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Cost Analysis

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ajbrown edited this page Sep 13, 2010 · 2 revisions

Content Ingestion & Delivery

Things not considered:

  • Amazon charges for requests to s3 as well. Those fees are insignificant for the purposes of this document, though. They should be considered in a final cost analysts, however.

Minimum Cost of Content

Realistically, BitNotion once the site gains some popularity, bitnotion will surpass the first pricing tier of Amazon. however, in order to predict worst-case costs, we’ll use the most expensive pricing tier.

Amazon Costs:

  • Storage: $0.150 per GB – first 50 TB / month of storage used
  • Transfer In: $0.100 per GB – all data transfer in
  • Transfer Out: $0.170 per GB – first 10 TB / month data transfer out
    .

Minimum Transfer:

  • IN upload master audio file
  • IN upload master cover art
  • OUT retrieve master audio file for encoding
  • OUT retrieve master cover art file for encoding
  • IN upload preview files
  • IN upload purchasable MP3
  • IN upload tagged master WAV file
    .

Assumptions:

  • 1 minute WAV = 7mb
  • 1 minute MP3 = 1mb
  • 1 Release = 70minutes
  • Total Cover Art JPGs = 7mb
    .

Minimum Cost Per Year Per Release:

  • Storage: 700mb WAV + 70mb MP3 + 70mb Previews + 7mb ART = 847mb
  • Transfer In: 700mb WAV + 7mb ART + 70mb MP3 + 70mb Previews + 700mb WAV = 1547mb
  • Transfer Out: 700mb WAV + 7mb ART = 707mb
  • Total: $1.488 storage + $1.812 in + $1.408 out = $4.708 per year

This represents the minimum costs per release, if that release was only encoded and stored, and no previews were ever transfered, nor any purchases made, and the track was never re-encoded.

Cost of Delivery

The cost of delivery is totally elastic based on the popularity of the release. For this analysis, we’ll use theoretical sales numbers, and theoretical conversion ratios.

Assumptions:

  • 1,500 downloads (purchases) in a single year. Each user downloads the master audio file.
  • 250:1 preview to download ratio. The average user previews 2 minutes of each track. (Note: each minute will be estimated as 1mb)
  • All users purchase the entire release. This is not realistic, but makes analysis easier.
    .

Cost of Delivery:

  • Downloads: 1,500 x ( 700mb + 7mb ) = 1035.644 GB
  • Previews: 1,500 × 250 × 20mb = 7324.218 GB
  • Grand Total Cost: $1,421.176
  • Cost Per Sale: $0.94

Note that this is per release, not per track.

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