[TomGullen]

I'm struggling to see why bandwidth is costing you so much. We have a dedicated server with 10tb bandwidth on 1gbps port for under $100 a month.

Also, if the podcasts are failing they can't be using much bandwidth? I think this is cognitive dissonance, you're complaining about free users costing you a lot of money in bandwidth yet apparently they are all failing (very few listeners?)

[herge]

I wonder if instead of having 90 free days, he capped the free trial based on bandwidth. The more popular the podcast, the more bandwidth it would use, but the more likely the podcaster has revenu from ads which would scale (sub-linearly!) with the bandwidth costs.

Anyone could try it out with a small or starting podcast, but would have to pay out once it became popular.

[derickbailey]

I'm serving files from Amazon S3. This gives me the benefit of world class storage and streaming, without having to own / run the servers myself. Bandwidth from them is "cheap" at $0.12/GB... but with an average podcast of 30 minutes being 25meg file, an episode with 1,000 downloads is 2.5GB of bandwidth.

i have a customer that averages 20,000 downloads per episode, and a bunch of others with close to 1,000 downloads per episode. it adds up fast.

[thejosh]

Right, but if you go with a "budget" dedicated supplier of dedicated servers for cheap (probably based out of EU such as Hetzner/OVH) or out of the US (through someone who provides "unlimited" bandwidth), have everything through s3 as a backup incase the server has any issues, you will be able to save money.

25 meg downloads don't last very long, so the very worst is that your gigabit pipe gets caught for a bit - hell even a company like Linode does 2GB out for $160/m :).

S3 is very expensive for what you are doing, saying you don't need to own/run servers for things like a podcast is just pissing money into the wind.

[derickbailey]

"saying you don't need to own/run servers for things like a podcast is just pissing money into the wind." - that's probably true. i may end up doing something like your suggesting in the future. right now, the streaming side of things is not something i want to concern myself with. i have other things that need my attention.

linode's $160/mo plan would cover me for a while. i'm transfering around 4TB a month right now, and that would cover 16TB.

thanks for the feedback and suggestions! this is something i'll need to keep in mind in the near future.

[thejosh]

We might come across as brash, but we really want everything to succeed. :)

[adventured]

This is strictly an opinion, but I think your pricing is way off.

The Pro account should be $9 or $10. You should move to dedicated server hosting, or to perhaps Linode, and drastically reduce your cost basis and dramatically improve your value proposition. 250mb of storage is nothing for $19 / month. The numbers just seem out of whack. Shouldn't customers easily be able to store a huge number of podcasts, given how cheap storage is? Store and forget. You want their content on your servers, all of it. For $99 / month I better get a terabyte of storage these days.

Slash your costs to the ground. Boost your value proposition to the sky. Dramatically increase how many podcasts customers can store on your service. You want them to stream your brains out, and you want it all to happen with bandwidth rates around $0.01 or $0.02 / gb.

With scale, and lots of usage, expand what services you offer to customers. Storage & streaming are commodities, so treat them accordingly, and instead focus on building a customer base with modest margins on the core, with an eye on what you can do with all those customers over time.

By going with the easy AWS solution, you're pinning yourself into a very tight corner on costs.

Again, all just an opinion.

[programminggeek]

I'm pretty sure the pricing was somehow related to libsyn's pricing: http://www.libsyn.com/plans-pricing/

Also, while I 100% agree on lowering costs, I think the idea of lowering pricing is foolish. I don't think cutting price in half is going to more than double sales. In fact, with as small as his sales likely are, it's very likely that he could stand to double the lower end plans. Something more like $25/$50/$100 might be more appropriate.

Podcast hosting is a very small niche. It's not wordpress hosting where there are millions of potential sites. You're talking about potentially thousands of customers total in the marketplace. Now, even at 10% of 1,000 potential customers you're talking about 100 potential customers. At $9 a month that's $900 a month, which is not a lot frankly. At $25 a month you're at $2,500 a month which still isn't great but it's somewhat interesting and something you can at least reinvest in customer acquisition.

At even the top end plan $100/month is going to need 100 customers to get to $10,000 which is probably salary replacement level after taxes for one developer, depending on where they live. Realistically, if the average customer pays $20, that means you need 500 customers to get to the same outcome.

If the company gets 10 sales a month and has 0 churn it is going to take approximately 4+ years to get to 500 customers. Figuring on a reasonable churn rate, it's more like 5 or more years at $20/month to get to $10,000 a month.

Now, if you are starting a podcast hosting company on the side, do you want it to take you 5 years to get to income replacement? I wouldn't.

As a comparison, it took the fairly successful time tracking app freckle 5 years to get to approximately $38,000 MRR with much better pricing. I estimate they have around 500 customers based on their $79/mo. plan. http://unicornfree.com/2013/5-years-of-saas-growth-every-mon...

So, unless this guy becomes a lot better at running his app than other SAAS operators have historically been, it could take 5 years to get to 500 customers paying $20/month. And the outcome would be about 1/4 of the revenue of freckle.

The math behind lowering your price rarely works out in terms of getting you enough extra customers to cover the revenue/profit difference.

[nkozyra]

Without exploring what you do too deeply, is there a way for you to monetize the freemium/free trial accounts? Can you apply some advertising to them automatically unless/until they upgrade?

[TomGullen]

I know Cloud is appealing for the scaling side of things, but you could save a lot of money using dedicated servers from other providers. Something to consider anyway.

[billmalarky]

What host are you using?