Why the biggest names in streaming are hemorrhaging money—and why it will only get worse.
The Number They Don’t Want You to See
When Netflix, Disney+, or ESPN quotes you their streaming costs, they’re showing you the tip of the iceberg. The real number? For a major live event with 1 million concurrent viewers, traditional streaming costs approximately $200,000 per hour.
That’s not a typo. And that’s not even for the Super Bowl—that’s just a moderately popular live stream.
Let’s break down exactly where that money goes, why it’s unavoidable with current technology, and why the entire streaming industry is built on a foundation that mathematically cannot scale.
The Anatomy of a $200,000 Hour
Raw Bandwidth: The Obvious Cost
For 1 million viewers watching a 1080p stream at 8 Mbps:
- Data transferred per hour: 1,000,000 × 8 Mbps × 3,600 seconds = 3.6 petabytes
- CDN cost at $0.05/GB: 3,600,000 GB × $0.05 = $180,000
But that’s just the CDN delivery. Add in origin server egress ($15,000), transcoding/encoding ($3,000), and infrastructure overhead ($2,000), and you reach ~$200,000 per hour.
The Dirty Secret: It Gets Worse at Scale
Here’s what the CDN salespeople won’t tell you: costs don’t decrease linearly with scale for live content. For on-demand video, cache hit ratios improve and costs per GB drop. But live streaming? Every single viewer needs the content right now. There’s no caching advantage. No efficiency gains. Just pure, brutal linear cost scaling:
- 10,000 viewers: $2,000/hour — manageable
- 100,000 viewers: $20,000/hour — expensive
- 1,000,000 viewers: $200,000/hour — crisis mode
- 10,000,000 viewers: $2,000,000/hour — mathematically impossible for most
Why This Problem Is About to Get Much Worse
CDN Prices Are Rising—For the First Time Ever
For 25 years, CDN prices dropped 5-10% annually. That era is ending. According to CacheFly’s 2024 analysis, we’re approaching the floor. Bandwidth costs have stabilized, but operational costs keep rising: energy costs (data centers consume 2-3% of global electricity), labor costs, and hardware (Moore’s Law has stalled).
Prediction: By 2025-2026, CDN prices will increase for the first time in internet history.
Resolution Demands Keep Growing
Your viewers don’t want 1080p anymore. They want 4K. Soon, 8K. At 8K, streaming a single hour to 1 million viewers would cost $2 million. For a 3-hour sports event? $6 million in delivery costs alone.
The Infrastructure Insanity
To deliver 1 million concurrent streams via traditional unicast CDN requires 5,000-20,000 edge servers, 500-2,000 active CDN locations, and 8+ Tbps of bandwidth capacity.
A CDN literally sends the same identical bits to the same neighborhood hundreds of thousands of times through the same wires. Imagine a mail carrier making a separate trip for each letter going to the same apartment building. That’s unicast streaming.
For a neighborhood of 1,000 households all watching the same game, the CDN sends 1,000 identical copies of every single frame, every single second. That’s 999 wasted copies.
Real-World Failures: When the Math Breaks
The streaming industry’s dirty secret is that major events regularly fail. Not because of bugs or bad planning—because the underlying architecture cannot handle the load:
- HBO Max, Game of Thrones Finale (2019): Crashed. Millions couldn’t watch.
- Disney+ Launch Day (2019): Hours of outages.
- Every Major Boxing PPV: “Technical difficulties” are now expected.
Even Amazon—which owns the infrastructure—crashed their own AWS re:Invent conference stream. If Amazon can’t stream reliably using their own servers, what chance does anyone else have?
The Math That Changes Everything
Consider two approaches for serving 1 million live viewers:
Traditional Unicast (CDN)
- Viewers: 1,000,000
- Network Load: 8,000,000 Mbps (8 Tbps)
- Cost: $200,000/hour
- Scales: Linearly O(n)
Multicast Architecture
- Viewers: 1,000,000 (or 10M, or 100M)
- Network Load: 8 Mbps (replicated at network level)
- Cost: $200/hour (fixed infrastructure)
- Scales: Constantly O(1)
That’s not a 10% improvement. That’s not even 10x. It’s 1,000x more efficient.
The Path Forward
The technology to solve this exists. It’s called multicast, and it’s been powering broadcast television since the 1950s. The challenge has been bringing it to IP networks in a way that’s practical, secure, and compatible with existing infrastructure.
That’s exactly what we’ve built at Viewcast. Our SmartCast technology delivers live streams using true multicast principles—one stream serves unlimited viewers, with fixed infrastructure costs regardless of scale.
No more $200,000 hours. No more prayers that your CDN holds up. No more choosing between quality and profitability.