A flourishing decentralised market

As the quality of satellite images continues to improve and they become ever more readily available, the current proliferation of satellite imagery applications presents a golden opportunity for Small and Medium-sized Enterprises (SMEs).

©ESA Europeans are space industry leaders, with a 40 % share in the world’s satellite construction, launch and operation market. Here you see Ariane V lifting off and preparatory work for the flight.

Earth observation started as a huge scientific and technological venture but, over the years, it has become a major economic sector.

The primary Earth observation functions of satellite operation, in-orbit control and management, as well as data reception and delivery, all create highly skilled jobs.

Downstream marketing of this data by major operators and their sales agents, together with a host of service companies, adds considerably to its value. Not to mention the direct impact of Earth observation applications (such as weather forecasting) on all other human activities on land, at sea and in the air.

Data marketing

It is costly to buy satellite imagery. Before it can deliver images, a satellite first has to be designed, built, launched and then operated for many years. More often than not, it is the customer who picks up the bill. And those wishing to buy data from Earth observation satellites usually need to dig deep into their pockets!

There are a number of commercial operators on the market. For instance, Spot Image sells data from its own satellites, as well as Earth images from satellites that the company manages on behalf of others (Envisat, ERS, Radarsat, etc.).

Two of the other leading world operators are DigitalGlobe and Geo Eye. These companies offer the most accurate images on the market. Their high-resolution data is provided by DigitalGlobe’s Quickbird satellite (60-centimetre resolution) and Geo Eye’s Ikonos satellite (one-metre resolution).

Totting up the bill

At DMC International Imaging, the bill depends on the size of the ‘area of interest’ of the requested image. The minimum price for one 160 km2 image with 32-metre resolution, requiring three satellite passes, is € 2 240. In addition, DMC charges a flat fee of € 614 to cover the costs of satellite parameterisation Spot Image offers its standard Spot-5 colour photos of minimum 60 km2 with 2.5-metre resolution for € 8 900, to which it adds a priority programming fee of € 3 100.

The European distributor, Eurimage, sells very high definition images, such as Quickbird satellite images, at a price of US$ 25 per square kilometre. The minimum price is for a full satellite imagery ‘scene’ or surface area of 272 km2, i.e. around € 5 300 per image, and virtually double that for urgent orders.

Custom-made by ESA

Specific rules govern the sale of the gigabytes of data produced by the ten scientific instruments of ESA’s Envisat scientific satellite every week. In fact, the rules were adopted even before the satellite was launched.

“The rules were decided by the Member States that financed the mission,” explains Simonetta Cheli, head of public and institutional relations at ESA-ESRIN in Italy. “Three user categories have been defined. The first category includes scientists who are given free access to Envisat data once their research project has passed a peer review by the various committees. Users in the second category, which tend to be public institutions, pay a small user fee for data access. The third category is for all other users, who have to go through commercial operators and pay the market price to gain access to Envisat data.”

Market prices vary depending on how ‘fresh’ the image is. For instance, it costs € 400 for a radar image from the ERS or ASAR (Envisat) archive, covering a 100 km2 area with 25-metre resolution. However, the price rises to € 600 to place an order for the same image (requiring the satellite to be programmed). On the other hand, it only costs € 150 if all you want is a ground resolution of 150 metres.

Looking forward, Simonetta Cheli notes that “The commercial policy for our future missions, such as the GMES programme’s Sentinels, has yet to be defined.”



An SME-centred ‘local’ industry


As there is not much of a market for raw satellite data, a host of companies offer services to add value to raw images.

In 2004, ESA, in conjunction with two consultants (Vega group and Booz Allen Hamilton), conducted a survey of European and Canadian firms specialised in the field. The survey report revealed that there are some 160 specialist companies. Many of them are SMEs: 33 % of the companies in the sector have fewer than 10 employees; 27% have between 11 and 30 employees, and 15 % between 31 and 60 employees. Only 9% have more than 500 employees.

According to the report, the sector’s estimated total turnover in 2002 was € 285 million – which does not include the sale of primary data (raw images).

The report also revealed that it is essentially a ‘domestic’ market, with companies in the sector making the bulk of their turnover from customers in their own region or country. The report states that “markets outside Europe are a small part (15 %) of the typical customer base for European value-adding companies.” Most of the revenues come from services for identifying Earth’s natural resources, cartography and security applications.

Source: The State and Health of the European and Canadian EO Service Industry, ESA/Vega group & Booz Allen Hamilton.

A turnkey satellite?


What about major satellite imagery users being able to buy their own observation microsatellite complete with a home data-reception system? In Europe, the Proba (Project for On-Board Autonomy) microsatellite, originally designed as an ESA technology demonstrator, is now a fully-fledged commercial product. An industrial consortium is now offering Proba as a complete package, including the satellite, launch and associated ground system. This is a European industry success story of interest to non-European countries that do not yet have an Earth observation capability.

Europe’s powerful space industry

Monument Valley View of Monument Valley in the Navajo Indian reservation on the border between Arizona and Utah from the small Belgian Proba satellite.

In 2005, Europe’s space industry recorded a turnover of € 4.4 billion and employed 28 000 people.
According to European Commission estimates, the economic activity which the space industry creates downstream is five times this figure. Despite relatively low public investment in the sector, Europe’s space industry is extremely competitive and holds a 40 % share of the world’s satellite construction, launch and operation market.