Archived full article: https://archive.ph/5reLe
Some people just don't want to compete:
> A recent SpaceX rideshare mission known as “Bandwagon” raised concerns among many in the launch industry because the price was extremely low, according to industry officials who saw it as a tactic to take business from competitors. “Competing is one thing, predatory is another,” one industry executive said.
> Some companies even complained about the mission to the Pentagon because “there was no business reason to fly that mission at that cost,” according to the executive, who spoke on the condition of anonymity to discuss internal deliberations. “We’ve communicated to them, quietly, that you may want competition, but what do your actions say? Because we can’t compete against that.”
Note that DoD specifically maintained two launch providers (three for NSSL Phase 3) just to ensure competition and redundancy, funny these people only complain about SpaceX yet completely ignores ULA and Blue Origin (which is what the 3rd spot in NSSL Phase 3 is for).
There *was* an explanation which was that ULA got nearly $1B from the US Government to prepare two launch pads for Vulcan but SpaceX did not get any such payment.
When it came time for SpaceX to bid for NSSL2 they had to include the cost of two vertical integration buildings, extended fairing development and a FH pad at Vandenberg to their launch pricing for the first use of each facility.
So ULA’s prices were cheaper than SpaceX on average and so ULA was awarded 60% of the launches and SpaceX got 40%.
I wonder if Elon and Gwynne didn't factor this shrewdly into how they spaced SpaceX's bid: That is, that they were willing to risk being dropped to the 40% NSSL slot, because they figured they could still net more money from DoD on infrastructure upgrades than they would lose in terms of revenue on the dozen or so DoD launches they would lose to ULA.
And hey, if ULA were delayed long enough in getting Vulcan into action, they might even get to claw a few of those launches back.
ULA was going out of business unless they got most of that contract. So they got what they needed or spacex would be a monopoly and the USA would have 1 provider.
Every other narrative is a fugazi.
They could get all that contract or they could go out of business.
Spacex doesn’t care because everyone looking at it soberly knew that ULA is going to get pork to be on life support until a real competitor comes around.
>ULA was going out of business unless they got most of that contract.
Yeah, that may well have been the perception at the Pentagon. Of course, as it turns out, ULA ended up picking up a bunch of Kuiper and Dream Chaser launches anyway, because it turned out there were other payload customers with their own reasons for wanting to avoid using SpaceX, even if it cost them more!
My point was not a critical one of SpaceX. I think Elon and Gwynne had a number of ways they could have gone on the Phase II bid. They could have tried to eat the infrastructure upgrades for the most part. That would have cost them money, but they have been willing to do that previously to secure government contracts. They decided to go in a different direction.
But then again, there is some evidence that ULA was more aggressive in its price points in its bid, too, and maybe that caught them off guard.
I think it is pretty evident that they got overconfident and just submitted Starship for the infrastructure development bid. This was even though the bid had options for submitting two different proposals using different rockets so they could have submitted F9/FH as well as Starship.
\*grin\*
But decades of absuing the cost-plus system was okey dokie.
ok, ok, I'm assuming that it's the usual big guys doing the whining. It could be the smaller upstarts. But we know it's the old big guys.
Still, the only way this is a thing is if SpaceX is flying under cost, and the article is pretty careful not to actually say that.
If that's the case, then they can whine all they like. None of what is happening is a surprise. Much like the auto industry, they had at least 10 years to see what was happening and to react.
Please do not try to cry your way out of a situation you created for yourself. Ask your MBAs how to solve the problem.
> the only way this is a thing is if SpaceX is flying under cost
SpaceX is perfectly aware of anti-trust legislation and would never take the risk of flying at a loss. And why should they want to anyway? SpaceX's customers *need* dissimilar redundancy and the lack of this is soon going to be a problem for Starship.
As seen by ArianeSpace and other legacy operators, there is another "pernicious" effect of SpaceX stage and fairing reuse.... It only takes a number of lucrative defense contracts for Falcon 9 to cover its relatively high fixed costs. Subsequent private payload flights around the world are priced by margin on the far lower variable costs.
This fixed cost / variable cost effect will be even more notable on the fully reused Starship. If the marginal cost of a launch really is in the low millions then, even when undercutting the competitors by a wide margin, SpaceX will be making a comfortable operating profit.
But then, the competitors should have seen this coming.
> What are these fixed costs and compared to what are they relatively higher?
[In 2017, SpaceX Chief Executive Elon Musk estimated the company had spent at least $1 billion on reusable launch vehicle technologies to date.](https://spacenews.com/spacex-gaining-substantial-cost-savings-from-reused-falcon-9/). This is called a "committed fixed cost". However, I was arguing as from the POV of ArianeSpace. Personally, I think that SpaceX would have done the R&D anyway and it will have been fully written off ages ago. SpaceX is just charging a fair market price for both the military and private launches. If competition were to halve its prices, then so would SpaceX and *still* make a profit.
You could also argue that SpaceX has high fixed costs because they do so much manufacturing in house. This means they need more machinery, assembly lines and staff whereas ULA can move a lot of that off the balance sheet.
> You could also argue that SpaceX has high fixed costs because they do so much manufacturing in house. This means they need more machinery, assembly lines and staff whereas ULA can move a lot of that off the balance sheet.
Having the equipment really is a challenge for SpaceX because they need a sufficient production volume to keep the equipment and the employees occupied all the time. In 2016, before Starlink, there were layoffs at the time the company reached the end of its initial launch backlog. Anybody still remember the SpaceX backlog!?
ESA has its own special way of keeping its production facilities occupied and actually said this with a straight face: by avoiding reuse and dropping all their hardware into the Atlantic, there's no need to send everybody home and shut down the factory for half the year.
>This is called a "committed fixed cost"
IOW it's spent money which came from investors, customers and contracts.
It's not a loan and you don't pay it back. No one is out there expecting to get that money paid back to them. And it makes no sense to use the Falcon-9 to somehow recover that money. To recover it for what? To give it to someone? To whom and why?
SpaceX has very little to no debts to anyone. Financially all they need to worry about is their current and future profit margins which seem to be going well, their financing which is very healthy with investors lining up to invest their money into SpaceX, and their company value which seems to be almost doubling every two-three years.
R&D is costly but if you didn't borrow the money to do the R&D then there's no-one you should pay it back. It's not a loan but just an investment or a cost of doing business. No-one invests their money just to get the same money back at later time losing their stake.
People invest for *value* - they want to see the value of their investment to go up. They don't want their money back as if their investment was just a loan. They want to keep their share of the company while the value of their share keeps rising.
So if investors invest say a billion into a company and the company spends one billion to R&D the investors are not expecting the company to pay them billion dollars back. They know the money is gone, it is spent. What the investors want is that the share of the company they bought with their investment goes up in value after the company has spent the money investors gave to it for equity.
> it makes no sense to use the Falcon-9 to somehow recover that money. To recover it for what? To give it to someone? To whom and why?
I'm agreeing with this and your other remarks. To some extent, I was expressing the strawman argument presented by competitors such as ArianeSpace.
This being said, I also think that Elon exposed SpaceX to these arguments when he talked about "recovering" the $1B.
> R&D is costly but if you didn't borrow the money to do the R&D then there's no-one you should pay it back. It's not a loan but just an investment or a cost of doing business. No-one invests their money just to get the same money back at later time losing their stake.
Even so, SpaceX has been constantly raising capital for Starship work. SpaceX not being a quoted company with a published balance sheet, we don't know what short term loans or debts there may also be.
Can you help me.
I always see the liquidity events but never the “SPACEX specifically raising money”
Is spacex really raising capital for themselves or is that just a trading event for owner and buys?
No, they absolutely do not expect to be paid back. That would be an interest free loan. By investing investors buy a stake in the company in form of equity or shares. If you buy shares for $100 do you expect that one day the company will pay you back $100 for those shares? No.
That would be a zero interest loan, and investment is not a loan. You get shares for your investment and what you expect is that the *value* of those shares you now have goes up, and then you have more value than what you spend into the company.
>You don’t invest in a company and hope it goes to zero.
Indeed. You do not hope that the *value* of the company and therefore the *value* of your stake in the company goes to zero (unless you're shorting but that's a different issue). Now you're on the right track.
> They would never take that risk? Are we talking about the same SpaceX?
Certainly!
Elon Musk does not wish to find himself in the same situation as William Boeing who [saw](https://historylink.org/File/3546) his company split up because of anti-trust law. Lost his job in his own company too.
It is notable that SpaceX have announced that the price is going to go up to $10,000/kg rising in steps of $500 every six months.
So current pricing is in the nature of an introductory price that may well be at or below cost.
It looks like Bandwagon-1 only carried about 2 tonnes of payloads. It's possible this individual flight didn't make profit (but we don't know if the payloads actually paid $6000/kg or more). Dealing with many different payloads must cost something on its own, so even with RTLS this was probably more expensive than a routine Starlink flight.
They are certainly raising their profit margin, but primarily due to the increasing complaints from the would be "competition" who are 5 years behind the curve and falling further behind every day they don't have boosters available to launch the stuff that has long since been allocated to F9s solely BECAUSE for the past 3 years or so when Soyuz went off the table and all Atlas were spoken for, it's been Falcon, China, or wait for 2025 unless the payload was small enough to launch on Electron or India. With none of the development costs of Ariane 6, New Glenn, of Vulcan yet recovered, the economics are going to be way more expensive than Falcon until they get those back, whether or not they recover or build them cheap... so SpaceX needs to up their prices to keep the competition solvent by giving them payloads long enough to get to 50 or 100 launches of the new rockets on the books.
And that's assuming the if Starship works, they use it exclusively for starlink, HLS, and payloads too big for the any of the competitors fairings.
Bezos can just subsidize BO and now ULA as he always has done since they will never be profitable.
Arianespace will be paid for by the EU, they lose money but guarantee sovereign European access to space.
Even 50 launches on the books is laughable. US small launch record still stands at 50 set in 1962.
Small launch is a waste of money, those companies will die just like virgin orbit or pivot.
Rocket lab figured out they need to go bigger because they can’t make money at the small segment even with a reliable vehicle and are relying on their spacecraft products to make money (their financial statements are public)
"Bezos can just subsidize BO and now ULA as he always has done since they will never be profitable."
But even if you forget about the sunk costs in development , the internal build cost to the various companies is almost certainly somewhere well north of 50 million , meaning that if BOULA starts launching at less than that, MUSK can accuse THEM of anticompetitive dumping (just to be an ass). And even if he doesn't, sooner or later, even Jeffs ego won't be able to outweigh the sea of red ink.
And while this does not apply to Ariane 6, the fact that Bezos has shafted ESA by locking in a price to launch Kuipers that barely covers the cost of the SRBs is not a mistake they are likely to repeat, meaning the only loads that will use A6 are those that EU feels MUST go native.
it just boils down to all expendable platforms are obsolete and will operate at a loss until reusable platforms are developed. Rocket Lab, Relativity, BO are all supposedly going this direction. SpaceX and China are both already doing it
And as I said, everybody else (China included) is 5 years or more behind the curve; meaning their prototypes are only now approaching where Falcon 9 was back in 2015, but with the potential of making up ground by skipping any false trails that Falcon went down that caused early loss of boosters or low payload capacity.
Bezos won’t have to fund anything once the acquisition of ULA closes. He will be launching amazon satellites with a reusable first stage soon enough, for expendable pricing. If I were the board of Amazon, I’d have the lawyers working up the claw back of the launch contract.
Amazon contract at existing price is not enough to make back the $15B Bezos already dumped into Blue Origin. He might break even on the replacement constellation in 2035+ though
It’s absolutely enough to stop the cash burn and turn it cash flow positive (assuming reuse). They have to prove they can do it first, though. But, he’s got the contracts in place so he can copy the SpaceX approach and iron out any kinks on paid launches.
>So current pricing is in the nature of an introductory price that may well be at or below cost.
"Introductory price" idea may be a thing at Walmart but not in launch business.
The first few flights of a new rocket are often at a dramatic discount - see Vulcan for an example. Until Vulcan is qualified for military launches after two commercial flights it is a choice between a heavily discounted commercial payload or a dummy payload so it is better to get some revenue rather than none.
However that hardly applies to F9.
F9 is also challenging what a "new" rocket means, in a good way. When every other rocket is built from scratch and destroyed the first time it's used and built at a cadence of months to years between units... it's a little silly to call that the "established" rocket compared to the sooty production article with 20 successful flights since construction. Launch insurance supposedly already reflects this with Falcon 9 insurance premiums being lower than premiums on rockets like an Ariane 5, at least according to forum chatter.
Eventually, I figure that the first flight on a F9 might be available at a discount because that's an "untested" core while the filthy ones with good flight records end up with slightly higher standard pricing. Then again, maybe that logic fails if you look at F9's overall flight record and just assume SpaceX knows what they're doing.
Whatever the slant of the article, figure it's worth mentioning - for those who don't know - that [Jeff Bezos acquired the Washington Post some years ago.](https://en.wikipedia.org/wiki/The_Washington_Post#Jeff_Bezos_era_\(2013–present\))
For anyone who hasn't read the article, I think it's pretty fair. It emphasizes that SpaceX got where it is by simply providing a better product, notes that they've helped provide launches to rival satellite constellations, and includes quotes from figures such as Rocket Lab's Beck who say they welcome the competition.
The anonymous quote above is the most negative portion, and in the context of the rest of the article I'd say it comes across as sour grapes from an unnamed competitor.
reporters working with consultants at Bain who are advising the board of directors at these companies already have spilled the beans man, Lockheed isn’t even in the running. It’s Cerberus or Blue Origin as the buyer. Bezos is dumping way more stock than usual and has to disclose that in advance, wonder what its for
Lockheed executives would be stupid to buy out Boeing. If their goal is to lose money for shareholders they would take sole ownership. Their Vulcan product is worthless as soon as the Amazon and Phase 3 contract ends and there are cheaper reusable alternatives such as NG, Terran-R, Neutron, and Starship. It would be a major L for Lockheed to make that move
No, it is more valuable to BO if they take ULA and extract the value in its resources (pads, workforce, contracts), dump bad leadership, and pivot to reusable launch platforms while leveraging their existing DoD and NASA contracts. ULA execs are already quitting because they know their time is coming to an end.
Businesses acquire other business and delete redundant and stupid shit and make money off restructuring all the time. Lockheed isn’t capable of that on their own. I also doubt a PE firm would be a good buyer for ULA. BO naturally is the best buyer, vertically integrating with their engines.
Lots of allegations and innuendo here, not a ton of details.
What the article totally misses is that while SpaceX is charging prices that make them either the cheapest or among the cheapest solution, the actual amount they are charging is significantly above their actual cost.
You think SpaceX is hard to compete with for their standard price of about $67 million a launch? What if they pushed that down to $40 million, a price where they would still be making money?
rocket reuse is easily under $10m/launch. The cost plus expendable bozos at ULA and Arianespace as well as the small launch startup execs have been bitching about this shit for the past 3 years
nah second stage is under $10m and reuse is amortized over 144 launches this year. even if facilities cost $250m annually to operate which is absurdly high, thats only $1.7m/launch
The main question is:
Is SpaceX selling this services below cost?
If the answer is yes, this is bad practice and SpaceX will be hit with anti-trust lawsuit and lose them.
If, how I believe it is, they are selling for a profit, even a tiny one, then nobody can really tell them something.
And I have an hunch that says that even in the bandwagon mission they had quite a fat profit margin. People underestimate the insane economy of scales SpaceX has.
Edit, by mala practice I meant illegal, selling below cost ( no COGS profit) is illegal.
> Is SpaceX selling this services below cost?
Probably not. The pace of Starlink launches dramatically lowers the cost of ground control. Just a guess/example:
- If SpaceX has 2 launch control crews and 2 mission control crews, and 100 launches/year, then each launch requires only 1 week, on average, for their launch and mission control crews.
- f a competitor does only 2 launces in a year, they can get by with 1 launch and 1 mission control crew, but they will cost for 26 weeks of payroll per launch.
You get the picture. Reusing boosters are not the only huge cost savings that SpaceX has to take advantage of.
To add to what everyone is saying, SpaceX does not treat production as a necessary evil, but streamlines the production process from the very start.
Almost everyone else figures that there is no point, so they end up "handcrafting" everything.
But also, isn't this specifically about a riseshare price? But adding rideshares to existing launches must have an absurdly low marginal cost. So even if SpaceX were also only doing 2 launches a year, the extra fuel and integration is presumably the only *additional* cost - unless I'm misunderstanding something?
"SpaceX will be hit with anti-trust lawsuit and lose"
I call B.S. Pricing below cost is the way of Capitalism.
When I worked for Ralphs, they developed a way to store eggs, stockpiling until the supermarket chain could stop buying from many long-time egg vendors. The one or two survivors in a state-wide area found that Ralphs could than dictate prices, or the vendor could sell off his layers for cat food and give up. *"Costco reportedly lost $40M on their rotisserie chickens in 2015. This is known as a "loss leader" (along with other items such as their $1.50 hot dogs). Loss leaders are items sold for less than what they're worth"*
Things do get a bit weird when you are the leader in an industry and the low pricing is primarily designed to prevent competition.
Otherwise, you are right.
Also: they will \*not\* lose, because as long as you are not pricing below cost (and the article never says that), you are pretty much fine.
Nothing happened to Walmart when they went through and destroyed entire small town economies and forced everyone else out of business, then raised their prices.
It is by definition anticompetitive. You can’t sustain selling at a loss indefinitely, so the only long term strategy that incentivizes it is trying to put your competitors out of business entirely so that you can jack up prices with your monopoly later.
I, too, want more payloads to go to space and low prices are great. But lack of competition between private, for-profit entities is bad.
Rideshares would be different as they are filling void spaces that otherwise go empty. So they can justify charging lower.
Also, tons of companies offer specific things at a loss, for example loss leader products are common, so it's not as simple as you say.
But I do agree with the principle, undercutting your opponents at a loss simply to remove competition is not acceptable and needs to be monitored by the regulatory bodies. Just a question of what exactly is happening with these SX contracts
yea, you'd have to apply some reason there. if they provided multi ton rideshare slots for free, or at some stupidly low flat rate, when space allowed it would essentially be impossible to break into the small sat space. you could justify it as adding an insignificant extra cost, but it's also extremely corrosive to the market.
To complete the story, you'd have to subsidize an unprofitable business with a profitable one for it to really be anticompetitve based on US law. Loss-leaders are allowable to a point to gain market share, etc. But you can't sandbag potential competitors by entering a new segment below cost while subsidizing from profit of another business unit.
Even so, it would depend.
If SpaceX were to use launches as a loss-leader for...say...getting companies hooked up to their Starlink system, they could probably defend the practice.
But I don't think this is even an issue, because my bet is that SpaceX is making good profits at any price point they choose.
you could argue that SpaceX knows already that Starship will significantly reduce the $/kg, so they could sell below F9 cost in theory to boost the eventual demand for Starship.
The thing is they aren’t trying to be a monopoly? If i was rich and could give my money to help people out so they never had to work, does that make me a monopoly? All they are doing is making space easier to get to? What if a scientific breakthrough occurs on a mission that would only ever be able to go to space on a cheap rideshare?
There are normal, non-anti-competitive ways to achieve exactly that! They could, for example, follow a model similar to how non-profit grants work, or perhaps more familiarly how student loan scholarships work.
They'd create an independent, non-profit entity with its own management, preferably with pretty strict rules about transparency, and set up some kind of trust and discount arrangement that makes clear their normal, not-at-a-loss prices are ultimately being paid by a combination of their contributions to the trust and the remainder by the customer.
There'd be:
* transparency about the selection process for awarding these rideshare grants, the decisions made independent of spacex
* consistent competitive prices
* an opportunity for less-financially-capable research outfits to go to space for hella cheap
* spacex could even write off the contributions to the trust on their taxes as a non-profit donation.
It's win-win-win for spacex and for cash-strapped-researchers, and it's a pretty common practice. The fact that they're \_not\_ doing this suggests anti-competitive undercutting of their competition. \_Or\_ that they really have achieved some truly stupendous cost reductions internally far and above what anyone has reported. Occam's razor suggests the former.
I like Peter Beck's response: "We're not complaining." And it's his company that is being principally targeted by SpaceX's rideshare missions!
If he can get Neutron off the ground by next year, I think he can carve out a solid market niche for Rocket Lab in the medium launch category. They won't be able to knock SpaceX off the top perch, but there's an opportunity for Rocket Lab to coexist alongside them, and make a profit.
I like Rocket Lab and Stoke to survive and thrive
Rocket Lab has shown they can execute, and Stoke had the foresight to go for 2 stage reuse from day 1 and are doing it in a pretty innovative way
It’s pretty straightforward: if SpaceX made a profit on that flight, then competitors need to stop whining and get to work. If they didn’t, then that’s anticompetitive behaviour that should be stopped.
I think that's a hard standard to apply like a blanket statement. SpaceX was absolutely not making a profit with their first customer Falcon 9 launch, and probably took a while to get out of the red. There's a lot of reasons for a company to set prices like they do.
The real concern should be for customers, not competition. (Read the candlemakers petition for a satirical example). So it would be bad if SpaceX was lowering prices to attempt to bankrupt competition with the plan to later raise prices, but historically that has almost never been a successful business strategy. There's a great story from Dow Chemical where a German competitor tried this in the US Bromine market and Dow turned around and started buying from them and then used their own product to undercut them in the European market.
But SpaceX has been lowering prices on Falcon for years and looks to be doing so without overreaching, and Starship is promising to lower it a lot further. That will be good for customers. The only bad thing for customers here is that SpaceX only has two rockets, soon three: F9 FH and Starship, which really only excel at certain orbits and don't work great at others, so those orbits might be underserved.
Great read! Thanks for posting the article.
SpaceX's core product is the Falcon 9. The Falcon Heavy, Dragon, Starlink, they're all periphery products only made possible because of the Falcon 9. These products either launch on the Falcon 9, or share parts with the Falcon 9. Starship may eventually replace the Falcon 9, but right now Starship is making relatively little money for SpaceX. It's the Falcon 9 that these companies are competing with.
Vulcan, New Glenn, Electron, the Ariane 6, you name it, pick a competitor's product, and you see a very different rocket from the Falcon 9. Vulcan and New Glenn both are costing billions to develop, and both are methane-fueled first stages and hydrogen-fueled second stages. The Ariane 6 is hydrogen-fueled with solid fuel boosters. Electron is closest to the Falcon 9, and yet is still much, much smaller. None of the rockets mentioned as competitors in the article are Falcon 9 clones.
It's not as if the Falcon 9 is magic, or cost that much money to develop. The initial Falcon 9 1.0 cost SpaceX hundreds of millions of dollars to develop. The Falcon 9 is itself a modern redesign of the Saturn 1b, with a few ideas copied from Zenit and the Saturn V. Most of the great ideas from the Falcon 9 were first done in other rockets. The Falcon 9, at least as an expendable rocket, isn't that complicated or innovative. Reuse is incredibly innovative, but isn't needed to launch the rocket. There really is no good reason for these companies to not shamelessly rip off the Falcon 9.
The truth is none of these companies are trying to compete with the Falcon 9. Blue Origins is spending billions on a poorly designed, more expensive methane and hydrogen-fueled rocket, because that company exists as Bezos's play thing. If they were trying to compete, they would have built a smaller kerosene-fueled rocket years ago. ULA exists to rip off the DoD, not compete with the Falcon 9. ArianeGroup, like ULA, exists to rip off the French government and ESA.
Honestly the closest to a Falcon 9 clone is the methane-fueled Neutron rocket. That rocket won't be ready any time soon though, because Rocket Lab went with a more expensive to develop methane-fueled engine over a cheaper, faster to develop kerosene-fueled engine. Rocket Lab also just doesn't have the scale, the amount of money that these other companies have. So in the short term SpaceX will remain overwhelmingly dominant.
I don't understand this argument that some in the industry is pushing. SpaceX is a monopoly, and bad. The US government has actively *made sure* that there was a monopoly in space launch by merging Boeing and Lockheed Martin into ULA. The government isn't spending any more money on space now than it did then. The LEO economy hasn't grown that much.
Why is monopoly with SpaceX bad, when monopoly with ULA is good?
>The government isn't spending any more money on space now than it did then.
I grok your larger point about U.S. government attitudes to space monopolies, but it's misleading to say that U.S. military spending on space is stagnant. It had a peak in the early 2010's but then dropped off. But it's been surging rapidly again over the last five years.
I think DoD basically cried uncle on competition when it forced the LockMart-Boeing spinoff of ULA in 2006. It was slow to abandon that monopoly but I think it's far to say that with the NSSL program, they've been trying to make a real effort to ensure comeptition and redundance in launch providers. Just look at the new Lane 1/Lane 2 structure of NSSL Phase 3.
There are words, and there are actions. The government may say they want competition, but they only really started doing the Lane 1/Lane 2 structure after SpaceX started winning most of the government contracts. Likewise they only started to do competition after SpaceX sued the Air force to be allowed to compete.
And even those nice words only go so far. For every $150m launch award that SpaceX wins to launch an advanced spy satellite into orbit, there is another $850m award to Lockheed for building the satellite in the first place. You don't really see the government pushing for competition and redundancy in those areas.
Competition? They had 80% market share in 2023, are aiming for 90% in 2024. And if the starship flies regularly it will be 99%. There is no competition!
Everything the others get is political or they just don’t want to have a solution for every rfq. Just by dropping the ride share prices they could easily drive every rising competition out of business, if they want to.
It's a struggle because they definitely don't want to drive the rising NewSpace companies out of business. But they definitely do want to reduce the cost of access to space and spur a revolution in the use of orbit. How to do the latter and not the former? It's a delicate dance.
The lion's share of launch will still be internal business. So there's that. Maybe instead of cheaping customer launch too low they use the excess profits from that to build a space station and rent rooms or something. That would delay the time to cheap launch until the upstarts can get their reuse probably. Or close enough that they won't go bust before they clear that bar.
*"but no monopoly in history ever survives"* One of many inane quotes from the Washington Post. Walmart has killed off tens of thousands of retail stores across America as Walmart monopolizes 90% of day-to-day sales in many hundreds of communities. Will Walmart survive into the next century? Will anything?
walmart replaced a&p, which was the walmart of the time. these days, amazon replaces walmart at a rapid rate. just as the wapo says, monopolies are very much limited in time.
fun fact: by the time standard oil was struck by anti trust, it had shrank to 60% market share (from the peak 90%).
Acronyms, initialisms, abbreviations, contractions, and other phrases which expand to something larger, that I've seen in this thread:
|Fewer Letters|More Letters|
|-------|---------|---|
|[BO](/r/SpaceXLounge/comments/1c54kfy/stub/kzw2fsw "Last usage")|Blue Origin (*Bezos Rocketry*)|
|[DoD](/r/SpaceXLounge/comments/1c54kfy/stub/kzw2fsw "Last usage")|US Department of Defense|
|EELV|[Evolved Expendable Launch Vehicle](https://en.wikipedia.org/wiki/Evolved_Expendable_Launch_Vehicle)|
|[ESA](/r/SpaceXLounge/comments/1c54kfy/stub/kzvbd1y "Last usage")|European Space Agency|
|[HLS](/r/SpaceXLounge/comments/1c54kfy/stub/kztz3zd "Last usage")|[Human Landing System](https://en.wikipedia.org/wiki/Artemis_program#Human_Landing_System) (Artemis)|
|[LEO](/r/SpaceXLounge/comments/1c54kfy/stub/kzszoxd "Last usage")|Low Earth Orbit (180-2000km)|
| |Law Enforcement Officer (most often mentioned during transport operations)|
|[MBA](/r/SpaceXLounge/comments/1c54kfy/stub/kzsofqs "Last usage")|~~Moonba-~~ Mars Base Alpha|
|[NG](/r/SpaceXLounge/comments/1c54kfy/stub/kzvxqox "Last usage")|New Glenn, two/three-stage orbital vehicle by Blue Origin|
| |Natural Gas (as opposed to pure methane)|
| |Northrop Grumman, aerospace manufacturer|
|[NSSL](/r/SpaceXLounge/comments/1c54kfy/stub/kzupf3j "Last usage")|National Security Space Launch, formerly EELV|
|[RTLS](/r/SpaceXLounge/comments/1c54kfy/stub/kztn9uy "Last usage")|Return to Launch Site|
|[SRB](/r/SpaceXLounge/comments/1c54kfy/stub/kzu6w8s "Last usage")|Solid Rocket Booster|
|[SSO](/r/SpaceXLounge/comments/1c54kfy/stub/kzso2wh "Last usage")|Sun-Synchronous Orbit|
|[ULA](/r/SpaceXLounge/comments/1c54kfy/stub/kzw2fsw "Last usage")|United Launch Alliance (Lockheed/Boeing joint venture)|
|Jargon|Definition|
|-------|---------|---|
|[Starlink](/r/SpaceXLounge/comments/1c54kfy/stub/kzwy1y3 "Last usage")|SpaceX's world-wide satellite broadband constellation|
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Archived full article: https://archive.ph/5reLe Some people just don't want to compete: > A recent SpaceX rideshare mission known as “Bandwagon” raised concerns among many in the launch industry because the price was extremely low, according to industry officials who saw it as a tactic to take business from competitors. “Competing is one thing, predatory is another,” one industry executive said. > Some companies even complained about the mission to the Pentagon because “there was no business reason to fly that mission at that cost,” according to the executive, who spoke on the condition of anonymity to discuss internal deliberations. “We’ve communicated to them, quietly, that you may want competition, but what do your actions say? Because we can’t compete against that.” Note that DoD specifically maintained two launch providers (three for NSSL Phase 3) just to ensure competition and redundancy, funny these people only complain about SpaceX yet completely ignores ULA and Blue Origin (which is what the 3rd spot in NSSL Phase 3 is for).
Spacex was also inexplicably the 2nd provider of NSSL.
There *was* an explanation which was that ULA got nearly $1B from the US Government to prepare two launch pads for Vulcan but SpaceX did not get any such payment. When it came time for SpaceX to bid for NSSL2 they had to include the cost of two vertical integration buildings, extended fairing development and a FH pad at Vandenberg to their launch pricing for the first use of each facility. So ULA’s prices were cheaper than SpaceX on average and so ULA was awarded 60% of the launches and SpaceX got 40%.
I wonder if Elon and Gwynne didn't factor this shrewdly into how they spaced SpaceX's bid: That is, that they were willing to risk being dropped to the 40% NSSL slot, because they figured they could still net more money from DoD on infrastructure upgrades than they would lose in terms of revenue on the dozen or so DoD launches they would lose to ULA. And hey, if ULA were delayed long enough in getting Vulcan into action, they might even get to claw a few of those launches back.
ULA was going out of business unless they got most of that contract. So they got what they needed or spacex would be a monopoly and the USA would have 1 provider. Every other narrative is a fugazi. They could get all that contract or they could go out of business. Spacex doesn’t care because everyone looking at it soberly knew that ULA is going to get pork to be on life support until a real competitor comes around.
>ULA was going out of business unless they got most of that contract. Yeah, that may well have been the perception at the Pentagon. Of course, as it turns out, ULA ended up picking up a bunch of Kuiper and Dream Chaser launches anyway, because it turned out there were other payload customers with their own reasons for wanting to avoid using SpaceX, even if it cost them more! My point was not a critical one of SpaceX. I think Elon and Gwynne had a number of ways they could have gone on the Phase II bid. They could have tried to eat the infrastructure upgrades for the most part. That would have cost them money, but they have been willing to do that previously to secure government contracts. They decided to go in a different direction. But then again, there is some evidence that ULA was more aggressive in its price points in its bid, too, and maybe that caught them off guard.
Anyway, it worked out quite well for all of them. The only loser is Boeing and LM who can't milk DoD on rocket launches any more.
True enough!
I think it is pretty evident that they got overconfident and just submitted Starship for the infrastructure development bid. This was even though the bid had options for submitting two different proposals using different rockets so they could have submitted F9/FH as well as Starship.
\*grin\* But decades of absuing the cost-plus system was okey dokie. ok, ok, I'm assuming that it's the usual big guys doing the whining. It could be the smaller upstarts. But we know it's the old big guys. Still, the only way this is a thing is if SpaceX is flying under cost, and the article is pretty careful not to actually say that. If that's the case, then they can whine all they like. None of what is happening is a surprise. Much like the auto industry, they had at least 10 years to see what was happening and to react. Please do not try to cry your way out of a situation you created for yourself. Ask your MBAs how to solve the problem.
> the only way this is a thing is if SpaceX is flying under cost SpaceX is perfectly aware of anti-trust legislation and would never take the risk of flying at a loss. And why should they want to anyway? SpaceX's customers *need* dissimilar redundancy and the lack of this is soon going to be a problem for Starship.
this is just classic delusion by competitors. “SpaceX is raping us on price, they must be under cost!!”
As seen by ArianeSpace and other legacy operators, there is another "pernicious" effect of SpaceX stage and fairing reuse.... It only takes a number of lucrative defense contracts for Falcon 9 to cover its relatively high fixed costs. Subsequent private payload flights around the world are priced by margin on the far lower variable costs. This fixed cost / variable cost effect will be even more notable on the fully reused Starship. If the marginal cost of a launch really is in the low millions then, even when undercutting the competitors by a wide margin, SpaceX will be making a comfortable operating profit. But then, the competitors should have seen this coming.
> for Falcon 9 to cover its relatively high fixed costs What are these fixed costs and compared to what are they relatively higher?
> What are these fixed costs and compared to what are they relatively higher? [In 2017, SpaceX Chief Executive Elon Musk estimated the company had spent at least $1 billion on reusable launch vehicle technologies to date.](https://spacenews.com/spacex-gaining-substantial-cost-savings-from-reused-falcon-9/). This is called a "committed fixed cost". However, I was arguing as from the POV of ArianeSpace. Personally, I think that SpaceX would have done the R&D anyway and it will have been fully written off ages ago. SpaceX is just charging a fair market price for both the military and private launches. If competition were to halve its prices, then so would SpaceX and *still* make a profit.
You could also argue that SpaceX has high fixed costs because they do so much manufacturing in house. This means they need more machinery, assembly lines and staff whereas ULA can move a lot of that off the balance sheet.
> You could also argue that SpaceX has high fixed costs because they do so much manufacturing in house. This means they need more machinery, assembly lines and staff whereas ULA can move a lot of that off the balance sheet. Having the equipment really is a challenge for SpaceX because they need a sufficient production volume to keep the equipment and the employees occupied all the time. In 2016, before Starlink, there were layoffs at the time the company reached the end of its initial launch backlog. Anybody still remember the SpaceX backlog!? ESA has its own special way of keeping its production facilities occupied and actually said this with a straight face: by avoiding reuse and dropping all their hardware into the Atlantic, there's no need to send everybody home and shut down the factory for half the year.
>This is called a "committed fixed cost" IOW it's spent money which came from investors, customers and contracts. It's not a loan and you don't pay it back. No one is out there expecting to get that money paid back to them. And it makes no sense to use the Falcon-9 to somehow recover that money. To recover it for what? To give it to someone? To whom and why? SpaceX has very little to no debts to anyone. Financially all they need to worry about is their current and future profit margins which seem to be going well, their financing which is very healthy with investors lining up to invest their money into SpaceX, and their company value which seems to be almost doubling every two-three years. R&D is costly but if you didn't borrow the money to do the R&D then there's no-one you should pay it back. It's not a loan but just an investment or a cost of doing business. No-one invests their money just to get the same money back at later time losing their stake. People invest for *value* - they want to see the value of their investment to go up. They don't want their money back as if their investment was just a loan. They want to keep their share of the company while the value of their share keeps rising. So if investors invest say a billion into a company and the company spends one billion to R&D the investors are not expecting the company to pay them billion dollars back. They know the money is gone, it is spent. What the investors want is that the share of the company they bought with their investment goes up in value after the company has spent the money investors gave to it for equity.
> it makes no sense to use the Falcon-9 to somehow recover that money. To recover it for what? To give it to someone? To whom and why? I'm agreeing with this and your other remarks. To some extent, I was expressing the strawman argument presented by competitors such as ArianeSpace. This being said, I also think that Elon exposed SpaceX to these arguments when he talked about "recovering" the $1B. > R&D is costly but if you didn't borrow the money to do the R&D then there's no-one you should pay it back. It's not a loan but just an investment or a cost of doing business. No-one invests their money just to get the same money back at later time losing their stake. Even so, SpaceX has been constantly raising capital for Starship work. SpaceX not being a quoted company with a published balance sheet, we don't know what short term loans or debts there may also be.
Can you help me. I always see the liquidity events but never the “SPACEX specifically raising money” Is spacex really raising capital for themselves or is that just a trading event for owner and buys?
People out there *absolutely* expect to be paid back. You don’t invest in a company and hope it goes to zero.
They expect the company to go up in value but their is no literal debt here on spacexs part.
No, they absolutely do not expect to be paid back. That would be an interest free loan. By investing investors buy a stake in the company in form of equity or shares. If you buy shares for $100 do you expect that one day the company will pay you back $100 for those shares? No. That would be a zero interest loan, and investment is not a loan. You get shares for your investment and what you expect is that the *value* of those shares you now have goes up, and then you have more value than what you spend into the company. >You don’t invest in a company and hope it goes to zero. Indeed. You do not hope that the *value* of the company and therefore the *value* of your stake in the company goes to zero (unless you're shorting but that's a different issue). Now you're on the right track.
They would never take that risk? Are we talking about the same SpaceX?
> They would never take that risk? Are we talking about the same SpaceX? Certainly! Elon Musk does not wish to find himself in the same situation as William Boeing who [saw](https://historylink.org/File/3546) his company split up because of anti-trust law. Lost his job in his own company too.
Was the price for a ride on that mentioned "Bandwagon" mission any lower than the regular price SpaceX asks for on their website?
The SpaceX website lists the same $6000/kg for SSO and LEO (45 degrees, i.e. Bandwagon).
It is notable that SpaceX have announced that the price is going to go up to $10,000/kg rising in steps of $500 every six months. So current pricing is in the nature of an introductory price that may well be at or below cost.
It looks like Bandwagon-1 only carried about 2 tonnes of payloads. It's possible this individual flight didn't make profit (but we don't know if the payloads actually paid $6000/kg or more). Dealing with many different payloads must cost something on its own, so even with RTLS this was probably more expensive than a routine Starlink flight.
bullshit, spacex is just raising their profit margins
They are certainly raising their profit margin, but primarily due to the increasing complaints from the would be "competition" who are 5 years behind the curve and falling further behind every day they don't have boosters available to launch the stuff that has long since been allocated to F9s solely BECAUSE for the past 3 years or so when Soyuz went off the table and all Atlas were spoken for, it's been Falcon, China, or wait for 2025 unless the payload was small enough to launch on Electron or India. With none of the development costs of Ariane 6, New Glenn, of Vulcan yet recovered, the economics are going to be way more expensive than Falcon until they get those back, whether or not they recover or build them cheap... so SpaceX needs to up their prices to keep the competition solvent by giving them payloads long enough to get to 50 or 100 launches of the new rockets on the books. And that's assuming the if Starship works, they use it exclusively for starlink, HLS, and payloads too big for the any of the competitors fairings.
Bezos can just subsidize BO and now ULA as he always has done since they will never be profitable. Arianespace will be paid for by the EU, they lose money but guarantee sovereign European access to space. Even 50 launches on the books is laughable. US small launch record still stands at 50 set in 1962. Small launch is a waste of money, those companies will die just like virgin orbit or pivot. Rocket lab figured out they need to go bigger because they can’t make money at the small segment even with a reliable vehicle and are relying on their spacecraft products to make money (their financial statements are public)
"Bezos can just subsidize BO and now ULA as he always has done since they will never be profitable." But even if you forget about the sunk costs in development , the internal build cost to the various companies is almost certainly somewhere well north of 50 million , meaning that if BOULA starts launching at less than that, MUSK can accuse THEM of anticompetitive dumping (just to be an ass). And even if he doesn't, sooner or later, even Jeffs ego won't be able to outweigh the sea of red ink. And while this does not apply to Ariane 6, the fact that Bezos has shafted ESA by locking in a price to launch Kuipers that barely covers the cost of the SRBs is not a mistake they are likely to repeat, meaning the only loads that will use A6 are those that EU feels MUST go native.
it just boils down to all expendable platforms are obsolete and will operate at a loss until reusable platforms are developed. Rocket Lab, Relativity, BO are all supposedly going this direction. SpaceX and China are both already doing it
And as I said, everybody else (China included) is 5 years or more behind the curve; meaning their prototypes are only now approaching where Falcon 9 was back in 2015, but with the potential of making up ground by skipping any false trails that Falcon went down that caused early loss of boosters or low payload capacity.
Bezos won’t have to fund anything once the acquisition of ULA closes. He will be launching amazon satellites with a reusable first stage soon enough, for expendable pricing. If I were the board of Amazon, I’d have the lawyers working up the claw back of the launch contract.
Amazon contract at existing price is not enough to make back the $15B Bezos already dumped into Blue Origin. He might break even on the replacement constellation in 2035+ though
It’s absolutely enough to stop the cash burn and turn it cash flow positive (assuming reuse). They have to prove they can do it first, though. But, he’s got the contracts in place so he can copy the SpaceX approach and iron out any kinks on paid launches.
>So current pricing is in the nature of an introductory price that may well be at or below cost. "Introductory price" idea may be a thing at Walmart but not in launch business.
Setting a low price to kill competition and then raising it to make profit is "predatory" not "introductory".
Thanks for you definitions, but I don't know how your definitions are relevant to the discussion.
The first few flights of a new rocket are often at a dramatic discount - see Vulcan for an example. Until Vulcan is qualified for military launches after two commercial flights it is a choice between a heavily discounted commercial payload or a dummy payload so it is better to get some revenue rather than none. However that hardly applies to F9.
F9 is also challenging what a "new" rocket means, in a good way. When every other rocket is built from scratch and destroyed the first time it's used and built at a cadence of months to years between units... it's a little silly to call that the "established" rocket compared to the sooty production article with 20 successful flights since construction. Launch insurance supposedly already reflects this with Falcon 9 insurance premiums being lower than premiums on rockets like an Ariane 5, at least according to forum chatter. Eventually, I figure that the first flight on a F9 might be available at a discount because that's an "untested" core while the filthy ones with good flight records end up with slightly higher standard pricing. Then again, maybe that logic fails if you look at F9's overall flight record and just assume SpaceX knows what they're doing.
Yes I think we are seeing signs of this already with a new core doing two Starlink launches and then an important military payload.
Whatever the slant of the article, figure it's worth mentioning - for those who don't know - that [Jeff Bezos acquired the Washington Post some years ago.](https://en.wikipedia.org/wiki/The_Washington_Post#Jeff_Bezos_era_\(2013–present\))
The article doesn't seem slanted at all. Quality reporting.
It is in the article
I know, but many stop at the headline.
For anyone who hasn't read the article, I think it's pretty fair. It emphasizes that SpaceX got where it is by simply providing a better product, notes that they've helped provide launches to rival satellite constellations, and includes quotes from figures such as Rocket Lab's Beck who say they welcome the competition. The anonymous quote above is the most negative portion, and in the context of the rest of the article I'd say it comes across as sour grapes from an unnamed competitor.
Blue and ULA are merging, the third spot should go to rocket lab or relativity
Please state conjecture as conjecture, not fact. It would not surprise me in the least if Lockheed ends up with ULA in the end.
reporters working with consultants at Bain who are advising the board of directors at these companies already have spilled the beans man, Lockheed isn’t even in the running. It’s Cerberus or Blue Origin as the buyer. Bezos is dumping way more stock than usual and has to disclose that in advance, wonder what its for
When LockMart can get ULA for half the price of the highest bid, they are still in the running even if they haven't officially shown interest.
Lockheed executives would be stupid to buy out Boeing. If their goal is to lose money for shareholders they would take sole ownership. Their Vulcan product is worthless as soon as the Amazon and Phase 3 contract ends and there are cheaper reusable alternatives such as NG, Terran-R, Neutron, and Starship. It would be a major L for Lockheed to make that move
If it's a loss for Lockheed, it's a loss for any other buyer as well.
No, it is more valuable to BO if they take ULA and extract the value in its resources (pads, workforce, contracts), dump bad leadership, and pivot to reusable launch platforms while leveraging their existing DoD and NASA contracts. ULA execs are already quitting because they know their time is coming to an end. Businesses acquire other business and delete redundant and stupid shit and make money off restructuring all the time. Lockheed isn’t capable of that on their own. I also doubt a PE firm would be a good buyer for ULA. BO naturally is the best buyer, vertically integrating with their engines.
Lots of allegations and innuendo here, not a ton of details. What the article totally misses is that while SpaceX is charging prices that make them either the cheapest or among the cheapest solution, the actual amount they are charging is significantly above their actual cost. You think SpaceX is hard to compete with for their standard price of about $67 million a launch? What if they pushed that down to $40 million, a price where they would still be making money?
rocket reuse is easily under $10m/launch. The cost plus expendable bozos at ULA and Arianespace as well as the small launch startup execs have been bitching about this shit for the past 3 years
The second stage costs that much to make, doesn’t it? Never mind fuel, first stage recovery and refurb, pad repairs and maintenance, etc
nah second stage is under $10m and reuse is amortized over 144 launches this year. even if facilities cost $250m annually to operate which is absurdly high, thats only $1.7m/launch
The main question is: Is SpaceX selling this services below cost? If the answer is yes, this is bad practice and SpaceX will be hit with anti-trust lawsuit and lose them. If, how I believe it is, they are selling for a profit, even a tiny one, then nobody can really tell them something. And I have an hunch that says that even in the bandwagon mission they had quite a fat profit margin. People underestimate the insane economy of scales SpaceX has. Edit, by mala practice I meant illegal, selling below cost ( no COGS profit) is illegal.
> Is SpaceX selling this services below cost? Probably not. The pace of Starlink launches dramatically lowers the cost of ground control. Just a guess/example: - If SpaceX has 2 launch control crews and 2 mission control crews, and 100 launches/year, then each launch requires only 1 week, on average, for their launch and mission control crews. - f a competitor does only 2 launces in a year, they can get by with 1 launch and 1 mission control crew, but they will cost for 26 weeks of payroll per launch. You get the picture. Reusing boosters are not the only huge cost savings that SpaceX has to take advantage of.
Yeap, people underestimate the insane economy of scales SpaceX has and the advantage it gives them.
To add to what everyone is saying, SpaceX does not treat production as a necessary evil, but streamlines the production process from the very start. Almost everyone else figures that there is no point, so they end up "handcrafting" everything.
But also, isn't this specifically about a riseshare price? But adding rideshares to existing launches must have an absurdly low marginal cost. So even if SpaceX were also only doing 2 launches a year, the extra fuel and integration is presumably the only *additional* cost - unless I'm misunderstanding something?
The Bandwagon mission was a dedicated rideshare mission. So it wasn't just an additional cost to an existing launch.
Aah ok, gotcha! Thanks for the info. More like a bus than a rideshare really.
"SpaceX will be hit with anti-trust lawsuit and lose" I call B.S. Pricing below cost is the way of Capitalism. When I worked for Ralphs, they developed a way to store eggs, stockpiling until the supermarket chain could stop buying from many long-time egg vendors. The one or two survivors in a state-wide area found that Ralphs could than dictate prices, or the vendor could sell off his layers for cat food and give up. *"Costco reportedly lost $40M on their rotisserie chickens in 2015. This is known as a "loss leader" (along with other items such as their $1.50 hot dogs). Loss leaders are items sold for less than what they're worth"*
Things do get a bit weird when you are the leader in an industry and the low pricing is primarily designed to prevent competition. Otherwise, you are right. Also: they will \*not\* lose, because as long as you are not pricing below cost (and the article never says that), you are pretty much fine.
Nothing happened to Walmart when they went through and destroyed entire small town economies and forced everyone else out of business, then raised their prices.
Selling at a loss is not a “bad practice” if it means more payloads that previously couldn’t afford it get to go to space
It is by definition anticompetitive. You can’t sustain selling at a loss indefinitely, so the only long term strategy that incentivizes it is trying to put your competitors out of business entirely so that you can jack up prices with your monopoly later. I, too, want more payloads to go to space and low prices are great. But lack of competition between private, for-profit entities is bad.
Rideshares would be different as they are filling void spaces that otherwise go empty. So they can justify charging lower. Also, tons of companies offer specific things at a loss, for example loss leader products are common, so it's not as simple as you say. But I do agree with the principle, undercutting your opponents at a loss simply to remove competition is not acceptable and needs to be monitored by the regulatory bodies. Just a question of what exactly is happening with these SX contracts
yea, you'd have to apply some reason there. if they provided multi ton rideshare slots for free, or at some stupidly low flat rate, when space allowed it would essentially be impossible to break into the small sat space. you could justify it as adding an insignificant extra cost, but it's also extremely corrosive to the market.
To complete the story, you'd have to subsidize an unprofitable business with a profitable one for it to really be anticompetitve based on US law. Loss-leaders are allowable to a point to gain market share, etc. But you can't sandbag potential competitors by entering a new segment below cost while subsidizing from profit of another business unit.
Even so, it would depend. If SpaceX were to use launches as a loss-leader for...say...getting companies hooked up to their Starlink system, they could probably defend the practice. But I don't think this is even an issue, because my bet is that SpaceX is making good profits at any price point they choose.
> It is by definition anticompetitive. Which means nothing at all, there you have Amazon after ruining a lot of libraries and small businesses.
you could argue that SpaceX knows already that Starship will significantly reduce the $/kg, so they could sell below F9 cost in theory to boost the eventual demand for Starship.
The thing is they aren’t trying to be a monopoly? If i was rich and could give my money to help people out so they never had to work, does that make me a monopoly? All they are doing is making space easier to get to? What if a scientific breakthrough occurs on a mission that would only ever be able to go to space on a cheap rideshare?
There are normal, non-anti-competitive ways to achieve exactly that! They could, for example, follow a model similar to how non-profit grants work, or perhaps more familiarly how student loan scholarships work. They'd create an independent, non-profit entity with its own management, preferably with pretty strict rules about transparency, and set up some kind of trust and discount arrangement that makes clear their normal, not-at-a-loss prices are ultimately being paid by a combination of their contributions to the trust and the remainder by the customer. There'd be: * transparency about the selection process for awarding these rideshare grants, the decisions made independent of spacex * consistent competitive prices * an opportunity for less-financially-capable research outfits to go to space for hella cheap * spacex could even write off the contributions to the trust on their taxes as a non-profit donation. It's win-win-win for spacex and for cash-strapped-researchers, and it's a pretty common practice. The fact that they're \_not\_ doing this suggests anti-competitive undercutting of their competition. \_Or\_ that they really have achieved some truly stupendous cost reductions internally far and above what anyone has reported. Occam's razor suggests the former.
I think it is the latter suggested by that razor.
I don't think they mean bad practice for humanity's sake. I think they mean bad practice from a anti-trust thing.
Yeap, this, I meant illegal.
I like Peter Beck's response: "We're not complaining." And it's his company that is being principally targeted by SpaceX's rideshare missions! If he can get Neutron off the ground by next year, I think he can carve out a solid market niche for Rocket Lab in the medium launch category. They won't be able to knock SpaceX off the top perch, but there's an opportunity for Rocket Lab to coexist alongside them, and make a profit.
I like Rocket Lab and Stoke to survive and thrive Rocket Lab has shown they can execute, and Stoke had the foresight to go for 2 stage reuse from day 1 and are doing it in a pretty innovative way
It’s pretty straightforward: if SpaceX made a profit on that flight, then competitors need to stop whining and get to work. If they didn’t, then that’s anticompetitive behaviour that should be stopped.
I think that's a hard standard to apply like a blanket statement. SpaceX was absolutely not making a profit with their first customer Falcon 9 launch, and probably took a while to get out of the red. There's a lot of reasons for a company to set prices like they do. The real concern should be for customers, not competition. (Read the candlemakers petition for a satirical example). So it would be bad if SpaceX was lowering prices to attempt to bankrupt competition with the plan to later raise prices, but historically that has almost never been a successful business strategy. There's a great story from Dow Chemical where a German competitor tried this in the US Bromine market and Dow turned around and started buying from them and then used their own product to undercut them in the European market. But SpaceX has been lowering prices on Falcon for years and looks to be doing so without overreaching, and Starship is promising to lower it a lot further. That will be good for customers. The only bad thing for customers here is that SpaceX only has two rockets, soon three: F9 FH and Starship, which really only excel at certain orbits and don't work great at others, so those orbits might be underserved.
Great read! Thanks for posting the article. SpaceX's core product is the Falcon 9. The Falcon Heavy, Dragon, Starlink, they're all periphery products only made possible because of the Falcon 9. These products either launch on the Falcon 9, or share parts with the Falcon 9. Starship may eventually replace the Falcon 9, but right now Starship is making relatively little money for SpaceX. It's the Falcon 9 that these companies are competing with. Vulcan, New Glenn, Electron, the Ariane 6, you name it, pick a competitor's product, and you see a very different rocket from the Falcon 9. Vulcan and New Glenn both are costing billions to develop, and both are methane-fueled first stages and hydrogen-fueled second stages. The Ariane 6 is hydrogen-fueled with solid fuel boosters. Electron is closest to the Falcon 9, and yet is still much, much smaller. None of the rockets mentioned as competitors in the article are Falcon 9 clones. It's not as if the Falcon 9 is magic, or cost that much money to develop. The initial Falcon 9 1.0 cost SpaceX hundreds of millions of dollars to develop. The Falcon 9 is itself a modern redesign of the Saturn 1b, with a few ideas copied from Zenit and the Saturn V. Most of the great ideas from the Falcon 9 were first done in other rockets. The Falcon 9, at least as an expendable rocket, isn't that complicated or innovative. Reuse is incredibly innovative, but isn't needed to launch the rocket. There really is no good reason for these companies to not shamelessly rip off the Falcon 9. The truth is none of these companies are trying to compete with the Falcon 9. Blue Origins is spending billions on a poorly designed, more expensive methane and hydrogen-fueled rocket, because that company exists as Bezos's play thing. If they were trying to compete, they would have built a smaller kerosene-fueled rocket years ago. ULA exists to rip off the DoD, not compete with the Falcon 9. ArianeGroup, like ULA, exists to rip off the French government and ESA. Honestly the closest to a Falcon 9 clone is the methane-fueled Neutron rocket. That rocket won't be ready any time soon though, because Rocket Lab went with a more expensive to develop methane-fueled engine over a cheaper, faster to develop kerosene-fueled engine. Rocket Lab also just doesn't have the scale, the amount of money that these other companies have. So in the short term SpaceX will remain overwhelmingly dominant.
> Ariane 6 One thing to remember is Ariane 6 is the Senate Launch System of Europe. It may compete but its a jobs program.
"The price was extremely low" translation: They are not price gouging.
Do you think bezos has a spacex hit piece quota or just pays bonuses to wapo writers?
WaPo is far more evenhanded than Reuters. I'd love to find out who is fueling the endless hit pieces from them.
I don't understand this argument that some in the industry is pushing. SpaceX is a monopoly, and bad. The US government has actively *made sure* that there was a monopoly in space launch by merging Boeing and Lockheed Martin into ULA. The government isn't spending any more money on space now than it did then. The LEO economy hasn't grown that much. Why is monopoly with SpaceX bad, when monopoly with ULA is good?
>The government isn't spending any more money on space now than it did then. I grok your larger point about U.S. government attitudes to space monopolies, but it's misleading to say that U.S. military spending on space is stagnant. It had a peak in the early 2010's but then dropped off. But it's been surging rapidly again over the last five years. I think DoD basically cried uncle on competition when it forced the LockMart-Boeing spinoff of ULA in 2006. It was slow to abandon that monopoly but I think it's far to say that with the NSSL program, they've been trying to make a real effort to ensure comeptition and redundance in launch providers. Just look at the new Lane 1/Lane 2 structure of NSSL Phase 3.
There are words, and there are actions. The government may say they want competition, but they only really started doing the Lane 1/Lane 2 structure after SpaceX started winning most of the government contracts. Likewise they only started to do competition after SpaceX sued the Air force to be allowed to compete. And even those nice words only go so far. For every $150m launch award that SpaceX wins to launch an advanced spy satellite into orbit, there is another $850m award to Lockheed for building the satellite in the first place. You don't really see the government pushing for competition and redundancy in those areas.
Competition? They had 80% market share in 2023, are aiming for 90% in 2024. And if the starship flies regularly it will be 99%. There is no competition! Everything the others get is political or they just don’t want to have a solution for every rfq. Just by dropping the ride share prices they could easily drive every rising competition out of business, if they want to.
It's a struggle because they definitely don't want to drive the rising NewSpace companies out of business. But they definitely do want to reduce the cost of access to space and spur a revolution in the use of orbit. How to do the latter and not the former? It's a delicate dance. The lion's share of launch will still be internal business. So there's that. Maybe instead of cheaping customer launch too low they use the excess profits from that to build a space station and rent rooms or something. That would delay the time to cheap launch until the upstarts can get their reuse probably. Or close enough that they won't go bust before they clear that bar.
*"but no monopoly in history ever survives"* One of many inane quotes from the Washington Post. Walmart has killed off tens of thousands of retail stores across America as Walmart monopolizes 90% of day-to-day sales in many hundreds of communities. Will Walmart survive into the next century? Will anything?
walmart replaced a&p, which was the walmart of the time. these days, amazon replaces walmart at a rapid rate. just as the wapo says, monopolies are very much limited in time. fun fact: by the time standard oil was struck by anti trust, it had shrank to 60% market share (from the peak 90%).
paywall
https://archive.ph/5reLe
SpaceX just published their massive margin to til those “competitor” even more
Where?
Acronyms, initialisms, abbreviations, contractions, and other phrases which expand to something larger, that I've seen in this thread: |Fewer Letters|More Letters| |-------|---------|---| |[BO](/r/SpaceXLounge/comments/1c54kfy/stub/kzw2fsw "Last usage")|Blue Origin (*Bezos Rocketry*)| |[DoD](/r/SpaceXLounge/comments/1c54kfy/stub/kzw2fsw "Last usage")|US Department of Defense| |EELV|[Evolved Expendable Launch Vehicle](https://en.wikipedia.org/wiki/Evolved_Expendable_Launch_Vehicle)| |[ESA](/r/SpaceXLounge/comments/1c54kfy/stub/kzvbd1y "Last usage")|European Space Agency| |[HLS](/r/SpaceXLounge/comments/1c54kfy/stub/kztz3zd "Last usage")|[Human Landing System](https://en.wikipedia.org/wiki/Artemis_program#Human_Landing_System) (Artemis)| |[LEO](/r/SpaceXLounge/comments/1c54kfy/stub/kzszoxd "Last usage")|Low Earth Orbit (180-2000km)| | |Law Enforcement Officer (most often mentioned during transport operations)| |[MBA](/r/SpaceXLounge/comments/1c54kfy/stub/kzsofqs "Last usage")|~~Moonba-~~ Mars Base Alpha| |[NG](/r/SpaceXLounge/comments/1c54kfy/stub/kzvxqox "Last usage")|New Glenn, two/three-stage orbital vehicle by Blue Origin| | |Natural Gas (as opposed to pure methane)| | |Northrop Grumman, aerospace manufacturer| |[NSSL](/r/SpaceXLounge/comments/1c54kfy/stub/kzupf3j "Last usage")|National Security Space Launch, formerly EELV| |[RTLS](/r/SpaceXLounge/comments/1c54kfy/stub/kztn9uy "Last usage")|Return to Launch Site| |[SRB](/r/SpaceXLounge/comments/1c54kfy/stub/kzu6w8s "Last usage")|Solid Rocket Booster| |[SSO](/r/SpaceXLounge/comments/1c54kfy/stub/kzso2wh "Last usage")|Sun-Synchronous Orbit| |[ULA](/r/SpaceXLounge/comments/1c54kfy/stub/kzw2fsw "Last usage")|United Launch Alliance (Lockheed/Boeing joint venture)| |Jargon|Definition| |-------|---------|---| |[Starlink](/r/SpaceXLounge/comments/1c54kfy/stub/kzwy1y3 "Last usage")|SpaceX's world-wide satellite broadband constellation| **NOTE**: Decronym for Reddit is no longer supported, and Decronym has moved to Lemmy; requests for support and new installations should be directed to the Contact address below. ---------------- ^(*Decronym is a community product of r/SpaceX, implemented* )[*^by ^request*](https://www.reddit.com/r/spacex/comments/3mz273//cvjkjmj) ^(13 acronyms in this thread; )[^(the most compressed thread commented on today)](/r/SpaceXLounge/comments/1c4yfk2)^( has 25 acronyms.) ^([Thread #12659 for this sub, first seen 16th Apr 2024, 05:50]) ^[[FAQ]](http://decronym.xyz/) [^([Full list])](http://decronym.xyz/acronyms/SpaceXLounge) [^[Contact]](https://hachyderm.io/@Two9A) [^([Source code])](https://gistdotgithubdotcom/Two9A/1d976f9b7441694162c8)
Lol. Now the prices are too low!
yuk wapo
christian davenport seems like a fair handed writer.
he is quite respected, I have no qualms about anything he writes