I have the feeling that if you drive down the cost of bandwidth, the businesses that rely on it will say "Thank you" and change nothing, merely pocketing the bigger margin themselves.
The number of ads isn't proportional to bandwidth cost, it's about what their research shows they can get away with.
High bandwidth costs are an advantage for big players like YouTube because their economies of scale allow them to pay less than smaller competitors. The more bandwidth costs the bigger their advantage.
Lower bandwidth prices would both increase service provider competition and decrease costs. The provider competition would then push the cost savings away from providers and toward either paying creators more or attracting viewers by showing fewer ads (or both).
It might not solve the entire problem but it would certainly be a step in the right direction.
The solution to that is more regulation to foster competition. Break up the giant monopolies and the market will naturally improve, and life will get better for everyone.
I don’t really see how the cost of bandwidth is the main factor. What would change by lowering said cost? The corporations of the oligopoly would also benefit and I feel they would just have larger margins allowing them to keep their dominance.
I’m no expert though, so I’m more curious than in disagreement.
Bandwidth isn't really the problem. Vimeo exists, and they serve considerably higher bitrates than YouTube. The problem is that YouTube is entrenched, and has network effects on its side.
A fresh new competitor to YouTube would face a combination of a lack of advertisers, and a lack of content seeking ad-funding.
On the other hand, when it comes to pay-to-watch content, there's space in the market for new competitors to arise, as the network effects are less significant there.
I guess bandwidth costs are, in a sense, the problem. If if were easy to run a very-large-scale video-hosting site, that would help, sure. Ads wouldn't have to be worth much to make the business work.
Have you researched this, or are you making assumptions? Hosting videos is pretty cheap, and while getting the same amount of traffic as Youtube would get very costly very fast, it could also be very profitable if monetization is done right.
Plus technologies like PeerTube can significantly reduce bandwidth expenses if that's really an issue. Google wouldn't use something like that because the federation threatens their monopoly, but a competitor with a different business model definitely could make it work for them.
> Google wouldn't use something like that because the federation threatens their monopoly
They don't need to, they have caching servers on most ISP's internal networks. Popular stuff (that consumes most bandwidth) just needs to be sent once from the mothership.
A 10Gbit connection at HE is going to cost you roughly $2,000/month, or about $65/day.
That will serve your 49MB video roughly 2 million times a day.
Let’s go with 50% average utilization, and say that means we need to monetize roughly 0.0065 cents per view to cover the bandwidth cost.
I think YouTube charges something like 10 cents per ad view, but won’t charge if the user clicks Skip in that 5 second window. I’m not sure what percent of views result in a billable ad, but anecdotally I’ve heard it’s surprisingly high.
I would assume storage is a much bigger cost factor, to say nothing of paying the engineers to develop and support the infrastructure.
I don't think that's quite right. 1TB/mo of CloudFront bandwidth is $90/mo (per [1]). Also, that's the on-demand price. The price with volume discounts is much lower.
Honest question: why not just write "I work for Google" instead of asking people to click through first? It's not significantly longer if that's what you're trying to avoid.
This will not help any competition. Google has its caches and own fibers all over the world. I can go and connect now in any IX and most data centers with Google AS and exchange traffic for free, which makes Google cost of bandwidth to most consumers in developed countries almost non-existent.
Good luck competing with that as a startup. Google is using this infrastructure not only for Youtube. So unless you have billions to invest in your own infrastructure, Google will always have cheaper bandwidth than you.
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