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Used VPN for cheaper YouTube Premium? Congrats, your subscription has been canceled
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this post was submitted on 19 Jun 2024
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Except the hardware is purchased using a global framework contract that uses the volume as a reason for deep discounts.
It gets put in a rack by a local guy and then remotely provisioned by some person from a low cost country.
Electricity in datacenters is purchased at wholesale prices and muchuch cheaper than what consumers pay...
The list goes on and on.
The higher prices in countries has only very marginally to do with the higher costs.
Money grabbing corporations will charge what the market will bare.
Without violating my NDA with media companies (YouTube being one of them, incidentally), all I can tell you is you’re wrong about these. I’ve been in this exact sector for over a decade and the operating expenses are much higher comparatively speaking, and the objectives are different depending on region.
If you’re so inclined to pay the discounted rate, make the narrative work so they have no way of flagging you. Otherwise don’t be surprised if you’re asked to pay local rates.
So, where does it differ? Cost of hosting the machine and the data?
On purchasing servers; I don’t know about Google specifically, but most media partners I’ve worked with doesn’t have global acquisition as an option for hardwares — not because they don’t have the purchase power/volume, but rather the vendors have region specific distributors with their own sales teams and pricing. Even if you have the personal contacts of VPs high up the chain, someone from IBM China cannot even sell to companies in Canada, and vice versa, for example.
On people side of things… With YouTube specifically, you’re also not only dealing with their own DC but getting their hardware into local ISPs centres. Logistics around that is not something cheap remote labor can arrange, need actual boots on the ground to facilitate.
Ad sales is also something that’s kind of localized. YouTube has American teams selling American creator inventories for example. Not something that’s outsourced out.
So yea… Although from the outset it’s all just “YouTube.com”, there’s actually a lot of localized touch points that creates different costs to provide service in different regions.
When I did it before, our company bought the hardware in bulk. We prep it, provision it and have it good to go. Then ship it off to wherever. PM has the local DC staff (if they provide that service, else a local IT company install the box and bring it online. The moment it is online everything is managed remotely. The local install costs is usually a few 100, once, just like the shipping.
We even shipped full racks (assembly required) with a complete connection diagram. All it needed was power and 2 internet cables everything else was done already.
If companies like google expand, this will surely be similar. But then at even larger scale. I cannot imagine them going around trying to find equipment everytime. You just have a contract with dell/HP/IBM/NetApp/Oracle and ask your account manager to ship you x number of type A server.