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The future of the commercial satellite imagery business model

A couple of weeks ago, I was pointed to an article by Joe Morrison with the title “The Commercial Satellite Imagery Business Model is broken” (I will link it down below). Since already the title evoked all of my passion about this topic in me, I would like to share my opinion with you here.

In general, I have the feeling that our industry all too often reeks of uniformity and little innovation. Which sounds like a contradiction when you consider that we are so innovative that we can access a digital image almost anywhere in the world, at any time. That’s also what fascinated me so much at the beginning; the sheer amount of data we collect every day and all the exciting use cases that made the possibilities of using satellite data seem endless. Every day a new world opened up for me and I was fascinated by the idea that there is almost no industry that cannot benefit from Earth Observation Data, whether it is agriculture, telecommunications, urban planning, environmental protection or insurance. I was, and still am, so motivated and passionate to work on these use cases to bring the data we all sit on to the people.

Gradually, however, I realized that many of the use cases never went beyond theoretical case studies and that in many industries earth observation data was not yet used as intensively as I had imagined, and even that the majority of people in these industries had never heard of the possibility of using this data for their own purposes. It seemed that the exciting use cases remained exactly where they had been created: on the websites and brochures of the data providers.

This is, of course, a bit exaggerated, but it does reflect the mood I found myself in after some time.

Today, I can only repeat myself in saying that, if we want to win the commercial market,we have to act in a commercial way and we have to educate this market. That means we have to invest in Marketing tailored to the commercial market and we have to learn to speak their language in order to reach these customers. In order to achieve this, we need to talk to people and we need provide them adequate support, which can only be done on a personal level.

An Old Story Told In New Ways

Back then, at numerous conferences, I had the feeling that I was hearing the same thing over and over again (despite me being quite new in the industry), and that everyone only had the same thing to say. There was talk of new business models and how to make satellite data suitable for the mass market. One year later at the same conferences, there was talk of new, now old, business models and how to make satellite data suitable for the mass market. I found myself in the situation of passionately explaining to anyone I could find, that in our industry we cannot always think that we are special, because we are not. We are not the exception, we are the rule. This means that our business models and market mechanisms are not the exception either. They work in the same way as in other industries and they must evolve in the same way. If the rest of the world no longer wants to own and buy, but rather to share and borrow, and everyone wants to make all purchases of all services and products online via increasingly intuitive interfaces with just a few steps, then that is the way it is and we can’t make exceptions just because we trade with data from outer space.

Also Read: Three major trends that would foster geospatial imagery analytics market outlook

Let’s Talk About Change

Meanwhile I see them, the changes and the developments. We started talking about new business models, like time licenses for software and data, easy to use applications to access data or new algorithms. We are represented at conferences outside of our “geo-bubble” now and we initiate challenges and events to encourage users outside of the industry to work with geo data.

Admittedly, sometimes I have to squint my eyes and look very closely, but the changes are there. I think it’s like other industries that are mostly dominated by very big players. The big players don’t move that fast, especially not when the tried and true actually works. It is like the car industry, in which ten years ago, everyone shook their heads at the thought that one day a large number of people would be able to use mobility Nobody believed that either and it was an idea reserved for the rich or for technology lovers, but which would not be accessible to the mass market. In fact, many people would reject it on principle. Well, let’s look at where we are today… I look out the window and see a scooter or an electric car that I can rent all with the use of my app.

It took a while, but suddenly these new business models were there and this will also happen with satellite data! I definitely see us moving towards a sharing economy and pay per use models. I also think that the demand for real time data will only increase and that will require totally new applications and product delivery and access methods.

Yes, a large part of the industry is based on large customers from the defense sector and I am convinced that this will continue for a while, but there are small customers and the exciting use cases from a wide range of different industries and they are already there. We are seeing family owned wineries using the data to track the health and yield of their vintages, AEC professionals scouting new development sites or monitoring construction progress without leaving the office, wildlife researchers estimating endangered species population and tracking their breeding patterns, detection of new cities and living establishments in impoverished countries – the opportunities from satellite data are endless and don’t only begin and end with defense. There are startups that want to push new business models and make satellite data more accessible to these industries, with new pricing models, licensing models and access options and in the last two years alone a dozen such startups have emerged, development is taking place. Even the usual giants are now supporting some of these platforms and are slowly trying to find compromises, find strategies that allow steps towards new business models and new use cases. For the first time in a couple of years we are really dealing with platforms as a way to access satellite data, where the customer has access to data from different providers within the same interface. We are finally looking at how smaller areas can be sold profitably and how we can become more and more flexible with our parameters and pricing models. Yes, maybe it will take another 10 years until we actually distribute and license satellite data in a completely different way than today … but it is happening.

Also Read: Improved gravity data brings geospatial greatness

The Future is Coming

I don’t think the system is broken, I think it’s just starting to take shape. I can say that I’m lucky to work in a company where I see every day how customers from these new market segments in our industry are serviced. From small orders, customers who are completely remote from earth observation or for whom a lot of educational work and advice is needed and who are just the beginning of the development of new commercial target groups. I am proud to work in a company that sees this potential and has a customer support team that personally takes care of every single customer and every single use case. It doesn’t matter if the actual value of this target group can be measured with that of the Defense and Intelligence segment, it is about seeing enough potential in a new market segment and investing in these future business models and use cases, whether monetary or temporary.

And yes, I think you can measure the market by its potential and not always only by the current value of the market segments. That is what it takes to mobilize for change and to shift priorities slowly… you need potential that you can see. You can’t compare every new emerging, innovative industry and every new market segment to be explored with the core market segment that has existed since the beginning.

Of course, the processes are longer in the big companies and the mills grind slower but that’s exactly what we need the startups for, the ones with the crazy ideas, the revolutionary ones, the ones that spur and challenge.

I wish for more open discourse, more courage to express controversial opinions and perhaps absurd ideas. And as you told Joe at the beginning, over the past two decades, commercially available satellite imagery has evolved from an absurd aspiration to a mature industry.

Also Read: 5 trends influencing growth prospects of mobile satellite services market

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