3 Ways Streaming Technology Costs Grow
The DPP's Streaming Platform Ratio tells you where you are. Splitting platform costs into what you build, what you store and what gets watched tells you why, and where you're heading.
Netflix spends about 10% of its streaming revenue building and running its platform. The median streamer spends 16.4%.
Both numbers come from the DPP’s new Streaming Platform Ratio (opens in a new tab), published by its CEO Rowan de Pomerai. The report gives streaming leaders a new and useful benchmark: what share of streaming revenue goes into building and operating the platform?
Included in this ratio are the technology, people and operational costs required to run the service, not just engineering. Content costs are excluded.
The DPP (opens in a new tab), with support from Bedrock Streaming (opens in a new tab), measured the ratio across 16 streaming platforms. The median was 16.4%. Platforms above €100M in revenue came in at 16.0%, versus 29.6% below that threshold. They estimated 10% for Netflix.
To me, the ratio is worth a look for one main reason: it tells you where you are. And it becomes even more useful when you break it down further into its 3 very different cost drivers.
To be clear, the split is my own interpretation, not the DPP’s.
1. Costs you pay once
Platform R&D, the player, recommendations, tooling and the headcount behind them.
Not literally once: salaries and software subscriptions come back every year. But viewership barely moves them.
That’s why scale matters: a player costs about the same to build for one million viewers as for ten million. It helps explain why the DPP’s larger platforms average 16.0% and the smaller ones 29.6%.
On top of this, the economics of building software are changing again. AI can increase the amount of software a team can produce from a given budget.
2. Costs that grow with your catalogue
Packaging, transcoding and storage.
These costs follow the amount of content you operate.
A better codec doesn’t make this cheaper. Encoding a title in AV1 takes more computing than in H.264, and most services keep the older versions too, for devices that can’t play AV1. What you get back is lighter streams, so the saving shows up in delivery.
Netflix said in December 2025 that AV1 accounts for about 30% of its streaming, with AV1 sessions using one-third less bandwidth than AVC and HEVC.
Basically, you spend more preparing content to spend less delivering it.
3. Costs that grow with viewing
CDN delivery, plus services priced by play or impression: DRM, advertising and measurement.
These costs follow consumption. CDNs will charge by the gigabyte, and an hour of HD video is about 2 to 3 of them. Twice the viewing means about twice the bill.
Most streaming platforms will continue to buy that capacity from CDNs. NRK (opens in a new tab)’s Bjarne Myklebust put it simply on stage at Marion Ranchet’s Streaming Made Easy Live (opens in a new tab): “We have, for instance, three CDNs and we have price competitions every year.”
The mix is already moving
I asked Rowan how the balance between capex and opex is shifting. He pointed me to the DPP’s Media CTO Survey (opens in a new tab): in 2025, 58% of media company CTOs expected their capex to fall, while 61% expected their opex to rise.
Less build, more run.
A platform can sit at 16% for years while the money inside moves from costs it pays once to costs that grow with use.
Take an example: Imagine two platforms close to the median. Each has $50M in revenue and $8M in platform costs: 16%.
| Platform costs | Platform A | Platform B |
|---|---|---|
| Building | $6M | $2M |
| Catalogue | $1M | $1M |
| Viewing | $1M | $5M |
| Total | $8M | $8M |
Let’s say both double their revenue and audience, with the same catalogue.
A becomes $9M / $100M = 9%.
B becomes $13M / $100M = 13%.
The ratio may be the same today but the economics may vary wildly going forward.
So for a technology leader, the question isn’t just whether the ratio is going up or down. It’s what makes each dollar of your technology budget grow. As AI (for metadata, for example), codecs, automation and distribution technology change those cost line items, that question will matter more.
A simple place to start: sort last year’s platform costs into the three and see which one is driving your number.
The DPP’s Streaming Platform Ratio tells you where you are. The split helps you understand why, and where you’re heading.
(I work on the delivery side, which sits in the third bucket. The research is the DPP’s, supported by Bedrock Streaming, and Rowan’s article (opens in a new tab) is worth reading in full.)
Which of the three is the biggest part of your ratio today?
Want to run the numbers on your own traffic?
Talk to our founders about your audience, delivery stack, and where peer-assisted delivery could help.
