So I was just renewing a contract with a VPN provider, and paid out for a couple years it works out to somewhere under $2/month.
ISPs around me can run from about $50-$150/month
If I’m putting the major bulk of my traffic over a tunnel that could eat up a sizable chunk of a given connection point for the provider that I’m sure costs more than $2/month to maintain. I would have to assume it would take the combined subscriptions of several users to pay for a given node.
So how does that work as a business model? Unless these VPN providers are getting a steal on their connections it’s hard to envision how they can manage to pay their costs without these nodes being absolutely bottlenecked when a few people start streaming some shows.
You’re paying for the last mile, they probably aren’t. VPN’s can probably get away with servers near major Internet nodes.
If you are in the United States, ISPs are largely unregulated and charge whatever the fuck they want. They make ridiculous profits.
Many other developed countries have dramatically cheaper internet access with significantly higher speeds.
For you to have fast internet, someone had to lay out the cable from their comm centers to your house. They can still be overpriced, but they have a lot of infrastructure that VPN providers get to use for free.
American residential internet prices are a fucking rip
But also. VPNs do not need to worry about the “last mile”, I.e. infrastructure to your house, which is most of the cost of your residential service.
That last mile thing would make a lot more sense if the carriers kept enough staff to have appointments not take a week. Add to that the wireless carriers around don’t have much price advantage either, but that’s mostly a ‘fuck you, we can’ pricing I figure.
The joys of living in the corn fields.
I’m sure you are far outweighed by users like me who keep one for when traveling away from home and working in public spaces (i do two days a week on average). Most days is no bandwidth and when there is usage its pretty low as limited to the public WiFi so just syncing files for local changes and general internet use / research. I could do and sometimes use a VPN to my home server but I don’t want the risk I can’t work anywhere if something happens.
With an ISP, you are not paying much for your bandwidth to the Internet. You are paying for connection between your house and their office. Your ISP has to maintain many miles of wire across your city. They also need to maintain equipment that can handle thousands of individual connections across many individual wires.
In comparison, a VPN provider just has a couple of very big connections going into their data center for pushing data in and out.
Plus, you likely have only a few choices of ISP (or only one choice), so your ISP can maintain a very healthy profit margin. With VPN providers, there is a ton of competition, so they have to charge you only a little above actual cost.
So much goes into that last mile of service.
SOURCE: Old cable internet guy.
ISPs only cost like $10 a month to run.
VPN providers have to manage less hardware
How the hell does all the physical infrastructure an ISP maintains cost that little?
That doesn’t sound like it’s even in the ballpark, given that even the server they might host their website and payment portal on would likely cost more than that in electricity use.
Oh I see what you meant.
Per customer* cost.
Ah, ok. That makes a lot more sense lol. Idk why my dumb ass assumed you meant that was like a total amount
So many were getting subsidies.
The one in my city demanded that the city pay for the infrastructure setup for city wifi, as promise they’ll provide it for us. Then they charged for it.
It depends on the service level. Gigabit is something like $30 minimum just due to the fiberoptic hardware and bandwidth egress.
Unlimited 100 Mbps internet costs around $5/month where I’m at
There’s a fiber build in progress around here that I expect is going to kill all the existing local carriers, or at least force them to drop prices by a drastic amount. Nothing close to $5 though.
Commercial data centers. Auto scaling infrastructure and just sheer scale. At $2 it may be at cost or a loss to generate future sales.
Others have given plenty of good reasons. But on top of that they’ll make money from all the people paying for the subscription but currently not using it, like any subscription service does. Most users won’t use their vpn 100% of the time
I’m something of an outlier in the use level for sure with all the self hosting. When my kids starts downloading these several hundred GB games for the consoles though that take hours to pull it can sure eat the bandwidth up. Makes me wonder what the more typical home user’s average is.
Less than a GB per day on average for me, don’t use it most of the time, mostly for watching content abroad
VPNs are basically free to host. All you need is one server and you can put hundreds of people on it if you really hate them.
ISPs have to actually run cables to your house, to other nodes, sometimes pay to route traffic through certain connections.
Also most cheap/free VPNs are either stealing and selling your data, or using your network as a VPN for others.
If I’m putting the major bulk of my traffic over a tunnel that could eat up a sizable chunk of a given connection point for the provider that I’m sure costs more than $2/month to maintain. I would have to assume it would take the combined subscriptions of several users to pay for a given node.
Most VPN users do not saturate their connection the entire time. Which means they can overload their nodes.
They also have fatter pipes and dedicated hardware that allows them to handle a lot of traffic from many different endpoints.
Aren’t they just spoofing your address? I never thought they actually had any infrastructure.
A VPN creates a private tunnel to route traffic over, so in effect they need to have the bandwidth for both your payload and the tunnel overhead.
Makes sense. Thanks
