Originally Posted by PowerCum

If you run a hosting company the point of view is very different.

Tube sites search budget on bw burning. They CAN have budget bw because they burn several Gbit line (at least the mid sized and big ones). When a client comes and says "Hey, I will burn you 5 Gbit and will take 75 servers, so make a good price"... you usually tend to sell him the bw at very low cost. In most cases almost the same cost as your current carrier cost.

Why would someone sell 5 Gbit of bw at their current carrier cost? isn't it stupid at all?
It's because when you get more volume with your carriers the price also drops. So if you get 5 Gbit morewith your carriers the price per Gbit of line drops down. So you end making money with that.

Example (prices are not realistic, but I will not tell you how much does a gbit of line cost on carrier level because you will cancel all your servers after reading this):
Before tube site comes as client a gbit of line costs 10.000 at carriers and we have 10 bgit
We add 5 gbit of line with the carriers, so now we have 15 gbit
Tube site burns these 5 gbit and pays 10.000 x 5 = 50.000 monthly
Now our price per gbit with the carrier costs 9.000 because we have a volume discount on all thebw.
Profit = 5.000 per month only from the bw volume the tube site brought.

I know several tube sites that don't even pay the bw they burn. They get it for free and only pay for the servers as long as they guarantee a sustained bw burning volume and at least one year of permanency with the datacenter.

Paul, you as a serious businessman should already know that you don't give the same prices per set to someone that comes to buy 5 sets than to someone that comes to buy 1.000 sets.
Running a mid sized tube site (about 2 - 5 million uniques) at the moment is cheaper than running 5 thumb TGPs ranging 150k - 250k each one.