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Here's some context: when Amazon bought Twitch, it basically took that IP and created Amzon Interaction Video Services ("IVS") [1] as a live streaming solution
by jmyeet 3y ago
Here's some context: when Amazon bought Twitch, it basically took that IP and created Amzon Interaction Video Services ("IVS") [1] as a live streaming solution within AWS. IVS is also the basis for Kick.
Amazon and Twitch frequently talk about how Twitch is unprofitable and use it as an excuse to increase ad density. lower creator rev share, etc. Thing is, their unfprfitability is largely an accounting trick. Let's asy the compute cost for a stream is $50 and the ad revenue is $80 but there are two points in between: IVS and Twitch. Amazon could charge $50 for IVS and Twitch is super-profitable. Amazon could charge $90 for IVS and Twitch is losing money even though IVS is hugely profitable.
The reason I bring this up is that I'm skeptical about Amazon's claims of Twitch in Korea being unprofitable just like I'm skeptical of all of Amazon's statements regarding Twtich profitability. South Korea is a developed nation with robust netowrk infrastructure. I doubt egress bandwidth from South Korea is particularly expensive. If it is, Amazon is a large enough company to solve that with their own backhaul. AWS has a region in South Korea so encoding shouldn't be an issue.
In the last 2-3 years we've had a slew of reports from the likes of CVS and Walmart blaming theft on unprofitability in closing stores. This was and is a lie. It's used to mask rising costs, poor inventory management and bad execution.
So when I see an announcement like this I really have to ask "what failure is Amazon/Twitch really hiding?" because I'm convinced there is one.
[1]: https://aws.amazon.com/ivs/ https://aws.amazon.com/ivs/
- rsingel 3y agoIt's not the actual cost. It's the Korean regulatory requirement that sending networks pay. That's why Cloudflare moved most CDN content out of S. Korea to Japan, and why Facebook did the same, and why Netflix sued SK Broadband. The demanded fees are outrageous.
- Xelynega 3y agoWhy are they outrageous? I've yet to see a reason that Netflix/twitch/etc. having to pay for the infrastructure they profit massively from is a bad thing. If they have to pay a larger share, it means that services that don't use as much can be charged a much more reasonable rate.
- karmasimida 3y agoIf Twitch profited massively why would they leave?
- ftth_finland 3y ago> Why are they outrageous? Because the price is a very large multiple of market prices. The Korean ISPs are using their termination monopoly to rent seek. > I've yet to see a reason that Netflix/twitch/etc. having to pay for the infrastructure they profit massively from is a bad thing. Netflix/twitch/etc. already pay for their global infrastructure to bring services to Korea. Korean ISPs are already paid by their users for the Korean infrastructure. It is totally unreasonable for Korean ISPs to be double dipping for something they have already paid for. It is not Netflix/twitch/etc that are originating the traffic, but Korean end users REQUESTING the traffic. The Korean end users paid for Internet access, the Korean ISPs should deliver. To reiterate, the Internet is not a PUSH medium. The Internet is a PULL medium. In the good all days, all content was hosted in the US. Is that what the Korean ISPs want to go back to? Are they itching for doing all that investment into billion dollar subsea cable systems? > If they have to pay a larger share, it means that services that don't use as much can be charged a much more reasonable rate How about no? Market prices for bandwidth are a fraction of a penny per gigabyte. A fraction of a penny isn’t a problem, but Korean ISPs price gouging is.