95th percentile billing samples bandwidth usage every 5 minutes for a month, sorts the samples, and bills based on the value at the 95th percentile position. Mathematically, this means the top 5 % of samples (about 36 hours of the month) are free. The model rewards steady traffic and penalises bursty traffic less harshly than a peak-billing model would; an operator with a small daily spike that lasts 1 hour gets billed at the level of their day-long average, not the spike.
The model originated in transit and peering — the bandwidth a hosting provider buys from an upstream — and remains the default there. CDN billing has largely shifted away from 95th percentile toward pure per-GB pricing, because per-GB scales linearly and is easier to forecast. But for self-hosted origins, transit links between data centres, and IXP peering arrangements, 95th percentile remains the standard.
For streaming, the implication is that a few brief peaks per month (a big sports final, a major release drop) are essentially free under 95th percentile, while constant high traffic is fully billed. This is the opposite of per-GB billing, where each byte costs the same. Streaming operators that have a few huge events and otherwise modest traffic prefer 95th percentile; those with steady high traffic prefer per-GB.
