I don't like this reasoning because I've seen the inside of google. Their bandwidth is very cheap.
What costs is having a CDN, a bunch of very fast servers that exist in every point-of-presence, given the load they endure CDN cache servers fail quickly when compared to others. -- along with the upkeep of their networking equipment, which is cheap but not free.
But Google itself has invested wisely in how it connects to the internet, they are dark fibre all the way with many hundreds of gigabits between sites and pops. It's a huge upfront investment (the kind SV startups seem to hate) but the long tail makes bandwidth essentially free.
The only cost they have is hardware and peering, and given their size I can't convince myself if they are or are not being shafted financially by big ISPs for peering - even if they are though, it's marginal compared to what GCP/AWS/etc; charge us, even Colo datacenters will charge significantly more than what it costs Google.
Thanks, this is exactly what I was wondering about. I would expect Google's marginal cost of bandwidth to be approximately zero. What are networks going to do, not connect to Google?
And to be clear this is literally what happened to Netflix and I think YouTube and a few other sites in the pre-Net Neutrality days. Of course we don't have Net Neutrality anymore either, so presumably Google is paying ISPs not to throttle, or ISPs are content with the 1TB/month cap they tend to have.
Also, that 1TB/month cap is just foot-in-the-door technique. It will stay 1TB or so as videos, games, websites, etc. continue to get larger and larger and then they will lean on Appeal to Tradition (logical fallacy) when people complain that 1TB/month isn't adequate.
That kind of reminds me of the Monty Python skit where two mafiosi try to shake down the army. Why in the world would Google pay up? Your average ISP needs YouTube to work well far more than Google needs one ISP.
What costs is having a CDN, a bunch of very fast servers that exist in every point-of-presence, given the load they endure CDN cache servers fail quickly when compared to others. -- along with the upkeep of their networking equipment, which is cheap but not free.
But Google itself has invested wisely in how it connects to the internet, they are dark fibre all the way with many hundreds of gigabits between sites and pops. It's a huge upfront investment (the kind SV startups seem to hate) but the long tail makes bandwidth essentially free.
The only cost they have is hardware and peering, and given their size I can't convince myself if they are or are not being shafted financially by big ISPs for peering - even if they are though, it's marginal compared to what GCP/AWS/etc; charge us, even Colo datacenters will charge significantly more than what it costs Google.