In 2008, I'm impressed with any online video company barely breaking even. I figure today's ventures are just attempts to build a brand in anticipation of when costs come down and profitability is realistic.
I just reran the numbers a bit through S3 calculator and came up with 780K per month at that traffic level, so costs are already dropping but still not a very big profit margin, and that is assuming you can put ads on all your videos and you get to keep the entire 1$ CPM.
And if someone puts any ads on my family birthday videos I'll be irked.
I assume Google can do this cheaper than your S3 calculations. Amazon still needs to make a profit on the hosting so I assume their actual cost of providing the service is much lower. I'm not sure exactly how much lower since I don't know Amazon's margins. Anyone care to take a guess?
Not entirely sure Amazon makes a profit on S3. They might be offering it at a price lower than cost too, to establish themselves trusting costs to go down.
