Privatization Example:
Exploring Mars for Knowledge...and Profit.

As stated on another page, it is doubtful in today's political climate that any one government could effectively "go it alone" to another planet. It follows that the same would be true of private sector sponsors, even with the cost efficiencies that "privatization" invariably brings to the table. Robert Zubrin has claimed on more than one occasion that his "Mars Direct" mission plan could be achieved by NASA for around $20-$25 billion, but that the private sector could do it for less than $10 billion. Even so, for the private sector to expend the resources, there has to be the promise of return. What follows is a short analysis of how that return could be made.

We are going to use for our hypothetical example the first "privately financed" human mission to Mars. The investment fund manager would form a partnership agreement with several other investment groups, businesses, and perhaps even a government or two. This "Consortium" would then work together to promote and complete the project for mutual benefit.

MEDIA

The first privately-sponsored manned mission to the Red Planet will be a big media event of the 21st century. And if it's going to be privately sponsored by a Consortium that includes investment fund investors, then said Consortium can (and should) dictate what media access is going to cost. For exclusive coverage of the launch alone the Consortium will charge sums that will rival those charged during the Super Bowl - if not a lot more. Consortium partners will also host subscriber pay-per-view exclusive event coverage of both the launches and the landings and first footprints. Ten to twenty million subscribers worldwide will net a hefty sum, in the range of $500-$750 million. The Consortium will offer inside views to which the networks won't have access. This is an issue that would have to be negotiated carefully between the partners, the network, and the Pay-per-view organization to ensure the maximum allocation and that all parties are satisfied, but it is definitely something that can be achieved.

Consortium partners will offer websites containing information on the mission, but most importantly, use those sites to market exclusive data downloads all during the mission. ("Subscriber sites", given short shrift by the net/business media in the past, do have workable models. Consumer Reports Online, for example, boasts 800,000 subscribers.) A lot of advertising will also be sold on those websites.

Every car entered in a typical NASCAR race has sponsor stickers all over it. Consortium booster rockets will look the same way. An "Ares-class" booster has roughly the same general configuration as the current Shuttle, as it is comprised of many of the same components. The combined surface area of two solid boosters and the external tank alone is approximately 25,000 sq. ft. At $5,000/sq. ft., that adds up to $125 million in one-time ad revenue. Such prices are already being commercially offered to help pay for private space initiatives. Space-based advertising is rapidly becoming part of legitimate corporate budgets.

On-line trading: One of the Fund's prime market advantages will be online investment capability; Fund shares will be marketed directly to individual and institutional investors. Internet marketing is going to do nothing but grow in huge proportions as the new century progresses, and is something that will pay the Fund immense dividends to take advantage of. Assuming not all Fund shares will be sold at the time of the first human Mars mission, the Fund's marketing division will be ready to take advantage of that unique historical moment.

While the first crews are on the Martian surface, Consortium sponsored, full size mockups of the hab module and ERV will be touring the globe offering close up, hands on looks, for about the same cost as that charged by major theme parks.

The first manned vehicle to return from the Red Planet also becomes an instant touring sensation and profit opportunity, before finally donating it to the Smithsonian for posterity. (for example, Ernest Shackleton helped build his budget between Antarctic expeditions by selling tickets to guided tours of his ship.)

DATA

If one invests $5-10 billion to go to another planet, all data retrieved becomes VERY precious, else the initial investment to obtain it can't be justified. This is not an obstacle in any way: data from any/all unmanned probes Consortium partners launch to Mars belongs to them, exclusively.

When the first privately-funded human explorers arrive on Mars, it's been proposed that their helmets be mounted with 3-D-effect digital stereo cameras. Every move they make, everything they say (during many EVAs) will be digitally recorded and uploaded daily, as another part of the total mission plan. Back in Silicon Valley, VR arcade programming mavens will be crunching that data to create the ultimate arcade experience! How much would you pay to spend an hour on Utopia Planitia, as though you were really there? The Fund's investors and its Consortium partners would own exclusive rights to that as well, which in itself could be a real money maker.

We are attempting to one day open up a world to colonization--but colonies must pay their way. That's among the reasons why countries like the United States and Australia were colonized. The hard-science data from Mars – specifically mineral resource data, underground water sources, etc. – will be very valuable to 3rd party organizations, presumably mining combines and global science consortia, who will want to develop those resources. Should the "Consortium mission" discover a particularly rich lode of a highly-desired resource, the Consortium would in turn enter into a fee-arrangement with the developer with the best bid. The developers are on their own after that, but long term, as profits from development come in, the Consortium gest a "commission," perhaps for 30 years or more - once again, paying the bills from the outset (this all also applies to medical data collected).

By that point, a legal structure for the sale of land/mineral rights will by necessity be in place. And again, and by extension, Colony Fund investors and their venture partners, will get a cut of the deal--by virtue of the fact that they got there first with the best.

They'll get paid either way, because future developers will need the hardware, facilities, boosters, landers, rovers, etc., and the Fund's venture partners are going to sell them.

Science, Medicine and Engineering

Any new mission hardware or infrastructure developed for both unmanned and manned missions becomes joint property of the Prime Contractor, its primary capital investor, the Colony Fund, and by extension, the shareholders. Again, that hardware may ultimately be mass-produced for sale/lease to other independent business entities engaged in the actual development of Martian resources. It will also be marketed for operations in Earth orbit, the Moon, or elsewhere in the solar system.

Mission-related Marketing

Survey "datapaks" – High profit potential, as one would be selling valuable resource-imaging-survey data both from the unmanned probes, and the manned missions;

3rd-party licensing of mission-branded products - Sales of aftermarket "Mars Direct" products could be a nice lucrative sideline. The Fund could seed companies that produce "official" t-shirts, hats, etc., market them, and take in licensing fees. Every single profit opportunity pays dividends to Colony Fund investors.

VR arcade – detailed above - also high profit potential;

CD-ROMs – "low-end" version, based on the arcade (but then again, who can predict where such technologies will be in 10 years??? They may end up one and the same thing);

Home Media sales – DVDs/Videos of the mission highlights.

Soil - This will probably only work for the first manned mission, but it alone could make the mission pay for itself. In a 1999 special issue on space produced by Scientific American, the article "Making Money in Space" mentioned the efforts of the firm Applied Space Resources to fund its lunar probe by bringing back 10 kg of soil from an area no probe has ever been, giving half of it away to researchers, and selling the other half to the public at $6,000 per gram. This is a neat trick, as (1) it sets a high market value for extraterrestrial soils, (2) raises $30 million gross, and, just as important, (3) allows for an equal $30 million charge-off on the books for tax purposes.

Now if that can be accomplished in circum-lunar space, what might the return be for Martian soil from the first manned mission? If we do the same thing, perhaps charging as much as $10,000 per gram, then a single metric ton of Martian soil would literally pay for the entire cost of the mission, all by itself. Anything earned in addition is pure profit.

 

 

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