Over at The Space Review Sam Dinkin has a piece on scenario planning for suborbital companies. Some thoughts:

I think the most likely scenario is that the suborbital launch services industry will segment into three divisions. There will be the tourism oriented businesses, the earth observation (or reconaissance) businesses and the science oriented businesses. Obviously anyone with a vehicle can attempt to serve all three, but the requirements are not the same for the different mission profiles. Some of the science can be done on just about any vehicle, namely experiments which merely require a couple of minutes of microgravity. This covers a fair number of little experiments in materials science. Only time will tell if it’s enough to sustain a business alone (I suspect not), but it’s certainly enough to add a little to the revenue stream of any company willing to go after it. Other scientific missions require launch at specific locations in order to study the environment of near earth space. I suspect there’s a market for launches near the poles for plasma experiments, but again, that’s probably rather limited.

Earth observation requires a mobile launcher, since mobility greatly expands the number of sites that can be watched. This argues against horizontal takeoff or landing since that imposes limits. For earth observation a vertical takeoff, vertical landing vehicle like TGV’s MICHELLE-B or Armadillo’s Black Armadillo are most likely to be successful, though a mixed mode vehicle like Pioneer’s XP which has both jet and rocket engines can overcome at least some of the limitations on range imposed by the need for a runway.

Tourism imposes few requirements on the vehicle other than safety. Tourists can reasonably be expected to travel to the launch site, and the operator can have a significant fixed infrastructure without impacting the ability to serve the target market (though the infrastructure may be expensive). The real driver for the tourism market has to be safety. Losing a ship taking pictures or running some grad student’s PhD thesis experiment is bad, but it’s not necessarily a killer for the business. If, on the other hand, you lose a ship with a couple of tourists on board you significantly impact your ability to recruit future customers. This suggests that tourism oriented businesses ought to be as conservative as possible in their vehicle design, and should focus on passenger survivability to the exclusion of nearly all other factors. The lowest risk incremental path forward is probably horizontal takeoff/horisontal landing, keeping operations as airplane like as possible, which is the path taken by XCOR and Scaled. The dangerous part of the flight profile is near the ground. Having a vehicle with the ability to glide (basically prolonging the fall) makes a lot of sense from the standpoint of keeping failure modes as graceful as possible. There’s certainly an added appeal to VTVL from the thrillride standpoint, but from the standpoint of the operator of the vehicle keeping the passengers alive under a wider range of failure conditions probably trumps giving them the most exciting experience.

Tourism implies HTHL and earth observation implies VTVL is a little too tidy to capture the messy realities of the way the marketplace is likely to evolve. Nonetheless, the future evolution of the suborbital launch services market is almost certainly going to end up picking a prefered launch/landing mode with specializations depending on the business model of the operating company. In the very long term, when there is a large experience base of operations on VTVL ships, I suspect that the orbital vehicles that evolve from the suborbital vehicles of today will end up being DCX style tailsitters.