Ustream is targeting this service at companies that may want to live stream meetings to employees, as well as to Websites that want to offer their own live-streaming programming and need more than what they can get by simply embedding a Ustream.tv player today.

Watershed is a cloud computing service, with pricing on a pay-as-you-go basis. Pricing starts at $1 per viewer hour for 1,000 viewer hours per month or less and scales down to $0.25 per viewer hour for streams that a reach 50,000 viewer hours per month or more. (A viewer hour is one viewer watching a stream for one hour, or 60 viewers watching for one minute, etc.).

So a live stream watched by only 30 people for a half hour would cost $15, but a stream watched by 30,000 people for a half hour would cost $7,500. I am not sure how much a comparable content delivery network like Akamai would charge, but Ustream CEO John Ham says they are aiming for a comparable price. Watershed’s advantage being that customers only need to pay for what they actually use.