You'd think that once SpaceX takes over a significant amount of the market (right now they're at 1/3 or something like that? correct me if I'm wrong) you'd think that everybody will go "Okay.. yep.. reusable rockets. The market tells us we need to do this or we won't be able to compete"
I love that SpaceX continues to innovate like this. If they end up dominating the market, then so be it. If others want to join in, they will have to spend money on innovation as wel
The thing is that 1/3 of the commercial launch market is dangerously close to catastrophic for other commercial launch providers. This is because the astronomically high costs of rocket production means that some minimum floor of business is required to keep commercial ventures open and more often than not launch providers are operating at levels not far above that floor.
To a lesser or greater extent, all launch providers are quasi-nationalized corporations with subsidized operations in one manner or another. Europe just completed 'privatization' of the Ariane Group which makes their rockets, however, they still guarantee block-buys of their rockets to help them meet that minimally viable launch cadence. Russian and Chinese launch providers are state-owned and are also guaranteed flights by their governments. India and Japan are also in the process of privatizing their launch providers but again, with guaranteed government launches.
While the guarantee of government flights could be seen as a method for sustaining these quasi-nationalized entities, the story of ULA is cautionary. ULA is a merger of the launch divisions of Boeing and Lockheed. They sued each other so many times during the late 90's, early 2000's that the government essentially forced them to merge in order to keep them in business for national security reasons. At the time, they had a healthy share of the commercial launch market. However, they became increasingly reliant on government launches (which have inflated costs for a lot of reasons) to the point where even their commercial offerings were hyper-expensive. This meant the market shifted heavily toward Arianespace (and temporarily to Russia until they began crashing a lot of rockets) which in turn meant ULA had to rely more on government launches, which drove costs up further, which caused them to lose more commercial work and so on in a vicious cycle.
The result was the US lost basically all commercial launch business through the 2000's and ULA has basically worked themselves into a corner where they just can't compete on the commercial market. Government launches have sustained them but their high costs have created a lot of anger with the government which is now in the process of weening themselves off of sole-sourcing all launches from ULA. If that company doesn't get their act together (and quick), it will likely collapse.
Arianespace, as an arm of the EU, is in a better position but only just. They have their heads in the sand right now and are frequently ridiculed by the French press for being unable to match SpaceX on price or technical prowess. The Chinese are even funding start up companies to create re-usable rockets and at this point the writing is on the wall for anyone who's paying attention.
Chinese hover test at 1:00
