I'm wondering if I have my CDN archive up on their server during a live stream and NOT archive it locally, am I likely to have fewer frame drops since FME isn't having to store locally too?
No. Local archiving is an inexpensive process. Frame drops might be occurring because of insufficient bit-rate or very high CPU usage.
What's your machine config and FMLE settings? Where do you see drops - input or output?
Most of my drops are on the output side, but I do see 15-20% of the same number of drops on the input side. I'm using a dual-core box, but am being told that I probably need to be using quad-core. Another question though.. how much more load does increasing the output size put on the CPU?
Best bet is to untick the input preview on your FMLE.And your CPU usage should not be more than 70%.It's better you upgrade ur box to an i5/i7 3GHz with atleast 3 GB RAM.Try soluto to clear your programs running on the background which mite use your CPU.
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you can minimize the output drops by increasing the bit-rate.
Just ensure that CPU usage doesn't go beyond 80%, because some devices don't function properly at very high cpu usage. Higher output size will require more cpu. I can't suggest a number because it depends on lot of parameters (content, cpu power, fmle settings). Make sure that you don't get very high input drops, otherwise video will not be smooth. You can even work at 100% cpu if you want but keep a watch on input drops and audio-video quality.