4 ms·

This is similar to Netflix running on AWS and Amazon being a direct competitor. It could work.

SeanAnderson 3y ago
Okay, I see your point, but the scenario here is the inverse of Netflix/AWS, right? Netflix takes the world by storm, grows quickly, and becomes reliant on AWS. Amazon enters the video streaming market as a much weaker competitor and builds upon their own tooling. In this scenario, I presume Amazon is making more money from Netflix using their service than they are from running their own streaming service. Their first goal is to not disrupt the money they make from Netflix and their second goal is to create a competitor. Later, if the math says that hardening their contracts to the detriment of Netflix would allow them to capture such market share as to recoup the investment with their own streaming service, they would do so, but as they're late to the party that is not the case. In the Starlink scenario, it's the other way around. Starlink is already dominating the market using their own, SpaceX tooling. The incumbent, AST SpaceMobile, is allowed to use SpaceX rockets. It's not hard for SpaceX to disrupt AST SpaceMobile's operations without hurting SpaceX's bottom line as there's a backlog of launch demand to replace AST SpaceMobile. If the math says that AST SpaceMobile is likely to begin encroaching on Starlink then they deny a contract, replace it with the next person in line, and don't bat an eye. The order in which things occurred between the companies means there aren't these deeply entangled, mutual benefits that allow competitors to coexist.
- ethbr1 3y ago
  > If the math says that AST SpaceMobile is likely to begin encroaching on Starlink then they deny a contract, replace it with the next person in line, and don't bat an eye. This is where the Netflix/AWS analogy is a good one. The critical point is: AWS makes more money from people not-Netflix than Amazon Video makes. Consequently, AWS screwing with Netflix for the benefit of Amazon Video risks the entire not-Netflix AWS customer base, who would no longer consider Amazon as neutral of a party and thus trim their AWS spend. And these optics last for decades. Which is why most companies in these scenarios have serious firewalls between those parts of the conglomerate. No sense killing the golden goose because some VP wants a bonus. If AST (or Amazon Video in the analogy) can compete with Starlink (or Netflix) on even terms, then more power to them. If not? Then that's their problem: rest of the company isn't going to bail them out.
  - simfree 3y ago
    This is inaccurate, Netflix doesn't deliver video via AWS due to the extreme cost of bandwidth on AWS compared to even paid peering, nevermind settlement free peering.
    - ethbr1 3y ago
      It's not just screwing with video streams. https://aws.amazon.com/solutions/case-studies/innovators/netflix/ https://aws.amazon.com/solutions/case-studies/innovators/net... "Turns out we can't give you our preferred rate because you compete with Amazon Video" would be equally short-term-effective / long-term-suicide.
- pfannkuchen 3y ago
  That does smell anticompetitive though, which SpaceX may strategically want to avoid. They could in the future end up being seen as a monopoly in several different areas.
  - lucubratory 3y ago
    SpaceX is already functionally a monopoly at 92% of Western launches with the remaining 8% being heavily subsidised holdouts or VC-subsidised challengers. I strongly, strongly doubt SpaceX will ever face any regulatory scrutiny over that monopoly status in a location where it matters (the US), because SpaceX is the entire reason that the US is currently outcompeting China in space. The US isn't going to fuck with their golden goose, and they don't care if that really sucks for Arianespace et al. The EU could go after SpaceX for antitrust reasons, but SpaceX doesn't have European offices so they can just say no and not do business with the EU. SpaceX can afford to lose European commercial launches, the EU would lose access to by far the cheapest way to get into space (which they might do, to be clear, because getting into space is great but not critical for them). SpaceX isn't a company like Microsoft where they have a lot of employees in EU jurisdiction and need to do business with the EU for their business to be healthy.
    - panick21_ 3y ago
      > The EU could go after SpaceX for antitrust reasons They talked about taking SpaceX to WTO before. But that's it. Talk. The reality is that they know they would lose horrible if anybody ever analyzed how 'fair' the markets actually are. > SpaceX is already functionally a monopoly at 92% That's a questionable look at numbers. A lot of that is SpaceX own launches, not competitive. Different other parts are DoD and NASA that have a 2 provider minimum already. For commercial payloads you have other companies coming online soon. Costumes have orders, currently Vulcane, New Glenn, Terran R, Ariane 6, Neutron all have a book of future orders already secured.
- toast0 3y ago
  Is SpaceX not a common carrier, like all of the other delivery companies? They've got a big price advantage, but if they start pulling anti-competitive stuff like disfavoring launches by a competitor, that's going to get them a lot of attention.
- jbc1 3y ago
  The only option for AST expanding isn't just competing for Starlink's customers. There's also growing the market as a whole. Satellite internet is still a tiny market so there's a lot of potential there. It's entirely possible for there to be more money in providing launch services to AST even if it kills off Starlink, IF it grows the market enough.
glohbalrob 3y ago
They are using AWS for the cheap part, the content and rights is far more expensive. You think it costs 50M to stream a 2 hour show for millions of people, or the production of said show/movie?

Okay, I see your point, but the scenario here is the inverse of Netflix/AWS, right? Netflix takes the world by storm, grows quickly, and becomes reliant on AWS. Amazon enters the video streaming market as a much weaker competitor and builds upon their own tooling. In this scenario, I presume Amazon is making more money from Netflix using their service than they are from running their own streaming service. Their first goal is to not disrupt the money they make from Netflix and their second goal is to create a competitor. Later, if the math says that hardening their contracts to the detriment of Netflix would allow them to capture such market share as to recoup the investment with their own streaming service, they would do so, but as they're late to the party that is not the case. In the Starlink scenario, it's the other way around. Starlink is already dominating the market using their own, SpaceX tooling. The incumbent, AST SpaceMobile, is allowed to use SpaceX rockets. It's not hard for SpaceX to disrupt AST SpaceMobile's operations without hurting SpaceX's bottom line as there's a backlog of launch demand to replace AST SpaceMobile. If the math says that AST SpaceMobile is likely to begin encroaching on Starlink then they deny a contract, replace it with the next person in line, and don't bat an eye. The order in which things occurred between the companies means there aren't these deeply entangled, mutual benefits that allow competitors to coexist.

ethbr1 3y ago
> If the math says that AST SpaceMobile is likely to begin encroaching on Starlink then they deny a contract, replace it with the next person in line, and don't bat an eye. This is where the Netflix/AWS analogy is a good one. The critical point is: AWS makes more money from people not-Netflix than Amazon Video makes. Consequently, AWS screwing with Netflix for the benefit of Amazon Video risks the entire not-Netflix AWS customer base, who would no longer consider Amazon as neutral of a party and thus trim their AWS spend. And these optics last for decades. Which is why most companies in these scenarios have serious firewalls between those parts of the conglomerate. No sense killing the golden goose because some VP wants a bonus. If AST (or Amazon Video in the analogy) can compete with Starlink (or Netflix) on even terms, then more power to them. If not? Then that's their problem: rest of the company isn't going to bail them out.
- simfree 3y ago
  This is inaccurate, Netflix doesn't deliver video via AWS due to the extreme cost of bandwidth on AWS compared to even paid peering, nevermind settlement free peering.
  - ethbr1 3y ago
    It's not just screwing with video streams. https://aws.amazon.com/solutions/case-studies/innovators/netflix/ https://aws.amazon.com/solutions/case-studies/innovators/net... "Turns out we can't give you our preferred rate because you compete with Amazon Video" would be equally short-term-effective / long-term-suicide.
pfannkuchen 3y ago
That does smell anticompetitive though, which SpaceX may strategically want to avoid. They could in the future end up being seen as a monopoly in several different areas.
- lucubratory 3y ago
  SpaceX is already functionally a monopoly at 92% of Western launches with the remaining 8% being heavily subsidised holdouts or VC-subsidised challengers. I strongly, strongly doubt SpaceX will ever face any regulatory scrutiny over that monopoly status in a location where it matters (the US), because SpaceX is the entire reason that the US is currently outcompeting China in space. The US isn't going to fuck with their golden goose, and they don't care if that really sucks for Arianespace et al. The EU could go after SpaceX for antitrust reasons, but SpaceX doesn't have European offices so they can just say no and not do business with the EU. SpaceX can afford to lose European commercial launches, the EU would lose access to by far the cheapest way to get into space (which they might do, to be clear, because getting into space is great but not critical for them). SpaceX isn't a company like Microsoft where they have a lot of employees in EU jurisdiction and need to do business with the EU for their business to be healthy.
  - panick21_ 3y ago
    > The EU could go after SpaceX for antitrust reasons They talked about taking SpaceX to WTO before. But that's it. Talk. The reality is that they know they would lose horrible if anybody ever analyzed how 'fair' the markets actually are. > SpaceX is already functionally a monopoly at 92% That's a questionable look at numbers. A lot of that is SpaceX own launches, not competitive. Different other parts are DoD and NASA that have a 2 provider minimum already. For commercial payloads you have other companies coming online soon. Costumes have orders, currently Vulcane, New Glenn, Terran R, Ariane 6, Neutron all have a book of future orders already secured.
toast0 3y ago
Is SpaceX not a common carrier, like all of the other delivery companies? They've got a big price advantage, but if they start pulling anti-competitive stuff like disfavoring launches by a competitor, that's going to get them a lot of attention.
jbc1 3y ago
The only option for AST expanding isn't just competing for Starlink's customers. There's also growing the market as a whole. Satellite internet is still a tiny market so there's a lot of potential there. It's entirely possible for there to be more money in providing launch services to AST even if it kills off Starlink, IF it grows the market enough.

glohbalrob 3y ago

They are using AWS for the cheap part, the content and rights is far more expensive. You think it costs 50M to stream a 2 hour show for millions of people, or the production of said show/movie?