Hacker News Reader

Comment by ciupicri | Hacker News Reader

Yet Netflix migrated to Amazon and I think that it has way more than 150 machines.

Yes they did. And that is a really great exercise in thinking about what their profitability would be like if they were structured more like YouTube in terms of their server infrastructure.

But to the point of many other folks here, if you're all cloud you can really shrink fast if you need too. Lose a millions customers? No problem, just drop some machines. Any business that can price into the monthly customer fee the marginal monthly cost of AWS to support that customer, can keep their costs flat when their customer counts vary. Someone with dedicated hardware is still paying the bills for it, even when their customers leave.

I am not sure I'd agree that Netflix could've been more profitable if they went with their own DC. I think Netflix does not utilize that much hardware. Their streaming is on their own CDN, which I heard that are placed directly in the big cable companies' DC. Tracking and storing user profiles and other meta data would not require a huge amount of hardware. I think Netflix also does quite a bit of video encoding and analytics, but these workloads would fit well with EC2.

That would be the thing right? Clearly they can compute their marginal cost per subscriber, and they know what the lifetime value of a subscriber is, so they budget what to spend on EC2 infrastructure and movies at Sundance and still meet their net income goals. They would also know how much difference it would make if they needed to add or reduce their EC2 footprint.

Sadly I don't expect them to share what those costs are. I have always felt that Amazon could, in theory, always out compete with NetFlix with their Amazon Prime Video because they would only have to charge the marginal rate for the hardware. However to date it seems like the content contracts have kept NetFlix on top.

I have to think they're getting a deal.

Which should be expected when buying in bulk.

that would be fun to calculate

Plus, they're the number one poster-child for AWS. Netflix running on AWS makes AWS safe for CTOs everywhere. So, yeah, they're definitely getting a deal.

Reply on news.ycombinator.com