The Commercial Satellite Imagery Business Model is Broken

Photo by Josh Spires (dronenr) on Unsplash

The Curse of the Consummate Customer

Maxar is the largest commercial satellite imagery vendor in the United States, and probably the largest imagery-focused company in the world. Like a twin absorbing all of the nutrients in the womb, Maxar (“DigitalGlobe” at the time) devoured its rival, GeoEye, in the Great Merger of 2012™ after the Federal government decided not to renew GeoEye’s major contract with the National Geospatial Intelligence Agency (NGA). After a decade of DoD-funded innovation following the events of 9/11, the burgeoning Earth observation industry was reduced to one monopolistic vendor serving one monopolistic customer.

A very scientific chart courtesy of the Morrison Institute for Thought Leadership™

The Innovator’s Dilemma

In 2013, while DigitalGlobe and GeoEye were still in the honeymoon phase after their shotgun wedding, Planet Labs was launching its first satellite. They promised to be different. Planet spoke of a lofty “Mission 1” to image the entire landmass of the Earth once a day, every day. They evoked a sense of wonder and opportunity — what would be possible if we could take a daily pulse of all human and geological activity?

To the Satellite Companies: You Have a Choice

If you’re reading this and you work at a satellite provider: you have a cool job. You work on undeniably meaningful technology with profound influence on the way the world operates. If you don’t love your job, it’s almost certainly a failure of management or of imagination. You’re sitting on one of the greatest underutilized digital assets in history. The archival data from the WorldView satellites alone is capable of unlocking untold billions in value for climate science, humanitarian aid, navigation, urban planning, small landholder agriculture, public health, and a host of other unprofitable and fantastically important industries. If you aren’t advocating for making it easier for people to afford, access, and exploit your data, then it’s time to start.

  1. “Internal use only” licensing is restrictive enough that it should be dirt cheap. Multi-use licensing with a restricted number of affiliates is a little better, but it’s not materially different than internal use only, it just widens the aperture of what’s considered “internal.” Create a standard pricing structure and license for use cases where the customer wants to turn around and give the imagery away or do whatever they want with it. Think of it like paying to openly license the data.² Just figure out a price and then lower it, because you aren’t making much from all that data gathering dust on on your cloud servers (which cost you millions of dollars each month to maintain anyway).

Miracles Happen

This industry is so young, it would be ridiculous to claim it’s too set in its ways to change. I’m not a cynic. In fact, I’m more hopeful than ever about the potential of satellite imagery to positively impact the world. But the satellite imagery companies need to meet the startups and research groups clamoring for their data halfway. The drone industry is currently going through a period of collapse after realizing adoption will take longer to happen than expected; they got stuck dying the long, slow death by prototypes and proofs of concept that we all dread. The satellite imagery ecosystem could easily go through a similar contraction if we keep going the way we’re going. It’s great that you have the government as an anchor client — use that as a foundation to take bigger bets rather than as a weight tying you to the floor.



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Joe Morrison

Joe Morrison

Comedic relief at Umbra. Writing about maps and the people that make them. For inquiries: jrmorrison.jrm [at] gmail [dot] com