CASE STUDY: Comparison of in-house encoding costs vs. cloud encoding costs for 2 scenarios

In-house Fixed Costs: Assuming you manage a high-volume video operation. You might oversee a User-Generated Video (UGV) site ingesting and transcoding 1,000 videos per day. Or, you run an original content site with an existing multi-terabyte library that you want to bring online, and then have an ongoing need to encode 30 long-form videos per day. In either scenario, if you manage your encoding in-house, there are basic fixed costs to support your requirements:

• System Administration (Role: install, maintain, configure core server software and encoding software; Time: ¼ FTE = $20,000)
• Web Developer (Role: manage encoding process, job management and integration; Time: 1 FTE = $60,000)
• General Purpose Servers: 5 servers @ $600 per server per month = $3,000 per month
• Encoding Software Licenses: $0 (using open source), $3,000 per server per year (using On2 Flix)
• Bandwidth: In = $0; Out = $0.50

Total Annual Cost = $116,000
Total Annual Cost (with On2) = $131,000

Scenario 1: You manage a UGV site that ingests 1,000 videos per day with an average input size of 30MB, and need to encode for 2 output renditions. Including $3,780 in bandwidth costs, your annual cost will be approximately $119,780 using open source or $134,780 using On2 Flix.

Utilizing cloud-based transcoding, your estimated annual cost will be $28,530.

Scenario 2: You manage an original content site that will bring online a 2TB archived library and then project encoding 30 long-form videos per day into 6 output renditions. Including $10,800 in bandwidth costs, your annual cost will be approximately $126,800 using open source or $141,800 using On2 Flix.

Utilizing cloud-based transcoding, your estimated annual cost will be $85,640.