The Hidden Costs of Building a Real-Time Streaming Platform 

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Interactive video streaming has taken the world by storm.  Across corporate events, live commerce, live auction, sports betting and other interactive use cases, organizations are using streaming technology to create dynamic online experiences. To increase audience engagement in interactive applications, a real-time video streaming platform is required. And it does not stop at the video technology itself: a robust scalable architecture for a global scalable business also requires insight into the quality of service of your system, and a secure layer to protect against attacks and misuse. Building all this is no simple feat. Attempting to develop video infrastructure is very complex and pulls you away from your core business operations. 

Ask yourself: Are your time and resources best spent building out a streaming tech stack, or would it be better spent developing your product and staying ahead of competitors?  

After all, delivering reliable experiences at scale is a major hurdle for streaming experts. Why? The larger an audience grows, the more resources are required to maintain availability. Latency also must be kept at a minimum to support live interaction like survey, polling, and betting.  

So what does it take to build a real-time streaming platform that delivers on these requirements?  

Businesses have three options: 

  1. Build from scratch: Develop in-house streaming infrastructure using a team of full-time video engineers and substantial upfront investment. 
  1. Take a piecemeal approach: Combine third-party components for different steps of the video workflow — such as a video server, an HTML5 player, and a video analytics solution. 
  1. Use a comprehensive platform: Get up and running quickly (and benefit from end-to-end visibility) with a platform like nanoStream Cloud. 

In this article, we detail the considerations and hidden costs developer teams should take into account when adding interactive streaming to their product offering. From there, we explore the pros and cons of each scenario. 

Table of contents

Real-Time Streaming Requirements 

While streaming workflows can vary based on needs, a few key components are table stakes when delivering real-time video across the world. These include: 

  • Encoder: Encoding hardware or software compresses raw video into a streamable format, to send it upstream to the internet on the first mile. For real-time streaming, these should be validated to support low-latency streaming with formats like RTMP, SRT, and WebRTC. 
  • Transcoder: Transcoding is usually done on the server side for incoming streams, and is essential for adaptive bitrate delivery, which ensures a smooth video experience on every device. This also prevents buffering issues, which has no place in interactive environments.  
  • Content Delivery Network (CDN): These geographically distributed server networks enable scalable video delivery without bottlenecks. Ensuring a smooth viewing experience with highest quality for interactive video workflows takes more than a traditional CDN — which is why developers need to look for dedicated ultra-low latency solutions. 
  • Player: Web players running in the browser act as the face of your streaming platform, rendering the video on a viewers’ devices. Finding one with low-latency capabilities is crucial to ensure seamless experiences. 
  • Analytics: Analytics solutions based on aggregated data metrics that provide insight into the complete streaming worfklow are essential to ensure a high-quality viewer experience. End-to-end insight can also inform business decisions and improve reliability.  
  • Security: a robust system with protection against misuse is key for a global successful rollout. 
  • Tools: Additional tools like live recordings, thumbnail generation simplifies your workflow. 

While some organizations choose to build every component from scratch, it’s more common to either mix and match different pieces or find an integrated solution. Here’s what to consider when determining your route. 

Considerations to Take Into Account  

You’ll want to evaluate the total cost of ownership (TCO) when selecting which approach you take. Equipment investment, development costs, maintenance expenses, and more can all pile up — influencing your bottom line. 

What’s more, backend infrastructure isn’t the only thing that cuts into profit. Retaining users is key to monetizing most real-time video experiences and driving top-line growth. For that reason, ensuring a reliable, high-quality experience is also a must.  

All of the considerations below should be weighed in terms of balancing quality and costs to deliver on both priorities.  

Build vs. Buy 

Most technology investments are rooted in a build-versus-buy decision. Building your platform from scratch sits squarely on the ‘build’ side of this equation, whereas using a turnkey solution like nanoStream Cloud can be thought of as ‘buying’ within this framework. 

When organizations select to build new technology, it’s often due to a need for customization, complete control, or a lack of options on the market. This requires a large in-house engineering team and major investment. Both upfront development costs and ongoing maintenance expenses are high when businesses decide to build their solution from scratch. Real-time video workflows also require quite a bit more effort than most simple streaming setups, making product development time-intensive.  

The choice to ‘buy,’ on the other hand, is often motivated by speed and affordability. Turnkey live streaming solutions can help: 

  • Eliminate the need for in-house expertise 
  • Minimize the initial investment 
  • Accelerate time to market 
  • Outsource maintenance requirements  
  • Alleviate the need to continuously upgrade your platform as technology components evolve 

It’s worth noting, however, that some turnkey solutions restrict your ability to customize the platform to your exact needs. You’ll want to find a flexible platform like nanoStream Cloud with comprehensive APIs if this is a concern. 

NanoStream Cloud acts as a self-service platform that organizations can personalize, automate, and adapt endlessly. It combines the benefits of a pre-built solution with a high degree of customization — striking the balance between the control most organizations demand without the added burden of building and maintaining everything from scratch. We’ve also assembled a team of experts in the streaming space to support your needs — which is hard to come by. 

On-Premises vs. Cloud 

Another choice to make is how your video solution will be hosted. 

While there’s no one-size-fits-all answer, the tech world has been migrating to the cloud for some time. Amagi co-founder Srini KA explains: 

“Media has been one of the last industries to move to the cloud. Less than 10% of all television runs on cloud. Pretty much everything still [relies on] on-prem hardware and a data center-based approach. The next few years are going to see a wholesale migration of traditional media companies into the cloud.” 

Why? A few reasons: 

  • Costs: Cloud-based services allow you to only pay for the resources you’re using rather than wasting money on idle infrastructure. 
  • Agility: When your streaming technology is hosted in the cloud, it becomes easy to test and deploy new workflows.  
  • Scalability: When it comes to live events delivered online, unpredictable audience sizes can be a major issue. With cloud-based deployment, it’s easy to scale up and down in minutes. 

Of course, there are always use cases where on-premises deployment is a better fit. Government organizations, for instance, may need to keep their technology behind a firewall. On-premises becomes the only option in these cases, and with that comes the added responsibility of managing every aspect of the technology stack. 

CapEx vs. OpEx 

Financial management is at the crux of building a real-time streaming platform. There are two main cost categories to consider when calculating TCO: capital expenditures (CapEx) and operational expenditures (OpEx).  

CapEx represents the upfront investment in things like hardware and software licenses. OpEx, on the other hand, refers to the ongoing costs associated with running the platform, such as staff salaries and server maintenance. Understanding how these costs impact your development approach is crucial. 

Ask yourself: How much money do you have to invest now, and what are you hoping to achieve in terms of ongoing costs? 

Here’s how the three options compare: 

  • Building from scratch: Hardware, software licenses, and engineering team costs all equate to high CapEx. From there, ongoing expenses like server maintenance, upgrades, and talent retention will contribute to OpEx. 
  • Piecemeal approach: By using ready-made components, CapEx is kept low, but managing multiple vendors and integrations will likely lead to high OpEx in the long run. What’s more, you’ll still need a network of internal experts in different areas like software development and IT operations to support and solve any issues.  

Say you’re an online sports betting operator looking to build a real-time streaming solution for microbetting. Starting from scratch would delay time to market, as would a piecemeal approach. What’s more, you’d have to put your own pressing business needs on hold while tackling the real-time infrastructure required to support the new offering. 

Let’s take a closer look at the pros and cons of each. 

Pros and Cons of Each Scenario 

Building From Scratch 

Pros: Full control over infrastructure and limitless customization 

The primary reason that a company might choose to build its video platform would be if the capabilities they required weren’t readily available on the market. A lack of customizable solutions often forced companies to build their own infrastructure in the early days of video streaming.  

Consider Netflix, the company that forever changed how video is consumed by launching direct-to-consumer streaming. When Netflix launched in 2007, there weren’t any turnkey video streaming platforms robust enough for what they were trying to achieve. As such, Netflix’s only choice was to develop something from the ground up. 

This approach ensures limitless flexibility. Because in-house development team build every aspect of the video pipeline, it can be tailored to your precise business needs. With this comes quite a bit of work, though, which brings us to the cons. 

Cons: Slow time to market, huge upfront investment, ongoing maintenance, and lacking support  

The allure of complete control and customization can’t be denied. But building your own real-time streaming platform also comes with significant drawbacks. 

  • Slow time to market: Time is money. And in the race to get your service up and running, building out infrastructure is a major time commitment that can delay your ability to capitalize on market opportunities. This route also requires having a large, skilled engineering team ready to take on the challenge. 
  • Upfront investment: The CapEx associated with building from scratch is staggering. Costs include hardware acquisition, software licenses, and most importantly, the salaries of your development team. Unexpected technical hurdles can also pop up — leading to additional expenses as you course-correct. 
  • Ongoing maintenance and upgrades: The work doesn’t stop after launch. Maintaining a custom-built platform requires a dedicated team to handle bug fixes, security patches, and feature updates. This can be a constant drain on resources, especially as industry standards evolve and hardware becomes obsolete. 
  • Lacking support: When challenges arise, you’ll be on your own. Troubleshooting complex issues can be time-consuming and require expertise outside of your organization. And in the world of real-time streaming, downtime will damage customer trust and your reputation. Finding people with solid video knowledge can be a real challenge, even for streaming companies that live and breathe video. 

In a nutshell, building from scratch offers ultimate control but at the expense of speed, cost, and specially time to market ongoing management. For many organizations, the hidden costs outweigh the benefits — especially when considering the robust and readily available solutions on the market. 

Piecemeal Approach 

Pros: Ability to mix and match best-of-breed solutions 

With a piecemeal approach, your development team can pick and choose each component based on business needs. This gives you the ability to hand-select your encoder, transcoder, CDN, player, and more.  

For example, you might pair free encoding software (that keeps equipment investment to a minimum) with a real-time transcoder and CDN to support your interactive video needs. This flexibility allows content distributors to strike a balance between control and deployment speed.  

Cons: Integration complexity, no end-to-end visibility, fragmented support, and higher OpEx 

While awesome in theory, this also means that you have to take on the additional complexity of integrating disparate vendors.  

  •  Integration complexity: Each individual component will likely have its own set of APIs and workflows, requiring custom development effort to ensure that everything plays well together. For this reason, it’s often better to consolidate services through a handful of providers than pick each component individually. 
  • No end-to-end visibility: Pinpointing the source of a streaming issue requires full visibility across the live streaming workflow. And for this, you need to either build your solution in house or go with a comprehensive platform. Say your stream is slow to start. Or worse, it fails to play altogether. While the cause of this could be any step in the pipeline — such as a CDN caching issue, something to do with the player logic, or even a content transcoding setting — you’ll have trouble figuring this out with an ecosystem made up of disparate systems and vendors. 
  • Ongoing maintenance and upgrades: Maintaining tech isn’t a set-and-forget situation. As such, you’ll need an internal team ready to solve ongoing issues. Just think about how often Apple drops a new iOS update — this will require additional development for continued video support on Apple devices. 
  • Fragmented support: Customer support is great. But only when the source of the issue is easily identifiable. With a piecemeal approach, you’ll be stuck reaching out to different vendors when issues arise. Finger-pointing can also result, causing delays in the time required to resolve issues. 
  • Higher OpEx: The ongoing efforts of managing multiple vendors can be costly — creating additional work for teams across your organization. Your accounting department will need to handle separate invoices and payment schedules. The product team will be burdened by ongoing communication with vendors for feature updates and troubleshooting. To top it all off, your engineering team will likely spend time managing APIs, resolving integration issues, and maintaining the overall platform. This fragmented approach can lead to reduced efficiency and higher overall operational costs than originally estimated.  

Comprehensive Platform 

Pros: Speed to market, end-to-end visibility, maintenance and support, cost-effective, and ongoing innovation 

Architecting bespoke video infrastructure is an expensive endeavor — and one that takes focus away from your content and viewers. The same can be said for combining multiple components, as many hidden costs and complexities come into play. 

By going with an end-to-end video platform like nanocosmos, you can offset development costs and differentiate your service faster. While not all real-time platforms offer comprehensive visibility and a hands-on approach, we designed nanoStream cloud to be the one-stop solution for all your streaming needs.  

Here’s a look at the benefits of this approach: 

  • Speed to market: When you take too long to bring your product to life, you risk competitors beating you to the punch. A pre-built platform eliminates the need for lengthy development cycles, allowing you to capitalize on market opportunities and deliver value to your audience sooner. 
  • End-to-end visibility: Without a comprehensive view of your streaming workflow, it can be difficult to identify bottlenecks, optimize performance, and detect security threats like content hijacking. Finding a comprehensive platform that provides access to analytics makes it easier to control the user experience and ensure uptime. 
  • Maintenance and support: Software can’t be developed and never touched again. Ongoing maintenance and updates are essential to ensure smooth operation and security. Off-the-shelf components may seem attractive, but the onus will be on your team to keep it up to date. With a comprehensive platform that integrates all the components, maintenance and support is outsourced to the provider.  
  • Single point of contact: When taking a piecemeal approach, you risk different vendors pointing fingers at each other when something goes wrong. But with a comprehensive platform, you have single point of contact for troubleshooting and issues that may arise. 
  • Cost-effective: Real-time streaming platforms like nanoStream Cloud provide predictable OpEx and eliminate the upfront costs associated with building or piecemealing a platform. We’ve also optimized our platform for efficient and cost-effective transcoding. This translates to lower streaming expenses compared to in-house development or managing multiple vendors. 
  • Ongoing innovation: By finding a provider that is working to add new features and functionality, you’ll stay ahead of the curve. This translates to continuous innovation without the burden of maintaining and updating your own platform. 

Cons: Control and customization 

With pre-built solutions, development teams can run into obstacles when it comes to finetuning the viewing experience, setting up advanced features for interactive streaming, and integrating with third-party tools. 

Likewise, while these platforms might offer basic analytics capabilities, they don’t always provide the granular, end-to-end insight that’s required to fully understand viewer behavior. 

At nanocosmos, we deliver the best of both worlds by combining the many benefits of using a comprehensive platform with the control and customization that’s often restricted to businesses that build their own infrastructure. We work closely with our customers and partners, constantly adapting our strategy to serve their needs. 

Get Started Today With nanocosmos 

We partner with organizations across industries to deliver the cutting-edge streaming technology that today’s virtual environments require. Our platform delivers on the sub-second latency, reliability, and scalability required by businesses developing interactive streaming experiences.  

NanoStream Cloud is a comprehensive platform that integrates everything: 

  • Live  encoding: RTMP,SRT, WebRTC, WHIP. For browser based live encoding, use nanoStream Webcaster  for real-time streaming in a snap. 
  • Live transcoding: Transcode your content to deliver the best experience for each user thanks to adaptive bitrate (ABR) streaming technology. 
  • Global Content Delivery Network (CDN): With 100% uptime and continuous 24/7 operations, our low-latency CDN guarantees no interruptions, no matter how many people tune in. That means your users can engage from every corner of the globe with the highest level of success. 
  • Dynamic real-time player: Our easy-to-embed player combines seamless playback with sub-second latency — delivering on all your viewers’ expectations and more. 
  • Advanced analytics: Harness the power of our analytical tools to derive meaningful insights. By using the nanocosmos platform from end to end, you’ll gain observability across the workflow to inform business decisions. 
  • Video expertise: With more than 100 years of combined experience in video streaming, our team delivers the expertise you need to operate a high-performance platform. 
  • Global 24/7 support: We ensure your live streams are always up and running with dedicated customer support available around the clock. 

By choosing nanocosmos, you can achieve your real-time streaming goals faster, more efficiently, and with greater control (a.k.a. peace of mind). The result? Maximum audience engagement and high-ROI business growth. 

So what are you waiting for? Start a free trial today.