Point of view: Satellite images, cheap or expensive?

Point of view: Satellite images, cheap or expensive?

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Antonio Machado e Silva – AMS Kepler’s Director

One item that is always under discussion is the price of remote sensing satellite imagery. On the side of users, in general, the price is high. From the operators point of view, the price is low. Who is right?

The truth may lie with both sides. It is necessary to know that all commercial satellite systems are subsidized by governments. It can be done directly, as in the case of Brazil, China and India, where the space programs are carried forward by the governments of these countries, or it may be done indirectly, with private companies investing in the development of new technologies, but with governments ensuring the financial health of these companies with multimillion-dollar purchases.

Let”s do an exercise using the following assumptions:
• The lifetime of a high spatial resolution satellite is 7 years;
• The annual area that demands pictures with a sub meter resolution is 20 million km2 (one sixth of the continental area of the planet);
• 4 satellites to meet this demand coexist;
• The cost of developing and launching a sub meter satellite is 500 million dollars.

Following this reasoning, the average annual area to be covered by each satellite is 5 million km2, or 35 million km2 over the useful life of 7 years. To cover the cost of USD 500 million, the image’s km2 starts from the level of USD 14,29. Considering the costs, taxes and the international operator’s profit, besides the costs, taxes (including the remittance abroad) and the local distributor’s profit, it can be observed that prices in this market are very rational.

On the other hand, considering that the U.S. government enters into contracts that cover all the costs of development and launch of the satellite, the final price of the images could be lower.

Regardless of the analysis that will be done, whatever the image type, the user must always keep in mind the cost – benefit ratio. The more value he extract from the image, more advantage it will bring to him and more cheaper it will be. Therefore, some users may think that it is an expensive product, while others consider it at a good price.

The tip that we want to leave here is: share your image with other colleagues from your company. Maximize its use and make it cheap.

Source: Geodireito