Save on Encoding Costs: Cut Cloud Encoding Charges

This is the fourth article in a series on saving encoding and delivery costs. The first three articles are:

Saving on Encoding and Delivery: Dynamic Packaging
Saving on Encoding and Streaming: Deploy Capped CRF
Saving on Encoding: Adjust Encoding Configuration to Increase Capacity

Cloud encoding is a great alternative for producers who don’t want to invest CAPX for their own encoders and pay for the in-house expertise necessary to keep the encoders up and running. But it’s very easy to overpay for cloud encoding; here’s a guide to help you avoid doing so.

Cloud VOD encoding is gaining popularity for many streaming producers for many reasons (this article will only discuss VOD, not live). This demand has spawned many different product offerings, and it can be very difficult to understand what you’re getting and what you’re paying for, and what you may not be getting.

A great place to start is the new price list for the Professional Tier of Amazon Media Convert. I’ve copied the H264 pricing data into the table below and added some columns and rows to identify the premiums for extra services. I included this information because AWS Elemental is one of the few sites that clearly delineated what you pay for the various options and because it illustrates the cost side of the encoding equation. All cloud vendors pay similar costs to produce the different inputs and outputs; what each vendor passes on to the customer is up to them.

Table 1. AWS Elemental Professional Tier pricing for H.264. Click to view at full resolution. 

Let’s start with resolution. Like many vendors, AWS Elemental doubles the price for HD and doubles it again for UHD. Obviously, this is because more pixels take longer to encode. AWS Elemental does the same for higher frame rates, again for the same reason; more frames mean more pixels to encode. There’s also a 175% premium for two-pass encoding, which in most cases delivers higher quality than single pass. Interestingly, not all vendors offer two-pass encoding; most notably, the Amazon Elastic Transcoder does not.

Questions you should know the answer to for your cloud encoding facility are:

  • What’s the premium you’re paying for HD and UHD?
  • Is two-pass available, and if so, is there a premium?
  • If you’re using single-pass encoding (say for capped CRF), is there a discount?
  • Can you customize encoding parameters to improve quality if it extends encoding time; for example, using the veryslow x264 preset rather than Fast? If so, is there a premium?

Table 2 shows AWS Elemental pricing for HEVC. Single-pass encoding pricing is double that of H264, which is reasonable, and premiums for HD, UHD, and high frame rates are the same as they were for H264. However, you’ll pay 4x for balanced single-pass encoding and 7x for quality optimized 2-pass encoding, peaking at about $1/minute for high frame rate UHD content.

Table 2. AWS Elemental Professional Tier pricing for HEVC.  Click to view at full resolution. 

More questions you should know the answer to include:

  • What’s the premium for higher quality codecs like HEVC, VP9, and AV1?
  • How will this vary by encoding configuration?

Having experimented with encoding HEVC, Elemental’s pricing accurately reflects the cost side of the equation; two-pass encoding can easily take five – seven times longer to encode than single pass, particularly if you use a speed-optimized configuration for one-pass and quality-optimized for two-pass. The question isn’t whether it’s reasonable or not, but what you’re getting and what you’re paying for.

[dt_quote type=”blockquote” font_size=”big” animation=”none” background=”plain”]If you’re producing multiple ABR formats via a cloud encoder, the obvious question is whether you’re paying full price for each, or whether you’re getting a discount to reflect the actual processing involved. If you’re paying full price for each format you’re very likely paying too much. [/dt_quote]

Transmux Fees

Another area of price differentiation surrounds transmuxing fees or converting files in an encoding ladder from one ABR format, say HLS, to another, like DASH or Smooth Streaming. Where encoding to H264 or HEVC is very CPU intensive, converting from HLS to DASH is not. Some vendors, like Telestream (shown in Figure 3), Bitmovin, and Zencoder, charge less for transcoding; many do not.

Figure 3. Telestream charges less for transmuxed output.

If you’re producing multiple ABR formats via a cloud encoder, the obvious question is whether you’re paying full price for each, or whether you’re getting a discount to reflect the actual processing involved. If you’re paying full price for each format you’re very likely paying too much.

When the Cost of Switching is High?

Once you understand your pricing structure, it’s time to consider your alternatives. The first thing to assess is the cost and risk of switching vendors. To the extent that you’ve implemented pre-encoding workflows in the cloud, the cost of switching goes up, as not all cloud encoding facilities may be able to replicate these. The same is true if you’re looking to supplement your in-house encoding facility with cloud-based encoding for spikes in encoding demand. In these cases, using the same vendor for in-house and cloud means controlling all encoding from a single interface and even using the same encoding presets. That’s a lot of convenience and time saved.

If the cost of switching vendors is very high, determine if the cloud vendor offers different pricing options. For example, offers reserved cloud pricing that lets you buy the capacity of a cloud machine for a fixed price per month. You can encode and package as much video as you can during that month. For many customers, this can present significant cost savings over’s normal per GB pricing. Some vendors will also drop the price if you guarantee certain levels of throughput.

Other vendors, like Bitmovin, let you license their cloud encoder for use on your own computing infrastructure (see the figure atop the page). In this case, the price per minute is much less than you would pay for encoding the same output via Bitmovin’s SaaS.

Otherwise, Consider other Encoding Shops

Outside of these scenarios, understand that from a strict output format perspective, most outputs are commodities. Most cloud encoders are built around FFmpeg and use the x264 and x265 codecs. DASH is DASH and HLS is HLS. By this point, most credible encoding shops can handle multiple languages for audio and captions and multiple DRMs. Though it will take some experimentation to produce the equivalent output and programming time to support a different API, it’s not rocket science, and if the economics dictate a change, it’s a change you can and should make.

As you’ve learned, though most vendors still offer per GB or per-minute pricing, several vendors offer new pricing models for different types of clients. Cloud vendor Hybrik is another alternative. Briefly, Hybrik runs on the Amazon cloud, and you allocate machines using your own Amazon account. Hybrik charges a flat fee that depends on how many machines you can simultaneously assign to the system; 10 machines are $1,000/month, 100 machines are $5,000/month, and so on.

What’s great about reserved cloud and Hybrik-style pricing is you know exactly what you’re paying for and can make the quality/encoding-time trade-offs that you want to make. It really is as close to running your own encoding farm as you can get without actually running your own encoding farm.

Where to Go From Here

Whether you’re currently using a cloud encoder or are shopping for a provider, expect price comparisons to be challenging. Not only will you have to calculate costs under both per-minute and per-GB pricing, you may have to compute costs under reserve cloud or Hybrik-style pricing. Most cloud vendors do an awful job identifying all the pricing alternatives on their websites, so expect to spend some time contacting each vendor for details.

All this makes comparison shopping complicated but not impossible. If you’re currently spending more than $2 – $3,000 a month for cloud encoding, it’s an exercise that you may find very worthwhile. If you’d like some help running this analysis, contact me (Jan Ozer) at


Buyers’ Guide to Cloud VOD Encoding, Streaming Media Magazine, March 2018. This article identifies factors other than pricing that you should incorporate into your decision-making process.

About Jan Ozer

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I help companies train new technical hires in streaming media-related positions; I also help companies optimize their codec selections and encoding stacks, and evaluate new encoders and codecs.

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