viable means for mass re-entry to make it financially viable. Its not like there mining something you couldnt mine here for cheaper. basically at this point theirs no way for anyone to see any possible ROI. until then keep improving and maybe there will be.

👍︎︎ 1 👤︎︎ u/obes22 📅︎︎ Mar 28 2018 🗫︎ replies

Love seeing a video from Wendover about my industry. Good stuff!

👍︎︎ 1 👤︎︎ u/heifinator 📅︎︎ Mar 28 2018 🗫︎ replies
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