HD Cloud lowers price to $1 a gigabyte for volume users and offers low-volume service for free

December 10, 2009

2 Min Read
Video Encoding Gets Cloudy & Cheap

HD Cloud today announced new pricing for on-demand video encoding that includes a free tier of service, designed to encourage businesses to try the service.

The new pricing, at $1 per gigabyte for volume customers, “is not a race to the bottom,” insists HD Cloud CEO Nicholas Butterworth, a former cast member on Zoom, a PBS kids show. Instead, he says, the lower prices are an effort to show enterprises that it’s more cost-effective to buy video encoding as a service rather than do it themselves.

HD Cloud’s pricing model now includes HD Accelerate, the highest tier aimed at large-scale video encoding users; a basic plan for medium-sized users; and the free tier for customers using less than 2 gigabytes a month of encoding.

"We want to be aggressive in growing the market," says Butterworth. “Pricing has been between $2 and $3 per gigabyte, but we have technology that enables greater efficiency, and we are passing those savings on to our users.”

HD Cloud uses Amazon’s EC2 cloud-based computing service with its own proprietary video scaling algorithms to offer its cloud-based video encoding, which supports a variety of video formats.

“You gain efficiencies by being able to quickly deploy processors, not wasting processor cycles when we are launching, and being able to maximize the utilization of servers when they are up,” Butterworth says. “We have been able to figure out when we don’t need servers and take them off line, which has enabled us to get 20 percent to 30 percent more efficient in our server time.”

Using cloud-based video encoding has become the first option for most businesses, Butterworth notes, but at certain price points, businesses will do their own cloud services. “That’s what we are competing against today. I’ve talked to a lot of video players who are excited to drop what they are doing and use our service at these price points.”

HD Cloud's parent company, Diversion Media LLC , is an interactive Web shop with several lines of business. Here's a 2007 clip of Butterworth talking about his firm's use of Amazon.com as a content distribution network (starting at about the 3-minute mark), making it one of the earlier adopters of cloud-computing services:

— Carol Wilson, Chief Editor, Events, Light Reading

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