Tuesday, November 10, 2009

YouTube’s Bandwidth: Cheap, But Not Free

How much is YouTube paying for the bandwidth to deliver its 1 billion page views per day? Credit Suisse says $470 million a year. RampRate says $174 million. Google says “less than you think.” Now Wired.com asserts that YouTube’s bandwidth bill is zero, citing an analysis by Arbor Networks. The gist of the report is that YouTube has slashed its video delivery costs through the use of peering relationships and its in-house GoogleNet connecting its data centers (assembled through the company’s oft-reported purchases of dark fiber).

Can Google really be paying nothing to deliver video? Dan Rayburn from the Business of Online Videosays Wired has misinterpreted the statment by Arbor Networks’ Craig Labovitz that ”Google’s transit costs are close to zero.”

“Transit costs are not the same as bandwidth costs and Wired should know that,” Rayburn writes. He also says that although Google can cut its costs by peering with large ISPs, it’s not likely to strike similar deals with smaller providers.

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