AfterDawn: News

Netflix pays 2.5 cents per movie streamed

Dan Rayburn of StreamingMedia has updated his report on Netflix streaming costs, and it appears that the company's direct costs fell by 50 percent since the end of 2009.

In all, the company will pay just $50 million in 2011 to CDNs for delivery of the video.



As 2009 came to a close, Netflix was paying around 5 cents for every streamed movie, but that cost has fallen to 2.5 cents. The post explains:

While most video contracts with third party CDNs are typically priced on per GB delivered model, Netflix and other large content distributors usually pay the CDNs on a per Mbps sustained model. They pay not for the total number of bits they transfer each month, but rather the total amount of bandwidth they peak at each month, a pricing model also referred to in the industry as 95/5. This means that a customer can burst above their committed rate of Mbps less than 5% of the time with no penalty, but once they go over that, they pay for overages.

The average Netflix user streams at 2Mbps, in 480p or 720p quality.

Written by: Andre Yoskowitz @ 17 Mar 2011 1:26

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• 5 comments

• KillerBug

  Amazing...and I was sure they were losing money on me, but all that streaming I do only cost them about $3 a month.

  17.3.2011 04:28 #1

• slackdast

  Funny how it cost 2.5 cents to stream 1-2 gbs worth of a movie, yet the ISP are putting data limits and charging huge amounts when you go over.

  17.3.2011 09:59 #2

• scorpNZ

  Originally posted by slackdast: Funny how it cost 2.5 cents to stream 1-2 gbs worth of a movie, yet the ISP are putting data limits and charging huge amounts when you go over.
  
  Well at least someone finds it amusing that we all get ripped off :p
  

  17.3.2011 13:37 #3

• KillerBug

  We don't all get ripped off...neither my home internet nor my mobile have limits.
  

  
  

  18.3.2011 06:19 #4

• mscritsm

  So the company which uses 20% of all bandwidth during prime time only gets charged $50 million per year? Ridiculous! Obviously we end-users are the ones keeping the internet going.

  29.3.2011 11:32 #5