[moe]

Combine the two of these and you'll get roughly a 100x cost saving over dumping a JS function into Amazon Lambda.

And then move it off EC2 onto dedicated hardware and you'll see another ~30x cost savings.

Running a permanent transcode cluster on EC2 would be rather insane. Hetzner rents you i7's for $50 per month, the EC2 equivalent (c3.8xlarge) costs $40 per day.

Yes you can cut EC2 cost with spot-instances, but at least in our case that would still have been significantly more expensive than just renting some scrap metal.

If you need cheap, disposable compute for semi-predictable loads then the Hetzner flea market (yes, they really have one!) is hard to beat on bogomips per dollar.

[nostrademons]

Yeah, dedicated is definitely the way to go if you can afford the ops staff. Actually, if you're really big and can afford the hardware engineers, building your own DCs and computers is the way to go. I've seen the profit margins of some major cloud providers; they're insane. About the only industry more profitable are the telecoms.

I was targeting my comment toward a startup that'd likely be building a product like the OP suggested, though, with maybe a dozen devs who are all generalists. Setting up a bunch of EC2 instances to pull videos out of SQS/S3 and run them through ffmpeg is something an ordinary full-stack developer can do in a morning, and scaling it up just involves clicking a button. Running and scaling a dedicated server farm reliably usually needs a dedicated ops person to keep it all working.