Of course they are not paying $120/TB like AWS public pricing
I heard they are paying something between $0.20 (eu/us) to $10 (exotic) per TB based on the region of the world where the traffic is coming from
I heard they are paying something between $0.20 (eu/us) to $10 (exotic) per TB based on the region of the world where the traffic is coming from
They're likely paying even less. $0.20/TB ($0.0002/GB) is aggressive but at their scale, connectivity and per-machine throughput, it's lower still.
A few points to take home:
- They [Netflix, YT, etc] model cost by Mbps - that is, the cost to deliver traffic at a given peak. You have to provision for peaks, or take a reliability/quality of experience hit, and for on-demand video your peaks at usually 2x your average.
- This can effectively be "converted" into a $/TB rate but that's an abstraction, and not a productive way to model. Serving (e.g.) 1000PB (1EB) into a geography at a peak of 3Tbps per day is much cheaper than serving it at a peak of 15Tbps.
- Netflix, more so than most others, benefits from having a "fixed" corpus at any given moment. Their library is huge, but (unlike YouTube) users aren't uploading content, they aren't doing live streaming or sports events, etc - and thus can intelligently place content to reduce the need to cache fill their appliances. Cheaper to cache fill if you can trickle most of it during the troughs as you don't need a big a backbone, peering links, etc. to do so.
- This means that Netflix (rightfully!) puts a lot of effort into per-machine throughput, because they want to get as much user-facing throughput as possible from the given (space, power, cost) of a single box. That density is also attractive to ISPs, as it means that every "1RU of space" they give Netflix has a better ROI in terms of network cost reductions vs. others, esp. when combined with the fact that "Netflix works great" is an attractive selling point for users.
The inbound data stream to fill the cache of the appliance is rate limited and time limited - see https://openconnect.zendesk.com/hc/en-us/articles/3600356180... The actual inbound data to the appliance will be higher than the fill because not everything is cached.
The outbound stream from the appliance serves consumers. In New Zealand for example, Netflix has 40Gbps of connectivity to a peering exchange in Auckland. https://www.peeringdb.com/ix/97
So although total Netflix bandwidth to consumers is massive, it has little in common with the bandwidth you pay for at Amazon.
Disclaimer: I am not a network engineer.
Amazon and most Cloud providers do overcharge for b/w. You can buy a OVH/Hetzner type box with a guaranteed un-metered 1 Gbps public bandwidth for ~ $120/month easily, which if fully utilized is equivalent 325TB / month or $3-4/TB, completely ignoring the 8/16 core bare metal server and attached storage you also get. This is SMB/ self-service prices, you can get much deals with basic negotiating and getting into a contract with a DC.
One thing to remember though not all bandwidth are equal, CSPs like AWS provide a lot of features such as very elastic scale up on-demand, a lot of protection up to L4 and advanced SDN under the hood to make sure your VMs can leverage the b/w, that is computationally expensive and costly.