Hardware encoders can be a step up from software encoders and be a way to future-proof the business, but they can be expensive. Those who are new to streaming may want to take the time to determine if this is going to be worth the investment for them. Beyond determining whether the encoder is going to be useful and helpful, it’s important to look at the ROI (return on investment) to see when the investment will pay off and whether it’s worth the cost.
Look at the Total Cost of Ownership
Take a look at more than just the purchase price before calculating the ROI to determine the overall cost for the encoder. Are there licensing fees? Will maintenance or support be needed in the future? How much will that cost, especially if expert assistance is needed? Will there be any costs to make the switch from software to hardware? If there’s a fee to cancel a software service, for instance, include that in the total cost of the hardware encoder. Take time to learn more about hardware encoders to find the right one and start figuring out the total cost of ownership.
Determine the Potential Gains
Take the time to think about the potential gains that may be seen with the new encoder. Is it going to be possible to make more money with it? Can it help save time? Calculate any quantifiable gains that will be seen by purchasing the hardware encoder to figure out the overall value it can provide to the business. This is important to know before determining the ROI for the purchase.
See How Long the Purchase Takes
Depending on the business and the encoder, it may be necessary to finance the purchase. This can allow smaller businesses to purchase better hardware that will benefit them in the long run. It’s a good idea to determine the price per month or year until the hardware is paid off, as this can impact how long it takes to see a return on the investment. This should be considered when calculating the ROI, as it may mean a longer period before the business will start to make profits, which can impact the decision on whether or not it’s time to upgrade.
Calculate the ROI
Finally, using the numbers determined in previous steps, it’s time to calculate the ROI and see if the purchase is worth it. Calculate this by dividing the net benefit, or amount of gain seen by the hardware, by the cost of the investment. Multiply this number by 100. Use that number to determine how long it will take to start seeing a return on the investment. If it’s too long a period, it may not be worth it to upgrade now. If, however, it won’t take long to start seeing increased profits, now’s the time to buy.
If you’re thinking about purchasing a hardware encoder, especially if you’d like to spend more to future-proof your setup or be able to do more right away, it’s important to look at the ROI to determine if it’s going to be a good financial decision for your business. Use the tips here to see how quickly you can start to see a return on the investment and start making more money with it.
