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A Pricing Guide to Online Video Delivery and Storage

If you are new to delivering content online and have no traffic data, it’s a bit of a guessing game. Service providers typically won’t cut you any discount up front, since they have no idea if you’ll be a "$500 a month" customer or a "$5,000 a month" customer who should get discounted pricing. To a new customer, I suggest not committing to anything. Sign a three-month deal, test the waters, see what type of traffic you do, and then decide if you should sign a long-term deal that gives you a break on pricing. This also offers an opportunity to test the service provider and rate their customer service and products, such as the reporting data they provide.

Regional service providers tend to be a lot more flexible than the large CDNs in terms of your monthly commit and, in many cases, require no commit at all. It’s easier for them to do this since they know that chances are you are not going to be doing a large amount of delivery to start with.

When pushed, most providers will allow you to commit to bandwidth on a quarterly rather than monthly basis. This will help level your quarterly commit rate if you have one low month and one high month in the same quarter. If you are doing more than 10TB a month, the service provider will probably be willing to do a quarterly commit contract and, if they want your business badly enough, you can get this type of arrangement for even smaller deals. Again, for smaller delivery needs, it’s easier to negotiate with smaller service providers as they tend to be more flexible and many times have delivery packages you can buy for a flat fee per month that include a certain level of storage and delivery.

Your monthly bandwidth and storage volume are not the only factors vendors use to determine pricing. The length of the contract, geographic location of the content delivery, and, of course, anything unique to your business are other factors taken into account. As always, my advice when dealing with vendors is to shop around, get references, ask about customer service, and—most important—don’t buy on price alone. The delivery space is so consolidated these days that you can very easily get four or five quotes from vendors all in the same day.

It is also important that you make sure the vendor educates you and answers any questions you have with answers you can understand. If you don’t understand any aspect of content delivery, such as calculating bandwidth and storage volumes or how to link to the video files you have, and the vendor does not seem like they have the time to educate you, or chooses not to, then it’s time to move on, no matter how good their pricing may be.

How Much Should You Pay?
So let’s jump to what you really want to know. What should you be paying for online video delivery and storage? While pricing varies based on commit and other requirements, the average going rates for a 12-month commit of delivery with CDNs are as follows. For 10TB a month the price is between $0.80–$0.95 per GB. For 25TB a month, typically it is in the $0.70 per GB range. At 50TB per month, you should expect to pay roughly $0.55 per GB. At 100TB pr month, prices really do vary widely, but the average is about $0.29 per GB, though it can be as low as $0.19 per GB. Again, this is for very simple and straightforward content delivery services, not for anything that has custom requirements.

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