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Ok. This article seems to be saying that Netflix epsnds 500 mil/year on shipping, and they now spend more on streaming than shipping. Let's say they spend 500

Ok. This article seems to be saying that Netflix epsnds 500 mil/year on shipping, and they now spend more on streaming than shipping. Let's say they spend 500 mil/year on streaming. http://newteevee.com/2010/10/20/netflix-ceo-we-are-now-a-streaming-company/ http://newteevee.com/2010/10/20/netflix-ceo-we-are-now-a-str... Let's also assume that they spend 2 cents/gb on bandwith, so $1/50gb. 50gb * 500mil == 500 * 50pb == 25 exabytes. Somebody with more knowledge: does the yearly US bandwidth sound like it's in the range of 125 exabytes?

jedberg 16y ago
They run their entire streaming service from EC2, which at the best price is 8 cents /GB. Assuming they worked out a deal (which I've never heard of Amazon doing), they might be as low as say 4 cents. So I'd say best case you need to at least 1/2 your numbers.
- timdorr 16y ago
  Where does it say that? If they're pushing as much transit as they say they are, they would be going straight to the Tier 1's and running their own servers. Also, when you're doing as much traffic as Netflix is, then you should be measuring in line speed, not data transferred. Providers bill based on speed (by the Mbit or Gbit) because that represents best how much of their total capacity you're using. It doesn't cost them anything to transfer some amount of data, but it does cost them in the total amount of bandwidth they have left to sell to other customers.
  - mfringel 16y ago
    It doesn't cost them anything to transfer some amount of data, but it does cost them in the total amount of bandwidth they have left to sell to other customers. At some level transfer quantity and rate are the same thing. A bit sent for customer A takes up space on the wire that can not be used for customer B, no matter how it's measured. It's also unclear which line would be measured for purposes of Netflix's transfer rate. That's one of the beauties of the cloud... specific line transfer rates are abstracted away into an aggregate quantity of data. If you're selling lines, you charge by rate. If you're selling transfer, you sell by bits.
- Terretta 16y ago
  They may "run" parts of the service from EC2, but the streams are delivered by CDNs, generally Akamai, Limelight, and Level(3). Netflix is not paying $500 million a year for bandwidth. Netflix's bandwidth pricing has been reported[1], as Akamai and Limelight jockey to try to capture more of Netflix's business. [1] http://www.businessinsider.com/akamai-gets-more-of-netflixs-business-but-at-a-very-low-price-2010-3 http://www.businessinsider.com/akamai-gets-more-of-netflixs-...
Terretta 16y ago
I think you may be misinterpreting the remark, "In Q4, we’ll spend more on streaming content than DVD content." He said "on streaming content", not "on streaming the content". Spending on licensing the content is more than on streaming the content. Revising a couple of your numbers[1], and then multiplying out: ((100 gigabytes) / (1 U.S. dollar)) * 50 million U.S. dollars = 4.65661287 exabytes (((100 gigabytes) / (1 U.S. dollar)) * 50 million U.S. dollars) / (31 536 000 seconds) = 158.54896 GBps = 1.3 terabits Articles reported Netflix was ~20% of traffic, suggesting ~6.3 terabits total traffic. Akamai was reported hitting of 3.4 terabits[2], and is considered to be around 60% market share of delivery, suggesting ~5.75 terabits of total traffic. These numbers are close enough to pass a sniff test. [1] http://www.businessinsider.com/akamai-gets-more-of-netflixs-business-but-at-a-very-low-price-2010-3 http://www.businessinsider.com/akamai-gets-more-of-netflixs-... [2] http://gigaom.com/2010/04/11/akamai-3-4-terabits/ http://gigaom.com/2010/04/11/akamai-3-4-terabits/

jedberg 16y ago

They run their entire streaming service from EC2, which at the best price is 8 cents /GB. Assuming they worked out a deal (which I've never heard of Amazon doing), they might be as low as say 4 cents. So I'd say best case you need to at least 1/2 your numbers.

timdorr 16y ago
Where does it say that? If they're pushing as much transit as they say they are, they would be going straight to the Tier 1's and running their own servers. Also, when you're doing as much traffic as Netflix is, then you should be measuring in line speed, not data transferred. Providers bill based on speed (by the Mbit or Gbit) because that represents best how much of their total capacity you're using. It doesn't cost them anything to transfer some amount of data, but it does cost them in the total amount of bandwidth they have left to sell to other customers.
- mfringel 16y ago
  It doesn't cost them anything to transfer some amount of data, but it does cost them in the total amount of bandwidth they have left to sell to other customers. At some level transfer quantity and rate are the same thing. A bit sent for customer A takes up space on the wire that can not be used for customer B, no matter how it's measured. It's also unclear which line would be measured for purposes of Netflix's transfer rate. That's one of the beauties of the cloud... specific line transfer rates are abstracted away into an aggregate quantity of data. If you're selling lines, you charge by rate. If you're selling transfer, you sell by bits.
Terretta 16y ago
They may "run" parts of the service from EC2, but the streams are delivered by CDNs, generally Akamai, Limelight, and Level(3). Netflix is not paying $500 million a year for bandwidth. Netflix's bandwidth pricing has been reported[1], as Akamai and Limelight jockey to try to capture more of Netflix's business. [1] http://www.businessinsider.com/akamai-gets-more-of-netflixs-business-but-at-a-very-low-price-2010-3 http://www.businessinsider.com/akamai-gets-more-of-netflixs-...

Terretta 16y ago

I think you may be misinterpreting the remark, "In Q4, we’ll spend more on streaming content than DVD content." He said "on streaming content", not "on streaming the content". Spending on licensing the content is more than on streaming the content. Revising a couple of your numbers[1], and then multiplying out: ((100 gigabytes) / (1 U.S. dollar)) * 50 million U.S. dollars = 4.65661287 exabytes (((100 gigabytes) / (1 U.S. dollar)) * 50 million U.S. dollars) / (31 536 000 seconds) = 158.54896 GBps = 1.3 terabits Articles reported Netflix was ~20% of traffic, suggesting ~6.3 terabits total traffic. Akamai was reported hitting of 3.4 terabits[2], and is considered to be around 60% market share of delivery, suggesting ~5.75 terabits of total traffic. These numbers are close enough to pass a sniff test. [1] http://www.businessinsider.com/akamai-gets-more-of-netflixs-business-but-at-a-very-low-price-2010-3 http://www.businessinsider.com/akamai-gets-more-of-netflixs-... [2] http://gigaom.com/2010/04/11/akamai-3-4-terabits/ http://gigaom.com/2010/04/11/akamai-3-4-terabits/