Thats why cloudflare won't host sites with lots of video. It's why twitter doesn't do HD video. Thats why there are no startups trying to make video hosting sites.
If you hosted a youtube clone on AWS with their cloudfront CDN, you'd be paying $0.085 per GB out to the internet. A youtube ad view earns perhaps $0.004. HD video is ~6GB/hour, so a 3 minute video costs $0.0255 to host (before compute and storage costs, profit and engineer time).
Earning $0.004 for something that costs you $0.025 is never going to work out...
I don't like this reasoning because I've seen the inside of google. Their bandwidth is very cheap.
What costs is having a CDN, a bunch of very fast servers that exist in every point-of-presence, given the load they endure CDN cache servers fail quickly when compared to others. -- along with the upkeep of their networking equipment, which is cheap but not free.
But Google itself has invested wisely in how it connects to the internet, they are dark fibre all the way with many hundreds of gigabits between sites and pops. It's a huge upfront investment (the kind SV startups seem to hate) but the long tail makes bandwidth essentially free.
The only cost they have is hardware and peering, and given their size I can't convince myself if they are or are not being shafted financially by big ISPs for peering - even if they are though, it's marginal compared to what GCP/AWS/etc; charge us, even Colo datacenters will charge significantly more than what it costs Google.
Thanks, this is exactly what I was wondering about. I would expect Google's marginal cost of bandwidth to be approximately zero. What are networks going to do, not connect to Google?
And to be clear this is literally what happened to Netflix and I think YouTube and a few other sites in the pre-Net Neutrality days. Of course we don't have Net Neutrality anymore either, so presumably Google is paying ISPs not to throttle, or ISPs are content with the 1TB/month cap they tend to have.
Also, that 1TB/month cap is just foot-in-the-door technique. It will stay 1TB or so as videos, games, websites, etc. continue to get larger and larger and then they will lean on Appeal to Tradition (logical fallacy) when people complain that 1TB/month isn't adequate.
That kind of reminds me of the Monty Python skit where two mafiosi try to shake down the army. Why in the world would Google pay up? Your average ISP needs YouTube to work well far more than Google needs one ISP.
> Thats why there are no startups trying to make video hosting sites.
No, there are no startups in video for the same reason there were no startups in office apps or operating systems in the 2000s, a subsidized 500lb gorilla in the space.
The problem with a video startup is that you have to charge for your content. And some jerk will download your video, post it to YouTube, and distribute it for free.
If YouTube were forced to stand on its own instead of being subsidized by the Google advertising maw, we'd see innovation in the space.
Until YouTube gets broken out from Google by anti-trust action, the video startup space will continue to remain dead.
The big cloud providers all charge ridiculous amounts for their bandwidth. It makes your numbers completely invalid for any bandwidth-focused operation.
Also youtube's bitrate usually far below that amount.
Because it doesn't answer the question. I was asking about YouTube, which, being part of Google, occupies a radically different position. They aren't using AWS to host their video, so the numbers are irrelevant.
