Cloud Video Streaming vs On-Premises: Costs and Benefits

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What Is Video Streaming?

Video streaming refers to the process of delivering video content over the internet in real time. This allows users to watch videos without having to download them. Instead, the video data is sent in a continuous stream, allowing viewers to watch the video as it is delivered. Video streaming is ubiquitous in various fields, such as entertainment, education, and business. Hosting video streams can be done on-premises or in the cloud, and each solution has its benefits.

Cloud Video Hosting

What Is Cloud Video Streaming?

Cloud video hosting is storing and streaming video content through a third-party, cloud-based service. Instead of hosting video files on your servers, you manage your content on a remote cloud hosting provider. That provider will store, transcode, and deliver the videos to your audience using their video-optimized infrastructure. 

The World Is Shifting to Cloud

The world is moving towards cloud-based solutions, and video streaming is no exception. There has been a significant shift toward cloud computing in recent years.

Many businesses and organizations are now embracing cloud computing, as it provides a more flexible and scalable way to access and manage their computing resources. Companies can now leverage the resources of cloud providers, which allows them to scale up or down as needed, pay only for what they use, and access the latest technology.

As a result, cloud computing is rapidly becoming the preferred model for businesses and organizations.

Benefits of Cloud Server Video Hosting

Cloud providers will save you time because they adhere to many compliance standards by default. Having security experts who will protect the network means you have more time to focus on delivering the streaming experience.

Being in the cloud also allows you to access your infrastructure from anywhere. This will give you much more flexibility when it comes to hiring.

Another benefit of cloud hosting is scalability, meaning you can handle sudden surges in traffic without worrying about your servers crashing or becoming overwhelmed. This is especially important in video hosting since traffic can be unpredictable and bandwidth-intensive. 

On-Premises Video Streaming

What Is On-Premises Video Streaming?

On-premises video streaming refers to hosting your video files on your servers. This means you're responsible for purchasing and maintaining your hardware and handling all of the associated costs and maintenance tasks. Even though you’re hosting the infrastructure, it doesn’t necessarily mean you also have to take care of everything software-related. It’s possible to use solutions optimized explicitly for on-premises streaming. And a lot of cloud stream providers will offer software solutions for on-premises, too.

Benefits of Having Video Streaming Servers On-Premises

The most significant benefit of on-premises video streaming is control. When you host your servers, you have complete control over your infrastructure, which is particularly important for companies with specific security or compliance requirements. If needed, this allows on-premises solutions to be more customizable overall than cloud-based solutions, allowing you to tailor your streaming experience.

Certain customers, like government agencies, financial institutions, or healthcare providers, especially need more specialized solutions, such as video availability over the internal intranet only.

And since the data is in your control, you can invest more in securing it and be more confident in stopping bad actors rather than trusting a third party.

Additionally, since you have complete control over your infrastructure, you can optimize your hardware to handle your specific needs. This can help you avoid overpaying for resources you don't need.

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Cloud vs On-Premises Video Hosting Costs

When comparing cloud vs on-premises video hosting, there are a few key factors to consider. 

With cloud hosting, you'll typically pay a monthly fee to your provider based on the amount of traffic and storage you're using. This means you only pay for the resources you need, which can be particularly beneficial if you're just starting out or experiencing sudden surges in traffic. Additionally, since cloud hosting providers take care of maintenance and upgrades, you won't need to worry as much about investing in your server hardware or hiring dedicated and specialized staff.

On-premises video streaming can be more expensive upfront since you'll need to maintain your own hardware and IT staff. While you will need to invest much more in hardware upfront compared to a cloud solution, this path can also offset the cost after a few years in certain situations. It’s also more suitable for an organization that already has established on-premises IT infrastructure through a physical data center.

Below is a direct breakdown of certain cloud vs on-premises video hosting cost factors:

Hardware Expenses

On-premises video hosting requires purchasing and maintaining hardware, which can initially be a significant capital expense. You will also have to research and wait for the equipment to arrive. Cloud video hosting eliminates the need for hardware purchases and maintenance since it’s all handled by your provider, who will already know which hardware stack is the best while having enough in stock to deploy immediately without much waiting.

Server Setup

With On-premises video hosting, you must install and set up the video hosting software, which can be costly and time-consuming. With cloud video hosting, the provider will take care of the installation and setup, which could be set up to provision automatically. Additionally, the hosting provider will handle all future upgrades, usually without an extra charge.


With on-premises video hosting, you will typically have to purchase licenses and subscriptions for video hosting software or pay developers to make or extend functionality for you. With cloud video hosting, you'll pay a subscription fee that can include the licensing for specialized software at a much lower cost.

Uptime Availability

On-premises video hosting may be more prone to downtime, which can be costly. Cloud video hosting typically has better uptime service level agreement (SLA) availability guarantees.


On-premises video hosting can be more challenging to scale up or down, requiring costly hardware upgrades or replacements, which can result in under- or overutilization. Cloud video hosting allows for easier scaling up or down when needed and only using the necessary resources.

Service Integrations

On-premises video hosting offers more flexibility when it comes to customization and integration, but this can also require additional development and maintenance costs. Cloud video hosting offers fewer customization options but can have more cost-effective and video-specific add-on services that are reliable, tested, and scalable.


With on-premises video hosting, hardware will need to be replaced periodically, which can be costly, complicated, and time-consuming. With cloud video hosting, the provider handles hardware replacement in case of failure.


On-premises video hosting may require hiring additional technical staff for 24/7 onsite availability. In case of an emergency, they could react more quickly. With cloud video hosting, technical support is usually included in the subscription fee for a much lower cost, giving you access to highly specialized personnel. The response time and quality of support may vary, though.


With on-premises video hosting, you must hire staff to manage the hardware, software, and network infrastructure who must attend onsite. The provider handles most of the management on the cloud video hosting side, reducing the need for additional staff to maintain the hardware. Going with the cloud also allows you to outsource the personnel since the cloud infrastructure can be accessed by your team from any location.


On-premises video hosting costs more since you must maintain your physical security, cyber security, and compliance staff. With cloud video hosting, you may still need to pay for your application security, but the provider covers your security.

Backup and Recovery

On-premises video hosting requires you to manage your backup and disaster recovery solution. With cloud video hosting, the provider usually manages backup and disaster recovery as part of the subscription.

Additional Expenses

On-premises video hosting requires ongoing operational expenses, such as electricity, on-site physical security, and cooling. Cloud video hosting is usually just an ongoing monthly expense, but there can be significant charges for breaking the bandwidth limit and unexpected price increases.

Final Thoughts

When deciding on cloud vs on-premises video hosting, it's important to consider factors such as video hosting costs, scalability, control, and security. While cloud hosting provides ease of use and lower upfront costs, on-premises hosting provides greater control over security, compliance, and software stack. It's important to prioritize security, scalability, and reliability, regardless of your chosen option.

Still have questions? The Most Helpful Humans In Hosting® at Liquid Web will be happy to help.

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About the Author

Freddy Reese

Freddy works in the Liquid Web Managed Hosting Support team with a strong passion for all things related to Linux administration, cybersecurity, and aviation. In his free time, he likes to keep up with the latest news on topics ranging from fusion to space technologies. His hobbies include automating all kinds of stuff using Arduino/Raspberry Pi, learning and flying around in flight simulators, playing with his dog Chupko, swimming at nearby beaches, and staying physically and mentally healthy by going to the gym.

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