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i'm wondering how does the media servers work, do they require large bandwidth if you are doing, let's say, live streaming something like ustream, and there are 10k people watching, do you need a large bandwidth or it is something like p2p ?

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I'm more on the client development side with Flash than server admin, but more than likely, yes, you would need a lot of bandwidth to have 10k people watching. The good thing is that with streaming video, you're only downloading the data your watch (unlike progressive). More of an issue would be the number of concurrent connections you could handle per FMS install. 10k would probably require a lot more than 1 server running FMS apps to handle. I'm currently working on a project where we are streaming from 2 installs (beyond the installations of FMS, not sure how they load balanced it) with the hopes of supporting up to something like 2k concurrent connections. I found this article to be pretty helpful (users + bandwidth stats):

http://www.adobe.com/devnet/flashmediaserver/articles/performance_tuning_webcasts.html

The part where "code" meshes with server administration can get pretty daunting (if you ask me)...and every client wants "youtube but with X feature." At 1K a license plus BW, this can get super pricey.

Depending on your needs, you may want to use a 3rd-party FMS company to handle your streaming (especially if it's just for a single event; you can get 'per-event' pricing). Also, I recently used the justin.tv api to create a streaming video feed in Flex. It was pretty painless and all the BW is on them :)

The good part is that once FMS is running, it's super easy to develop with in Actionscript :)

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