A Pricing Guide to Online Video Delivery and Storage

This article first appeared in the Feb. 2007 Streaming Media Industry Sourcebook. Click here to view the digital version.

Additional pricing information can be found on Dan's blog from a posting entitled "Content Delivery Video Pricing Rises In The First Half Of This Year", posted June 14, 2007.

Pricing. It remains one of the topics our readers ask us about the most, due largely to the fact that service providers change their pricing from deal to deal and rarely stick to their own rate card. This can leave the customer very confused when shopping for the best combination of price and service from multiple providers, since it can be difficult to make an apples-to-apples comparison. Since some organizations need to deliver lots of video, while others—like nonprofits and small businesses—may need to deliver only a few videos, this article will cover real pricing numbers from both large, globally focused content delivery networks as well as smaller regional service providers.

To start with, what’s the difference between a content delivery network and a service provider? That answer all depends on whom you ask. It seems everyone has a difference of opinion on what makes a content delivery network (CDN). Typically, most people use the term CDN when referring to the large delivery networks that focus on delivering massive amounts of data from many locations all over the globe. These CDNs usually go after large media, enterprise, and government organizations and focus on high-capacity, high-volume needs. The term "service provider" is usually used when describing those delivery networks that offer services based on a small geographic region. That said, the term CDN is just a marketing term. There is no rule that says in order for a company to call themselves a CDN they have to have x amount of capacity or x number of locations. So the term is generic as it’s used today.

So how does one compare one provider to another in an equal setting? I always use the example of how one shops for a car. Compare the features and functionality and don’t shop on price alone. Shopping for a content delivery network or service provider is done in the same way. If you are a small business, small nonprofit, or just require a small amount of storage and delivery, it would not make sense for you to deal with a CDN that focuses on global delivery with a monthly minimum commitment of $2,500—just as you would not look at a two-seater Porsche if you needed seating for four with a large trunk.

Many factors affect the price you pay for the delivery of audio and video content via streaming and downloads. With this in mind, let’s look at the two biggest factors that affect the price that are relevant to all delivery providers—bandwidth commit and storage—and what you can do to help get the best price.

Commitment Issues
For the majority of vendors, your commit—the volume of GBs of bandwidth or transfer you pay for each month, whether you use it or not—is the single biggest factor they use to determine pricing. The more you are willing to commit to each month at the start of the contract, the more the vendor will be willing to discount the pricing per GB. If you have already been delivering content online, chances are you already know the volume you do on a monthly basis and the growth patterns you are seeing. If you know these numbers, you have to decide what your growth will be and if you want to commit to a higher delivery volume up front and get a better price. The upside is you get a better deal; the downside is that you may pay for something you don’t end up using, something no customer likes.