Bandwidth Economics for Video Site

[shawnp]

I am researching starting a website which offers videos as content. If this site is successful it will be because lots of people watch my videos, but then my bandwidth usage will go way over that included in any hosting plans I have found so far.

For example:
Assuming my website has 100 videos, each 10 Mb in size. If each video gets 10,000 views per month, then monthly bandwidth is:

100 x 10 Mb x 10,000 views = 10,000,000 Mb/mo. = 10,000 Gb/mo. Bandwidth

Godaddy’s maximum bandwidth included in a hosting plan is 2000 Gb/mo., for about $287 for a dedicated server. They said they bill additional bandwith at $4/Gb, so
$287 + ($4 x 8000 Gb) = $32,287 for Godaddy

DreamHost, according to this article, http://www.philsteinmeyer.com/73/bandwidth-costs has $8 hosting with 1000 Gb included, and $1/Gb for additional bandwidth, so
$8 x ($1 x 9000 Gb) = $9008 for DreamHost

Amazon S3 sells bandwidth at $0.20/Gb,
$0.20 x 10,000 Gb = $2000 for Amazon

Finally, I read in this article
http://www.forbes.com/home/intellige...0428video.html
that YouTube uses Limelight Networks and may get charged anywhere from $0.001 - $0.01 per minute of video watched. So, if my videos are 3 minutes long:

3 min. x 100 videos x 10,000 views = 3,000,000 minutes x ($0.001 or $0.01) = $3000 - $30,000 for Limelight Networks

First of all, I don’t understand why the price of additional bandwidth goes up so much for hosting plans like Godaddy’s and Dreamhosts. Is there a way for me to buy 10 hosting plans from Dreamhost at $80/ mo. (for 10,000 Gb) and have it all apply to the same domain name, or seem like it does to the visitors?

Second, I am sure quality of bandwidth is an issue? I know you get what you pay for, but how do I determine what is “good enough”? Should I be looking only at dedicated server plans? What about virtual dedicated servers?

Third, I just don’t see how this type of website can be profitable by using advertising to generate revenue. It seems that “untargeted traffic” is worth only about $0.10 CPM through places like Adbrite. Therefore, with 10 ads per page:
$0.10/1000 views x 10 ads x 100 videos x 10,000 views = $1000 Ad revenue

So, do my numbers seem correct? Am I missing something or is this just a bad business idea?

Thanks for your help!
Shawn

[StoneCypher]

Number one, your sense of scale is wildly wrong. Number two, you're forgetting the rate at which you'll scale. Number three, you haven't done good bandwidth shopping.

First, if you have a hundred videos doing ten thousand views per month, you're serving a million videos per month. There is essentially no situation in which all of your users will watch all of your videos. A much more reasonable distribution is a gaussian curve peaking at 30-40% usage in pornography (not many other internet businesses use numbers like you do.) That suggests usage of about 350,000 videos, which cuts your costs in thirds.

Second, you don't need all your bandwidth up front. Just set up one cheapo VPS box to do routing, and watch your bandwidth use. When you get near 85% of capacity, purchase a new hosting program. It'll come online in a few hours. If your business model is viable, this should let you scale very smoothly. You don't need it from day one, and you don't know how fast you're going to scale.

Third, you shouldn't be looking at dedicated hosting. VPS is just fine for any non-security-related hosting. Here are two companies that'll give you half a terabyte a month for under seven dollars.

Now, assuming the more reasonable rate of 350k videos served at ten meg per video, you're looking at about 3.6 terabytes. You can spread that across seven of those hosting accounts for about fifty bucks a month.

Looks a lot different now, doesn't it?

[soniqhost.com]

Another way you can go is by getting an unmetered dedicated server.

[charlesgan]

Originally Posted by shawnp

I am researching starting a website which offers videos as content. If this site is successful it will be because lots of people watch my videos, but then my bandwidth usage will go way over that included in any hosting plans I have found so far.

For example:
Assuming my website has 100 videos, each 10 Mb in size. If each video gets 10,000 views per month, then monthly bandwidth is:

100 x 10 Mb x 10,000 views = 10,000,000 Mb/mo. = 10,000 Gb/mo. Bandwidth

Godaddy’s maximum bandwidth included in a hosting plan is 2000 Gb/mo., for about $287 for a dedicated server. They said they bill additional bandwith at $4/Gb, so
$287 + ($4 x 8000 Gb) = $32,287 for Godaddy

DreamHost, according to this article, http://www.philsteinmeyer.com/73/bandwidth-costs has $8 hosting with 1000 Gb included, and $1/Gb for additional bandwidth, so
$8 x ($1 x 9000 Gb) = $9008 for DreamHost

Amazon S3 sells bandwidth at $0.20/Gb,
$0.20 x 10,000 Gb = $2000 for Amazon

Finally, I read in this article
http://www.forbes.com/home/intellige...0428video.html
that YouTube uses Limelight Networks and may get charged anywhere from $0.001 - $0.01 per minute of video watched. So, if my videos are 3 minutes long:

3 min. x 100 videos x 10,000 views = 3,000,000 minutes x ($0.001 or $0.01) = $3000 - $30,000 for Limelight Networks

First of all, I don’t understand why the price of additional bandwidth goes up so much for hosting plans like Godaddy’s and Dreamhosts. Is there a way for me to buy 10 hosting plans from Dreamhost at $80/ mo. (for 10,000 Gb) and have it all apply to the same domain name, or seem like it does to the visitors?

Second, I am sure quality of bandwidth is an issue? I know you get what you pay for, but how do I determine what is “good enough”? Should I be looking only at dedicated server plans? What about virtual dedicated servers?

Third, I just don’t see how this type of website can be profitable by using advertising to generate revenue. It seems that “untargeted traffic” is worth only about $0.10 CPM through places like Adbrite. Therefore, with 10 ads per page:
$0.10/1000 views x 10 ads x 100 videos x 10,000 views = $1000 Ad revenue

So, do my numbers seem correct? Am I missing something or is this just a bad business idea?

Thanks for your help!
Shawn

sound like a youtube similar site.
in that case, go for colocation. put ur own server at datacentre.
y? you dont want to share the bandwidth with anyone in this 10k of G per month. colo will be cheaper in long run. host wat ever u like.

[ToddW]

Just a couple notes:

1. Not all videos are watched entirely. 10,000 viewings may only be 5,000 completely and 5,000 half-way. Or any other mixture.

2. You must prevent hotlinking.

3. Get a dedicated server with 2TB and you should be fine to start with only 100 videos @ 10mb each. I host more than that many videos and some a lot larger and while I don't do 10k views per-month I have shown over 2million videos in a couple years and you should have PLENTY of time to upgrade if you need to get to 10TB

[nedo]

Why you are not buying 10 server from dreamhost ?

put your files on different servers. Thats all. It ll cost 80 bucs for 11TB Bandwith monthly.

[nedo]

I am saying that coz i am going to do like that. I am buying different servers from different companies like m6.net dreamhost.com servage.net vsvs..

They are giving really big space so you can send "all the files" to all of them and make your system show your video randomly from one server. And if one of the servers will broke you ll delete it from your system but 9 of it will be working. So site will keep playing.

- Its why i am buying from different companies. -

[calibreeze]

(Sorry to bumb an old thread)

But how would you do that?

"files" to all of them and make your system show your video randomly from one server"