I'm more interested in how imgur survives since they serve up far more bandwidth that reddit does and their own advertising and community efforts are pretty young relatively, not to mention hotlinks bypass that entirely.
Imgur uses the free/extremely cheap CDN Cloudflare. Same with 4chan. The vast majority of Imgur's content gets served at the CDN layer so Imgur doesn't have to pay for that bandwidth.
moot (of 4chan) said a while back that Cloudflare is one of the main reasons 4chan is still around these days.
CloudFlare told me that using them to host images/media isn't allowed. That they do the CDN bits for websites, but not to do excessive non-webpage stuff. Their ToS says something like that.
CDNs don't host the files, your servers do. They cache copies of the files across their CDN network and serve the files from their cache until the cache expires, then they go and get the file from you again to rebuild their cache.
As a practical example, you might have an image on your webserver. When it goes viral on reddit, the request for the image hits the CDN first, not your servers (that's why they call it reverse proxying), they see that they don't have a cached version of the file, or their cached version has expired, so the CDN sends a request to your server, copies the file, and then proceeds to serve that file from their cache for the next million user requests or until the cache is set to expire (usually 24 or so hours, more than long enough for the traffic hitting your image url to die down).
Basically, the CDN made it so your actual servers (and thus your host bandwidth bill) served one request. Not 1 million requests.
Now typically you will foot the bandwidth bill for the CDN as well, but Cloudflare has a tiered pricing structure that is well below the rest of the competition. See moot (owner of 4chan) talk about cost savings here: https://news.ycombinator.com/item?id=6682324
There must have been some misunderstanding/miscommunication, if not then Cloudflare has pivoted their business significantly from what my understanding of it was (granted I haven't researched them in over a year).
Media is the primary purpose for CDNs. The performance boost comes from a global network caching the media files so when requests are made for the resources, the end user downloads the media from the nearest CDN node instead of your server that is potentially on the other side of the world. It doesn't matter quite so much to have non-media (such as the page html) served locally because the size of an html page is generally significantly smaller than the media embedded in the page.
From the small amount of research I've done on the Cloudflare service just now, it doesn't seem very transparent how exactly it works. I've found information on 4chan and imgur using them to serve billions of CDN requests, but others saying don't rely on their CDN. So who knows, maybe it's on a case by case basis.
...Additionally, the purpose of CloudFlare's Service is to proxy web content, not store data. Using an account primarily as an online storage space, including the storage or caching of a disproportionate percentage of pictures, movies, audio files, or other non-HTML content, is prohibited...
As far as I can tell they go by intent. Hosting a few images and videos for your page is one thing. Hosting an imageboard or video streaming site is another.
Bandwidth have been going down for years. I don't think they release numbers but the community in imgur is pretty active. There's a lot of people browsing imgur directly (they have a voting system, comments...) and know nothing about reddit.
They have a lot of direct traffic to compensate for the cheap hotlinking.
I think your blog post was bad. First of all, they have really unobtrusive advertising so it's a non-issue to start with. Second of all, it's their money paying for the traffic so how they choose to respond to HTTP requests is up to them. If people don't like it, they stop using imgur. If people don't mind, all is ok, imgur get their revenue and users get their cat pics.
Not to mention a surprisingly large amount of people don't know what Reddit Enhancement Suite is - so they're going directly to the Imgur page when viewing.
I constantly wonder about this....and I was willing to pay them for an account -- which they they axed and made it free for all. How can that be sustainable, how?!
I imagine they will run at a loss until they can monetize effectively like reddit. I know everyone tells us that reddit is not profitable but they are selling their front page to advertisers quietly.
I recently saw a front page post that was just a Taco Bell sign that was 20 years old. A fluff bullshit post with little discernable value. Now I don't suggest that the user paid to post it, that sort of stuff would be found out quickly, but it was up voted enough to get it into the hot\rising queue and by virtue of appearing there it made it to the front page.
We know that in the early days the admins/founders used fake accounts to simulate activity on the site and I not imagine that has changed. So they use these accounts to boost up votes and almost guarantee a front page position.
They are also happy to remove front page posts that advertisers don't like e.g sears
another interesting fact is that reddit just last week released api functionality to access reddits cache of all thumbnails and native resolution of post images on their own infrastructure.
Of course they've must have cached thumbnails before but this seems like a giant expansion that must consume rather much resources... or maybe they did this before and just didn't expose the functionality, but it seems tied to their new mobile webpage
moot (of 4chan) said a while back that Cloudflare is one of the main reasons 4chan is still around these days.