103. Satellites

Summary

Podcast Summary

Podcast: The Economics of Everyday Things
Episode: 103. Satellites
Host: Zachary Crockett (Freakonomics Network)
Release Date: August 18, 2025

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Overview

In this episode, Zachary Crockett dives into the world of satellites—those enigmatic machines orbiting high above Earth that power everything from cruises and farming to streaming Netflix. He traces the history, economics, and technological transformation of the satellite industry, exploring the shift from giant, expensive geostationary satellites to the new low-cost, mass-produced Low Earth Orbit (LEO) satellites dominating today’s market. Featuring key insights from Rachel Jewett (Managing Editor, Via Satellite) and a seasoned Satellite Industry Expert (Tim Ferrer, President of TMF Associates), the episode unpacks how satellite innovation is reshaping global communications and the risks it creates.

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Key Discussion Points & Insights

1. Satellites in Daily Life

• Satellites have become essential but invisible infrastructure for modern life.
  • “People have no idea how much of their daily life is touched by satellites.” – Rachel Jewett (01:20)
  • Use cases: cruise ships, John Deere tractors, government operations, apps with GPS (Uber, DoorDash), weather forecasts, broadcast TV. (01:34–01:56)
• Massive industry:
  • The satellite industry is valued at $293 billion, comprising a significant share of the global space economy. (02:08)

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2. From Sputnik to Streaming: The Evolution of Satellites

• Historical timeline:
  • Sputnik in 1957 as the first artificial satellite—a radio-spitting marvel for the Cold War era. (03:29)
  • Early commercial breakthroughs: TV signal transmission (Olympic Games in the 1960s). (03:53)
  • Expansion into broadband on planes, ships, and remote locations. (04:17)
• How satellites work:
  • Anatomy: “A satellite is either a box or a cylinder”; solar arrays for power, a dish for Earth-facing signals. (04:49)
  • Data relay via ground stations (“gateways”). (05:15)
  • Real-world example: how Netflix content transits via satellites for remote locations. (05:39)

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3. Modern Uses Beyond Communication

• Imaging & Data:
  • Satellites help Wall Street monitor energy infrastructure or global asset tracking. (06:19)
  • Wildfire detection and Earth observation are emerging applications. (06:39)
• Global Positioning (GPS):
  • U.S. GPS is free and government-owned—only about 30 satellites provide service, but specialized equipment improves positioning for industries like agriculture. (06:53, 07:18)

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4. The Economics of Satellite Manufacturing and Operation

Geostationary Satellites ("GeoSats")

• Characteristics:
  • School-bus sized; sit 22,000 miles above Earth; appear stationary to ground receivers. (07:33–07:45)
  • Essential for mass broadcasting (satellite TV). (07:45)
• Manufacturing:
  • Historically made by car companies (Ford Aerospace, General Motors). Now: Boeing, Lockheed Martin, Airbus, Thales Alenia. (08:24–08:43)
  • Time-consuming, expensive (up to $500 million). Extensive testing: “You put it in a thermal vacuum chamber… shake it around… check everything stays connected.” (08:54–09:05)
• Regulation:
  • Governed by International Telecommunications Union (ITU) and national bodies (like the FCC); spectrum allocation is critical. (09:35–10:34)
• Launch:
  • Outsourced, notably to SpaceX ($60M+ per launch). (10:47)
• Business Model:
  • Satellite operators lease capacity to broadcasters, governments, telecoms, and airlines. Long-term contracts are standard. (11:22)
  • Revenue: Each megabit/second can fetch hundreds of dollars/month. A single satellite may deliver up to one million megabits/second. (11:42)
• Return on Investment:
  • Typical satellite lifespan: 15–20 years. The operator is under pressure to recover the ~$500M investment through data sales. “If you spent five or six hundred million dollars on a satellite, you'd hope to get back… as much as $100 million a year…” (12:04)

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5. Disruption: The Rise of Low Earth Orbit (LEO) Satellites

Why the Shift?

• Changing consumption:
  • “There’s not as many geostationary satellites being ordered because… we get our TV services from streaming... You have to have thousands of satellites to carry all that traffic…” – Satellite Industry Expert (16:48)
• LEOs explained:
  • Orbit as low as 300 miles, zip around Earth every 90 minutes at 17,500 mph; must be deployed in large constellations for continuous coverage. (17:12–17:44)
  • Smaller in size (shoebox to tabletop), shorter lifespans, "game of scale." (17:44)

Starlink’s Mass-Production Model

• SpaceX/Starlink dominates:
  • Over 8,000 satellites in orbit. Starlink accounts for more than two-thirds of all operational satellites. (18:14, 18:34)
• Cheaper, faster manufacturing:
  • Satellites produced daily for under $500,000 each (compared to $100–500 million for geostationary). Quality testing replaced by "if it survives the truck ride, it's good to go":
    • “They stick it on the back of a FedEx, send it off to the launch station…and if something’s going to fall off, it will fall off.” – Satellite Industry Expert (18:56)
• Vertical integration as superpower:
  • SpaceX builds and launches its own satellites, reducing costs to perhaps $20–$25 million per launch internally, versus $60 million charged to outsiders. (20:00)
  • Stackable satellites: “Starlink...big, flat rectangle. Starlink satellites are stacked one on top of another, 20 to 30 satellites or more on a rocket." (20:23)
• Disruptive unit economics:
  • Launch cost for each satellite: under $1M. Total cost to build and launch a Starlink satellite, about $2M, compared to $600M for a traditional geostationary with only 10 times the capacity. (20:23)

Business Model and Competition

• Starlink sales:
  • Internet plans from $80 (residential) to thousands (commercial). About 6 million current users, with capacity for 10–20 million. (21:11–21:22)
• Emerging challengers:
  • OneWeb (600+ LEOs), Amazon’s planned Project Kuiper (3,200 satellites), Planet Labs, AST Space Mobile. (21:41)

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6. The Downside: Shorter Lifespans and Growing Debris Risk

• Durability limits:
  • “Cosmic radiation is quite intense… that can send a satellite out of control and kill it..." (22:17)
  • Batteries degrade due to frequent dark/light cycles; result: 5–10 year lifespan for LEOs. (22:17–22:51)
  • Most common cause of death: Running out of maneuvering fuel. (22:46)
• End-of-life options:
  • Mission extension vehicles (space "tow trucks") can prolong GEOsat life at high cost; not viable for cheap, short-lived LEOs. (23:16–23:53)
• Risk of crowded space and Kessler Syndrome:
  • “Some people say… we just need the right traffic management system. But then some people are concerned it is getting quite crowded. If two satellites collide, they create debris… that’s a worst case scenario..." – Rachel Jewett (24:17)
  • Explanation of Kessler Syndrome: Collisions create debris that triggers cascades of further collisions, threatening usability of low Earth orbit. (24:36)
  • Example: A major satellite collision 15 years ago with a defunct Russian spacecraft. (25:02)
• Mitigation:
  • Strict rules now require LEOs to deorbit & burn up, while geostationary satellites are sent to a "graveyard orbit". (25:25–25:43)

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7. The Benefit—And the Balancing Act

• Societal value:
  • Satellites remain crucial: “It’s improving agriculture, or bringing connectivity to areas that have never had it before, making…search and rescue as possible. What we’re really talking about is making stuff possible here on Earth. That’s what I think is really cool.” – Rachel Jewett (25:52)
• A memorable analogy:
  • “In some ways, it's been a bit like the airline industry. You know, how do you make a million dollars? You start with a billion dollars.” – Satellite Industry Expert (26:53)

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Notable Quotes

• Rachel Jewett:

  • “People have no idea how much of their daily life is touched by satellites.” (01:20)
  • “Some people say that there's plenty of space in space. We just need the right traffic management system. But then some people are concerned that it is getting quite crowded...that’s a worst case scenario fear that people talk about.” (24:17)
  • “What we’re really talking about is making stuff possible here on Earth. That’s what I think is really cool.” (25:52)

• Satellite Industry Expert:

  • “In the traditional model, you're building one geostationary satellite that might cost any 100 million, up to as much as 4 or 500 million.” (09:05)
  • “They stick it on the back of a FedEx… if something’s going to fall off, it will fall off.” [on Starlink's QA process] (18:56)
  • “In some ways, it's been a bit like the airline industry. You know, how do you make a million dollars? You start with a billion dollars.” (26:53)

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Timestamps for Key Segments

• 01:20 – Rachel Jewett on the pervasiveness of satellites
• 02:08 – $293 billion industry size
• 03:29 – The Sputnik era and the public's fascination with satellites
• 07:45 – How geostationary satellites work
• 11:22 – How satellite operators make money
• 16:48 – Decline in traditional satellites, rise of streaming
• 17:12 – What are Low Earth Orbit satellites (LEOs)
• 18:14–21:41 – Starlink's dominance, mass production, and economic disruption
• 22:17–23:53 – Satellite failure, servicing, and growing disposability
• 24:17 – Risks of space debris and the Kessler Syndrome
• 25:25 – End-of-life protocols for satellites
• 25:52 – Rachel Jewett on the positive impact of satellites
• 26:53 – Airline industry analogy on satellite profit margins

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Tone and Style

• Informative, accessible, and brisk—a blend of practical curiosity and subtle humor.
• Expert commentary integrated with clear explanations, myth-busting, and big-picture context.
• Candid about both the promise and perils of satellite proliferation.

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Conclusion

This episode of The Economics of Everyday Things offers a thorough look at the satellite industry’s hidden but foundational role in the modern world. Zachary Crockett guides listeners through the evolution from massive, costly satellites to today’s affordable, replaceable LEO constellations, while raising urgent questions about space debris and sustainability. Packed with real-world examples, expert insights, and a dash of wit, the episode decodes a technical but vital topic for the curious layperson.

Transcript

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[Zachary Crockett (Host/Narrator)]

When you hear the word satellite, you might think of a remote object traveling thousands of miles away in space, impossibly far from any living thing. But here on Earth, a big part of our economy depends on them.

[Rachel Jewett (Managing Editor, Via Satellite)]

People have no idea how much of their daily life is touched by satellites.

[Zachary Crockett (Host/Narrator)]

That's Rachel Jewett. She's the managing editor of Via Satellite, a trade publication for the commercial satellite industry.

[Rachel Jewett (Managing Editor, Via Satellite)]

Cruise ships use satellites, John Deere uses satellites. The government uses them. All of the apps that you use that have gps, like Uber or Doordash, anything like that, that's using the gps satellites, weather forecasts. Part of that is coming from satellite data, your broadcast tv. If you're on a cable network, getting.

[Zachary Crockett (Host/Narrator)]

These satellites up and working is a big job. It involves a complex manufacturing process, rocket launches, and a network of terminals and ground stations all over the world.

[Rachel Jewett (Managing Editor, Via Satellite)]

The satellite industry is $293 billion in size, and it's a huge portion of the global space economy.

[Zachary Crockett (Host/Narrator)]

The business is also in the middle of a revolution. In just the past five years, the number of active satellites in orbit has more than quadrupled, and the economics of building and launching them have changed astronomically.

[Satellite Industry Expert]

In the traditional model, you're building one satellite that might cost hundreds of millions of dollars. The cost of launching new satellites is less than a million dollars, and they can get a lot more satellites on a rocket.

[Zachary Crockett (Host/Narrator)]

For the Freakonomics radio network, this is the economics of everyday things. I'm Zachary Crockett. Today, satellites by definition, a satellite is any object that revolves in a curved path around the planet. Technically, the moon is a satellite, but most of the time we talk about satellites, it's in reference to the weird looking pieces of hardware that we build and shoot into the sky. When the first man made satellite, Sputnik 1 was launched by the Soviet Union in 1957, it captivated people all over the world.

[Sputnik Narrator]

Today, a new moon is in the sky. A 23 inch metal sphere placed in orbit by a Russian rocket.

[Zachary Crockett (Host/Narrator)]

Orbiting hundreds of miles up in the atmosphere, it was able to send a radio signal back to earth for three weeks before its batteries ran out. Sputnik was mostly a way for the Soviets to show off their engineering prowess. But as satellites evolved, they found commercial applications.

[Satellite Industry Expert]

Satellite has been essential for a long time, Dating back to the 1960s when it was first used for transmitting TV signals across the oceans. When people wanted live TV from the Olympic Games in the 1960s, that was done via satellite.

[Zachary Crockett (Host/Narrator)]

Tim Ferrer is the president of TMF Associates, A space consultancy that has worked with satellite companies for more than 20 years.

[Satellite Industry Expert]

Since then, it's evolved into things like satellite TV and other communications. We've seen a lot of interest in broadband services on planes, on ships, in people's homes when they're in remote areas.

[Zachary Crockett (Host/Narrator)]

On earth, we have a bunch of ways to transmit information. Telephone wires, fiber optic cables, cellular networks. But there are a lot of places where those methods aren't feasible. Satellites can relay information from one place to another using radio waves.

[Satellite Industry Expert]

Typically, a satellite is either a box or a cylinder at its heart, and that contains all the electronics and the processors and what is needed to keep the satellite stable. You usually have two big, big solar array wings that stick out from the side of the satellite. And then on the bottom of the satellite, pointing towards the earth, you'll have a dish that focuses the signal down onto the ground.

[Zachary Crockett (Host/Narrator)]

You may have seen one of those enormous satellite dish looking things on the top of a hill that's called a gateway or a ground station. It transmits a radio wave signal at a specific frequency. A satellite up in the sky receives that signal with all of its fancy equipment, Then sends it back to earth to a network of individual devices like the satellite dishes and Internet terminals you put on your roof.

[Satellite Industry Expert]

So Netflix, you know, that's providing you with your streaming TV service. You ask Netflix to send you a show. Netflix puts that onto the Internet. That gets routed to an earth station that's connected to fiber and it's sent up to the satellite that's going overhead. And then the satellite relays that signal back to me at my home.

[Zachary Crockett (Host/Narrator)]

And today There are nearly 12,000 active satellites orbiting earth. Many of them are used for communication, like satellite Internet, TV and phone service. But they're also used to collect highly detailed Earth imagery, which has its own business applications.

[Rachel Jewett (Managing Editor, Via Satellite)]

So if you're a trader on Wall street trading on energy, you might be monitoring progress on a power plant in China. These companies take pictures from space, and they track cars in parking lots on certain sites to see how construction is progressing.

[Zachary Crockett (Host/Narrator)]

Again, that's Rachel Jewett.

[Rachel Jewett (Managing Editor, Via Satellite)]

Something that people are really trying to figure out right now is how to get better wildfire detection with satellites. They're looking for changes in heat. Or it could be a sensor on the ground that's sending its data via satellite.

[Zachary Crockett (Host/Narrator)]

Global positioning is another big market for satellites. Different countries use different systems, but in the US we're most familiar with GPS. There are only around 30 GPS satellites in orbit, and they're all owned by the government, which provides positioning data free of charge. Private manufacturers sell equipment like receivers that can more finely tune that positioning.

[Rachel Jewett (Managing Editor, Via Satellite)]

Farmers are able to use use their machines to plant very, very specifically. And they know, like, the exact inch that something was planted. They have satellite terminals on the John Deere tractors that connect to a different network, and they augment the GPS signals.

[Zachary Crockett (Host/Narrator)]

Traditionally, most satellites in orbit have been what are called geostationary satellites. They're about the size of a school bus, and they orbit at a high altitude, around 22,000 miles.

[Satellite Industry Expert]

Those satellites look to be at a fixed point in the sky, and they can broadcast the TV signals all across the US with just one satellite. They're sufficiently high up above the Earth so that the speed at which they orbit the Earth matches the speed of the Earth's rotation. You just point a dish at the satellite, and the satellite stays in the same place. If you are in the broadcast industry, like if you've got a satellite TV company, then you want to be able to broadcast your service all across the US to lots and lots of people. So those systems are in geostationary orbit.

[Zachary Crockett (Host/Narrator)]

In the early days, many of these satellites were actually made by car companies like General Motors and Ford. At one point in the 1980s, Ford Aerospace was responsible for more than half of all communications satellites in orbit. Today, it's mostly big aerospace companies.

[Satellite Industry Expert]

Boeing, Lockheed Martin, Airbus makes a lot of satellites. There's a company called Thales Alenia Space that is another big aerospace and defense company in Europe.

[Zachary Crockett (Host/Narrator)]

A single geostationary satellite can take several years to build. They're incredibly expensive, and they need a lot of testing.

[Satellite Industry Expert]

In the traditional model, you're building one geostationary satellite that might cost any 100 million, up to as much as 4 or 500 million. And so you have to be really, really careful. You're using proven materials, things that have been tested in radiation environments to check they're not going to get sort of zapped by cosmic rays. You put it in what's called a thermal vacuum chamber, where you basically take all the air out and check nothing falls off and you shake it around and check everything's going to stay connected.

[Zachary Crockett (Host/Narrator)]

During this phase, a satellite also has to get clearance to be in space. Satellites are regulated by the International Telecommunications Union. It's an agency of the United nations that agrees on certain rules and standards. But each country also has its own internal regulatory body. In the US that's the Federal Communications Commission. When a new satellite goes up, it has to use a specified part of the frequency spectrum to send signals.

[Satellite Industry Expert]

They go to the FCC and say, I want to launch this set of satellites in this frequency band to do these things. And the FCC says, well, you better show me you're not going to interfere with anyone else who wants to do the same thing. They submit a lot of papers and math and engineering calculations and ultimately hopefully the FCC says, sure, go ahead and do that, and then you get your bit of spectrum.

[Zachary Crockett (Host/Narrator)]

Once it's built and approved, each satellite has to be launched into space on its own rocket. This job is typically outsourced to a contractor and it can add another eight figures to the cost.

[Satellite Industry Expert]

SpaceX is the biggest contractor for rocket launches. When it comes to what they charge external customers, we're talking about $60 million plus.

[Zachary Crockett (Host/Narrator)]

Most of these geostationary satellites are owned by satellite operators like SES and ViaSat. These companies order satellites from manufacturers like Boeing, pay SpaceX to launch them, and run big ground stations where they monitor and manage their fleets. They make money by renting data capacity to customers.

[Rachel Jewett (Managing Editor, Via Satellite)]

They're selling to media broadcasters, they're selling to governments, they're selling to cruise ships, airlines. They're selling to mobile network operators. To expand the reach of their networks. The cable operators have years long contracts with satellite operators.

[Zachary Crockett (Host/Narrator)]

Each megabit per second of capacity can be sold for a few hundred dollars per month. And a large geostationary satellite might be capable of delivering up to a million megabits every second. Once these satellites are in space, they typically last around 15 or 20 years. And the clock is ticking on an operator's financial return.

[Satellite Industry Expert]

If you spent five or six hundred million dollars on a satellite, you'd hope to get back hopefully as much as $100 million a year over that period and make a profit. If you don't sell very much of it, and it's not such a good investment. You might only get back $50 million or less every year, but that's the bet you're making to pay for the satellite before it reaches the end of its life.

[Zachary Crockett (Host/Narrator)]

Those bets aren't the only threat to satellite operators. Bottom line, these days they face competition from a new type of satellite that's coming up the Economics of Everyday Things is sponsored by Mint Mobile. Summer's here and the only thing that should be heating up is the grill. So don't get scorched by your wireless bill. Say bye bye to your overpriced wireless plans, jaw dropping monthly bills and unexpected overages because Mint Mobile is here to rescue you. Mint mobile is offering three months of unlimited premium wireless service for $15 a month. All plans come with high speed data and unlimited talk and text delivered on the nation's largest 5G network this year. Skip breaking a sweat and breaking the bank. Get this new customer offer and your three month unlimited wireless plan for just 15 bucks a month at mintmobile.com economics that's mintmobile.com economics upfront payment of $45 required equivalent to $15 a month limited time new customer offer for first three months only. Speeds may slow above 35 gigabits on unlimited plan, taxes and fees extra. See Mint Mobile for details. The Economics of Everyday Things is sponsored by Acorns. When was the last time money stressed you out? Made you feel guilty? Jealous? Money can make us feel a lot of things, but what if it made you feel hopeful? Get more out of your money and start building a better future with Acorns. Acorns is the financial wellness app that helps you invest for your future, save for tomorrow and spend smarter today. Acorns makes it easy to start doing more with your money. You don't need to be a finance whiz. Acorns puts your money into an expert built portfolio to make sure you're investing wisely, not wildly. And it's an all in one easy to use Apple. Sign up now and Acorns will boost your new account with a $5 bonus. Investment. Join the over 14 million all time customers who have already saved and invested over 25 billion with Acorns. Head to acorns.com economics or download the Acorns app to get started. Paid non client compensation provides incentive to Positively promote Acorns Tier 2 compensation provided investing involves risk. Acorns Advisors LLC, an SEC registered investment advisor. View important [e-mail] Economics the economics of Everyday Things is sponsored by Indeed. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed with Sponsored Jobs. Your post jumps to the top of the page for your relevant candidates so you can stand out and reach the people you want faster. There are no monthly subscriptions, no long term contracts, and you only pay for results. Join the 3.5 million employers worldwide that use Indeed to hire great talent fast. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of this show will get a $75 sponsored job credit. To get your jobs more visibility@ Indeed.com everydaythings just go to Indeed.com everyday things right now and support our show by saying you heard about Indeed on this podcast. Indeed.com everydaythings Terms and conditions apply. Hiring Indeed is all you need. Because they're so high up in space, geostationary satellites have a very broad reach. A single device can cover about a third of the Earth's surface. That's great for something like satellite tv, where the same programming is broadcast to a large number of people. But in the past decades, the media landscape has dramatically changed.

[Satellite Industry Expert]

There's not as many geostationary satellites being ordered because more and more we get our TV services from streaming. We get it from Netflix and Amazon and Apple. You have to have thousands of satellites to carry all that traffic because they've got to send signals to every individual user, not just broadcast across the whole country.

[Zachary Crockett (Host/Narrator)]

That's where a different type of satellite called Low Earth orbit, or LEO, comes in. These orbit as low as 300 miles above the Earth's surface. Unlike geostationary satellites, LEO satellites are always in motion relative to the Earth's rotation. They travel at 17,500 miles per hour and can orbit the Earth in about 90 minutes. They're a lot smaller, anywhere from the size of a shoebox to the size of a table, and there are a hell of a lot more of them.

[Satellite Industry Expert]

You need to make sure that if you're going to deliver a continuous signal, you need the next satellite to come along before the other one's gone out of your view. And so it's a game of scale. You need hundreds or even thousands of satellites so that you can always hand off from one satellite to the next one and not lose. The more you can build, the better the economics get, because there's more and more satellites to choose from.

[Zachary Crockett (Host/Narrator)]

In recent years, there's been fierce competition to dominate this new frontier of satellites, and so far, a clear winner has emerged with Starlink, a line of satellites made by SpaceX. The company started launching them in 2019 and already makes up more than two thirds of all satellites in operation.

[Satellite Industry Expert]

SpaceX alone has accounted for 8,000 new satellites being put into orbit.

[Zachary Crockett (Host/Narrator)]

In contrast to the traditional geostationary satellites that take years to build and test and cost hundreds of millions of dollars, SpaceX manufactures multiple satellites every day at a reported cost of less than $500,000 each.

[Satellite Industry Expert]

The low earth orbit satellites, they're smaller and easier to make when you're making them in vast numbers, that allows you to cut back on the testing. So what does Starlink do to test its satellites with the vibration? Well, they stick it on the back of a Fede, send it off to the launch station and figure that the roads going down to Cape Canaveral in Florida are so rough that it's going to be shaken around enough on the way there. And if something's going to fall off, it will fall off. So they lose a few. But they don't need to do all the testing that you had to do with your one off hundred million dollar satellite.

[Zachary Crockett (Host/Narrator)]

SpaceX enjoys another huge advantage over the traditional satellite operators vertical integration. They not only build their own satellites, they also launch them using their own rockets. SpaceX is a private company and they didn't respond to our request for comment on their costs. But Tim Ferrer says that each launch might only cost them a fraction of the $60 million they charge other operators.

[Satellite Industry Expert]

Their internal costs are maybe only 20 to 25 million dollars. Some people estimate even less, but. And they can do as many as 20 launches with a single rocket, at least the first stage, the bit that comes back to Earth and that saves a lot of money.

[Zachary Crockett (Host/Narrator)]

The economics are even more favorable when you consider that SpaceX can split that cost across many satellites.

[Satellite Industry Expert]

I talked about the design of traditional satellites. It's usually a cylinder or a cube. Now Starlink has gone for novel design where basically they're big, flat rectangle. Starlink satellites are stacked one on top of another 20 to 30 satellites or more on a rocket. And so the cost of launching each of those satellites is less than a million dollars. We're talking about each of those satellites with their 100 gigabits of capacity, costing maybe $2 million to build and launch, compared to the Geo satellite that has 10 times as much capacity. But that might have cost you $600 million to build and launch. So, you know, 300 times more for only 10 times more capacity. That equation isn't so favorable to the geosatellites anymore.

[Zachary Crockett (Host/Narrator)]

SpaceX makes money on its Starlink satellites by selling Internet plans that range from $80 for residential customers to thousands of dollars for certain commercial accounts.

[Satellite Industry Expert]

Each individual Starlink satellite might only serve a few thousand users, but collectively, they have enough capacity for 10 or 20 million users. They have 6 million users today, and they have enough to accommodate growth, at least in a lot of parts of the world.

[Zachary Crockett (Host/Narrator)]

It's a promising business model, and they aren't the only company doing it. OneWeb has more than 600 LEOs in orbit. Amazon has plans to build 3200 satellites of its own. And a handful of other companies like Planet Labs and AST Space Mobile are also competing for market share. But this huge swell in satellites Isn't without cause for concern. Smaller satellites, like those that SpaceX makes, reportedly only last around five years, and they constantly need to be replaced.

[Satellite Industry Expert]

Cosmic radiation is quite intense up in space, and those sometimes make your computer malfunction. That can send a satellite out of control and kill it very quickly. And the other part is your batteries. With low earth orbit satellites, they're going round and round the earth from the dark to the light every 90 minutes. And they're using lithium ion batteries generating power from solar. And after a few years, the battery just can't hold a charge anymore.

[Zachary Crockett (Host/Narrator)]

But the most common cause of death of a satellite Is simply running out of fuel.

[Satellite Industry Expert]

You have to maneuver the satellite to keep it in the right place in space, and you have to expend a little bit of fue so you put enough fuel on the satellite to last a certain number of years. With a geostationary satellite, it might be enough to last 15 years. With a low earth orbit satellite, you might need to maneuver a bit more, and you might only have enough for five, eight, ten years.

[Zachary Crockett (Host/Narrator)]

We're not quite at the point where we have reliable roadside assistance for satellites in space, but in some cases, operators enlist something called a mission extension vehicle. It's a special type of satellite that latches onto another satellite in orbit and uses its own thrusters and fuel to prolong service. It's not cheap.

[Satellite Industry Expert]

It's a few tens of millions of dollars to get this servicing satellite up there to keep it going for another five years.

[Zachary Crockett (Host/Narrator)]

For a $300 million geostationary satellite, it can be worth the cost. For the new, smaller satellites, not so much.

[Satellite Industry Expert]

We're moving from the geostationary world to the low earth orbit world, where the satellites are becoming more and more disposable. And so people are not likely to do that For a satellite that only cost you a million or $2 million in the first place.

[Zachary Crockett (Host/Narrator)]

Rachel Jewett of Via Satellites says that the expendability and sheer number of these small satellites might pose a risk.

[Rachel Jewett (Managing Editor, Via Satellite)]

Some people say that there's plenty of space in space. We just need the right traffic management system. But then some people are concerned that it is getting quite crowded. If two satellites collide, they create debris, then it kind of goes into a spiral. Basically, that's a worst case scenario fear that people talk about.

[Zachary Crockett (Host/Narrator)]

In 1978, two NASA scientists laid out a theoretical scenario called the Kessler Syndrome. They posited that one day the increasing density of objects in low Earth orbit could lead to collisions. And these would create a chain reaction of other collisions, ultimately making certain regions of space unusable. So far, satellite collisions are rare, but they have happened.

[Satellite Industry Expert]

There was a famous collision about 15 years ago where a satellite collided with a defunct Russian spacecraft and scattered debris all over the sky. And people got very worried about that.

[Zachary Crockett (Host/Narrator)]

Regulators have imposed more stringent rules in recent years to make sure satellites are appropriately disposed of at the end of their life.

[Rachel Jewett (Managing Editor, Via Satellite)]

In low Earth orbit, they are deorbited, they are sent down, and they burn up in the atmosphere. And in geostationary orbit, they have propulsion on board, and they boost themselves up higher into what's called a graveyard orbit.

[Zachary Crockett (Host/Narrator)]

So they're just perpetually floating around somewhere up there?

[Rachel Jewett (Managing Editor, Via Satellite)]

Yes.

[Zachary Crockett (Host/Narrator)]

But for true spacers like Rachel Jewett, the benefits still outweigh the costs.

[Rachel Jewett (Managing Editor, Via Satellite)]

Obviously, we're talking about really amazing technology. It's improving agriculture or bringing connectivity to areas that have never had it before, making, you know, search and rescue as possible. What we're really talking about is making stuff possible here on Earth. That's what I think is really cool.

[Zachary Crockett (Host/Narrator)]

For the economics of everyday things. I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz Rapson, and thanks to listeners Tina Hus Yao and Adam Landis for suggesting this topic. If you have an idea for an episode, feel free to email us@everyday thingsreakonomics.com Our inbox is always open. All right, until next week.

[Satellite Industry Expert]

In some ways, it's been a bit like the airline industry. You know, how do you make a million dollars? You start with a billion dollars.

[Zachary Crockett (Host/Narrator)]

The Freakonomics Radio Network.

[Rachel Jewett (Managing Editor, Via Satellite)]

The hidden side of everything Stitcher.

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[Zachary Crockett (Host/Narrator)]

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