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A cost-effective system must allocate video files to the right place at the right time.In this article, we present the characteristics of different storage media and provide an analytical model for obtaining the cost of storing video files. We then state the video file allocation problem and provide a solution.e have the technology now to offer video-on-demand, interactive games, catalog shopping, W educational programming and more to the homes of geographically dispersed users. Vendors are announcing superserver solutions for multimedia information delivery systems one after another. However, we will have to wait at least several years to have this so-called information revolution at the tip of our remote control devices. Why? Because designing a cost-effective superserver that can support multiple, simultaneous, full-motion video streams is still challenging. While studies show that many consumers would like video information delivered to their homes,' it is not clear how much they would be willing to pay for it. The bottom line is, consumers won't subscribe unless the service is affordable.Consider a multimedia server that supports a community of 4,000 families. We can assume that residential customers will pay for multimedia information delivered to their homes if the price of a movie or a video file is so low that it beats a trip to the video store. If we set the price of a stream at $5, then Figure 1 shows how many movies per week per family on average we must sell as a function of the number of years to amortize the server cost for servers that cost $2 million, $4 million, and $8 million.A multimedia server design assumes a number of things about the customer profile and the video file demand distribution. Alas, neither the customer profile nor the video file demand distribution remains the same over time. The demand for a movie changes as the viewers' interests and profiles change. In the short run, some video files or movies are frequently demanded in the morning, while others are in high demand during the evening. In the longer run, Oscar nominations or other news about stars can suddenly make some movies popular. The bandwidth capacity of the storage device where the movies reside must support this sudden increase in demand. If not, the server might need to migrate the corresponding video file to another storage medium and/or make multiple copies to sustain system stability and achieve the desired grade of service. This is equivalent to moving highly demanded merchandise to a distribution center with more trucks, drivers, and employees to distribute it faster. Naturally, the cost of such a distribution center will be higher; however, serving more customers will increase the revenue as well.A typical video server can accommodate thousands of video files. Customers would like access to a vast selection of movies. Video server designers, however, would prefer to include in their menu only those movies popular enough to justify their storage and communication costs. A "hot" movie can attract hundreds of vi...