Russia cuts Proton price to match SpaceX
Capitalism in space: Dmitry Rogozin, the head of Roscosmos, yesterday said that Russia will cut costs so that the price they charge for a Proton launch will match SpaceX.
Russia is struggling to regain its Proton customer base after the launch failures of the past few years. I don’t think matching SpaceX’s prices will do it. Right now satellite companies view them as offering a less reliable product, and until they can prove this impression false they need to offer their rocket for even less that SpaceX.
This is in fact what SpaceX did at the beginning. Its rockets were untested and thus risky to use. To compensate they offered a cheaper way to space. Now Russia has to do the same, or the business will continue to go to others. I wonder if Rogozin understands this.
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Capitalism in space: Dmitry Rogozin, the head of Roscosmos, yesterday said that Russia will cut costs so that the price they charge for a Proton launch will match SpaceX.
Russia is struggling to regain its Proton customer base after the launch failures of the past few years. I don’t think matching SpaceX’s prices will do it. Right now satellite companies view them as offering a less reliable product, and until they can prove this impression false they need to offer their rocket for even less that SpaceX.
This is in fact what SpaceX did at the beginning. Its rockets were untested and thus risky to use. To compensate they offered a cheaper way to space. Now Russia has to do the same, or the business will continue to go to others. I wonder if Rogozin understands this.
The support of my readers through the years has given me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Four years ago, just before the 2020 election I wrote that Joe Biden's mental health was suspect. Only in this year has the propaganda mainstream media decided to recognize that basic fact.
Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Even today NASA and Congress refuse to recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
Please consider supporting my work here at Behind the Black.
You can support me either by giving a one-time contribution or a regular subscription. There are five ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
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This is the beginning of the end for SpaceX. Roscosmos is a government entity so price is no object. While a firm that loses money on every launch will sooner or later go out of business, in its case more government money gets pumped back in. Yes, I know that’s a boon for the customers – Russian taxpayers end up subsidizing their launches – but no private entity can compete against a country’s resources. Remedies – 1) The WTO (slow and liable to cheating by Russia) 2) Sanctions (forbid any US firms or firms wanting to do business in the US or with US based firms from using Roscosmos)
Col Beausabre, Remedy 3, become even more competitive. SpaceX knew going into this market that the majority of their competition is government owned/controlled entities. Also, I doubt they were naive to believe the market wouldn’t respond in some manner to their lower prices and not have contingency plans in place.
In the end, this will force SpaceX to become even more competitive. Something which they have demonstrated great skill at and will be good for the market overall. Even with the price cuts, the burden seems to be on Roscosmos to prove that they can deliver “reliable” Proton launches at the reduced costs.
I believe the bigger threat to SpaceX is that the market may simply not respond as fast to lower launch costs (ie. grow faster) than they anticipated. If there were clear signs the launch market was growing faster, anti-competitive practices such as this would be less significant.
This is the beginning of the end for SpaceX. Roscosmos is a government entity so price is no object.
Rockets that fail will find no market, regardless of price.
There is also the point that in the black economy of Russia, outside of official budgets, ROSCOSMOS has actually been a supplier of funds, through corruption, to those who are Putin vassals.
In order to cut its Proton prices, ROSCOSMOS will have to end that flow to Putin’s Oligarchs. Whether this can first be done is unknown. Whether it can be sustained without the loss of those oligarchs from Putin’s supporters remains deeply in doubt.
Col Beausabre wrote: “This is the beginning of the end for SpaceX. Roscosmos is a government entity so price is no object.”
I think the opposite is the case. This is another sign that Roscosmos and some or many of its rockets are in serious trouble. With the pricing being the same, SpaceX’s Falcon 9 is the preferred rocket. Even if the price of Proton is further reduced, only customers with redundant payloads (e.g. constellations that can afford to lose a satellite or so without greatly affecting their business plan) are likely to risk a Proton launch. This was seen with Falcon 9 and the Air Force launching GPS satellites in the early days; there were enough of these satellites that they could lose one and still build their replacement constellation.
ULA, on the other hand, has a very strong reliability record. This reliability has been high in their marketing strategy. Although they have worked hard to reduce their launch prices, they have not felt compelled to try to match SpaceX prices, yet they do not fear that they are going out of business.
Russia is losing not just the launches but the only source of profit they have a hope of keeping.
The US Astronaut deliveries.
The 400 million from that alone kept them flying.
They will need at least half a billion a year to replace the cash America gave them.
They will never make that up in volume. They can not even afford that on their own economy. You can not just print the cash and hope, even in a communist state. Inflation will happen.
This is like Germany giving away the Trabant just to keep the factory open. Even if people accepted them they would never go any buy the next one.