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Don’t pay to play

4 September 2019, Written by 0 comment

Don’t pay to play!

And how you can save money by switching to Jet-Stream Player.

(hint: paying for traffic is much cheaper compared to paying for plays, you get better analytics and you’re not leaking data to third parties anymore).

An introduction to streaming costs

Besides media production costs, most of the costs in professional streaming are recurring and scale along with the number of views. The more viewers you get, the more traffic you consume, the higher your streaming bill is. Fortunately, traffic prices are very low, and the more volume, the lower the price per GB gets.

If you make enough money from videos, these traffic costs are fine. If you, for instance, can make a few dollars per 1000 viewers out of ads, or if you have a paid video service, you will have a positive business model. However, many video publishers don’t make money from video, and ad revenues are under pressure.

So cost management is key to anyone in the professional (volume) streaming business. What doesn’t help is that players and online video platforms also charge costs for their services that also scale along with your volume.

Video players and platforms are expensive

In the past, you could license a video player for a fixed price and use it unlimited, and only pay for streaming traffic. In the past years, we have seen player vendors and online video platforms switch to a cost per 1000 views business model. Interesting for them, but it is a burden for the streaming publishers since pay per play is in general more expensive compared to paying for traffic.

Being a streaming services provider, we used to license video players for our customers. But more and more customers started to complain about the player costs exceeding their traffic costs.

It doesn’t really make sense that player and OVP costs scale up with the volume of viewers. Traffic scales, so traffic costs scale, but for a software tool that is developed once and doesn’t need that many operational efforts? 

The most used argument by video platforms for asking a cost per 1000 views is analytics: the more viewers you have, the more data they need to process and analyze.

Player side analytics are crippled

There is a problem with video player vendors and OVP analytics: they are client-side based. Nowadays roughly 20% of video viewers use tracker blockers, so you miss 1 out of 5 viewers in your reports when using player-side analytics. It means that you can only measure and report 80% of your audience to management and advertisers. Whoops.

Cloud side logging and analytics

So we at Jet-Stream said: hey, we already do server-side analytics. Which are unblockable. You can’t block our servers from logging streams we send to the viewers. Our analytics are accurate, while the analytics of player / OVP vendors can’t see 20% of the views because of the tracker blockers. We designed our analytics to be fully GDPR (privacy laws) compliant. 

Get rid of the trackers, get rid of the costs

In short: we don’t need to put trackers in video players. Not for analytics, also not for our business model. The audience doesn’t like trackers anyway.

So if we don’t need analytics from the video player, we can cut away most of the operational costs. Gone is the argument for a recurring fee for a video player! Gone is the pay per play business model 😉

Introducing Jet-Stream Player

All we had to do is build a free video player that offers all the cool and necessary features our professional customers need. Which we did. 

We developed Jet-Stream Player together with our customers who beta tested it for months. After that, we quietly replaced licensed players with our own player for all other customers. They did not notice the difference. Well, it’s faster.

Customer costs went down, dramatically. With some customers, total cost of ownership for streaming dropped by 50%. They either saved money or invested in higher quality content. 

Comparison: pay-per-play vs traffic

It’s always dangerous to do a one on one comparison since there will always be exceptions. But to give you some indication of the cost differences between player / OVP service providers and the Jet-Stream platform plus player, we calculated some examples. Comparisons are based on average video size and duration. Note that some player vendors apply caps on both views AND on traffic, which is extra costly. 

Streaming costs: Pay per Play vs traffic model

Use case 1: Small company with 100.000 views per month
Player / OVP: 100.000 plays * €1 per CPM = €100 per month 
Jet-Stream Player + Platform: 1TB traffic = €99 per month

Use case 2: Mid sized publisher with 5 million views per month
Player / OVP: 5 million plays * €0,50 per CPM = 2500 per month
Jet-Stream Player + Platform: 35TB traffic = €1250 per month

Use case 3: Broadcaster with 25 million views per month
Player  / OVP: 25 million plays * €0,25 per CPM = 6250 per month
Jet-Stream Player + Platform: 175TB traffic = €2750 per month

If you want us to help you with calculations, call our team of streaming consultants at +31508003311 or email sales@jet-stream.com. We can give you a demo of our entire platform and a free login too. If you need us to add specific features to the player, let us know too. 

Consolidation

Basically what is happening in our industry, is consolidation. The market is mature and saturated. We used to have generic CDNs, video platforms, and player vendors. 

In order to find growth, we have seen player vendors become video platforms and we have seen video platforms offer integrated CDN services. 

We at Jet-Stream see ourselves primarily as a high-end streaming specialized CDN at competitive rates, offering a killer combination of streaming workflow and advanced MultiCDN features. 

With the addition of Jet-Stream Player, we are moving upwards into the value chain, innovating to add to this competitive landscape. We are challenging the business model of pay per play vendors. And most important of all: let’s stop tracking and leaking data: it’s bad. 

Don’t pay to play, check out Jet-Stream.com/player 

Stef

Stef is the founder of Jet-Stream and pioneered one of the very first webcasts in 1994. Yes, it means he is at least 27 years old. He says 😉