YouTube’s Bandwidth: Cheap, But Not Free

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cablesHow 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.    

Peering allows two providers exchanging large volumes of traffic to save money by connecting directly, rather than routing traffic across their paid Internet connections.  Peering is often free as long as the amount of traffic exchanged is not out of balance, providing substantial cost savings for bandwidth for high-traffic sites and networks. 

Michael Masnick from TechDirt is also skeptical of the notion that YouTube pays next to nothing for bandwidth. “I’m not sure I believe that either, but at the very least, it points out that there’s a lot more to consider here than simply extrapolating out the number of videos times the basic cost of bandwidth,” Masnick writes. 

Google doesn’t share numbers on its costs, but a recent blog item suggests that it’s not losing money on its video infrastructure. “The truth is that all our infrastructure is built from scratch, which means models that use standard industry pricing are too high when it comes to bandwidth and similar costs,” write YouTube’s Chris Dale and Aaron Zamos. “We are at a point where growth is definitely good for our bottom line, not bad.”

About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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10 Comments

  1. If this is the case then 'hats off to them'

  2. They should be charged in my opinion.

  3. If you have to buy dark fibre and lay out billions for infrastructure to get free bandwidth it isn't really free is it? Everyone in this industry needs to amortize cap.ex to really understand costs.

  4. Own data centers, own fibre cables, own ISP networks... I think YouTube not only not pays for bandwidth, but also gets income from every consumed bandwidth, because all Google's investments was spent for creating infrastructure, which also can serve to Google for (1) maintaining other projects; (2) for selling its odd resources.

  5. I'm sure Google made a calculated investment in the correct infrastructure in order to achieve minimal costs. You have to applaud them.