[jcanyc]

First consider thumbnailing these in the fly as they're requested by the user. But if you must mass convert them, this job must be parallelized among many compute nodes; overly tuning the processing of each conversion probably won't be very fruitful.

You probably want to move these images to AWS S3 and run compute jobs and upload the resulting images back up to S3. You could create AWS Simple Queue Messages with the S3 URLs of each of the images and pop messages and autoscale EC2 instances based on the depth of that queue. What's the plan for these files after they're processed?

I am local, have deep AWS experience and have next week off if you'd like some pro bono advice.

50TB S3 ~$1500/month SQS ~$0.50/million messages