It was fun to play with it for a couple months. But there's no business here. Twitch.tv is also finding that out.
There's absolutely a business, if you have license to good content that people want to see. If you don't, then you're in a horrible commodity market -- you're reselling bandwidth.
As consumer Internet grew, that became more and more unstable, until Netflix hit and just absolutely overwhelmed it.
Peering exist everywhere, and at scale you have to pay, yes.
Turn the whole thing into a self-referential product placement & affiliate scheme.
(Some of us have been dreaming about it becoming reality for decades, but some of us have also given up years ago.)
They don't seem to be p2p either, they have some server. Maybe it's stolen infra.
b) you find the hosting where you can just pay for bandwidth
c) the bandwidth is actually cheap, until you hit petabytes of traffic or dozens gb/s of BW
d) you don't scale for millions, you scale for hundreds, maybe thousands
EDIT:
e) most users of such sites aren't demanding for quality nor service, therefore you can compress a lot more and if you overloaded they would come to other sites (which could be operated by the same people just serving from the other place)
Actually, the opposite is true.
If you live a country where piracy is persecuted and these services aren't available and you want to watch Silo, you don't have a choice — you have to pay for Apple TV. If you want to watch Stranger Things, you have to pay for Netflix.
But if those services are available to you, then you would have those shows on any of dozens of pirate services, and you can switch between them anytime. At which point they actually start to compete on other qualities, like streaming.
In fact, many of them have much better quality, at least in the areas where their audience lives.
Bandwidth might be cheaper in absolute terms, but you're not paying less per user than if you scaled higher. How do you go from there to "the business model is to not scale up"
