The Cost of Kodak Gallery

In late March, Kodak Gallery (neé Ofoto) changed its terms of service, now requiring a minimum annual purchase to keep your photos safely stored on their servers.  That got me thinking: how much does it cost to host all of Kodak Gallery's photos?  What if I were to build a Kodak Gallery site and host it myself?  I got out my calculator and sharp pencil to find out.

Let's start with some basics:

• Kodak limits an uploaded image to 10MB.  Most people just pull the JPG from their camera to upload it with only a few tweaking RAW files in Photoshop and uploading 10MB JPGs.  Let's assume the average upload size is 1MB, though I suspect even that number is high.
• Kodak hosts about five billion images.
• Amazon's S3 storage costs, vary based on a lot of factors.  Again, to keep things simple, we'll assume all 70 million Kodak customers are in the U.S.  In reality it's more like 82%, but it makes the math much more complicated to factor in Europe and Asia and doesn't change the numbers greatly.
• Kodak has 3.3 million users per month and the average user views eight pages per visit for a total of 26.4 million page-views per month.

Now the math.

First storage:  five billion images as 1MB each is about 5,0000 TB of storage.  Amazon's S3 storage system using a graduated pricing scheme: the first 50 TB are charged at $.15 per GB or $7,500; the next 50 TB are $.14 per GB or $7,000; the next 400 TB are $.13 per GB or $48,000; the remaining 4500 TB are $.12 per GB or $540,000.  Total cost for storing five billion 1MB image: $602,500 per month.

Next, data transfer: for each page view, we need to transfer one image so that works out to 26.4 million x 1MB = 26.4 TB of data transfer. Again the graduated pricing scheme: $.17 per GB for the first 10 TB of transfer or $1700; the next 16 TB are $.13 per GB or $2,080 for a total of $3,780.  Add to that $.01 per 10,000 GET requests -- we've got 26.4 million GET requests -- for another $27.  Total data transfer costs: $3,807.

So we're looking at about $544,000 per month to host Kodak Gallery on Amazon's S3.

What if Kodak put a banner ad at the top of each page.  With 26.4 million page views they would need to grab slightly more than $.02 in ad money for each page view or about $20 per 1000 page-views.  A popular home fix-it website brings in about $25 per 1000 page-views.  This, of course, does not include profit made when Kodak users order Kodak products through the Gallery site.

I'll grant you that there are a lot of assumptions I'm making in this article and I'll poke around to see how far off those are when I've got more time.  True, I'm not considering the cost of running the site, just storage and transfer.  Also true that Alexa and Quantcast are poor substitutes for real server log numbers, though both point to a large year-over-year drop in Kodak's traffic, no doubt a sign of the recession.  Similar to Canon's online bungle regarding the HD-movie capabilities of the EOS 5D Mark II, Kodak is going to learn the hard way that storage is cheap and customer loyalty is very expensive.