The Daily API provides methods to stream calls to external services like Amazon IVS or YouTube, and also records calls in Amazon S3. To achieve this, participants send audio and video streams to each other directly or via an intermediate infrastructure. The backend combines these streams into a single output, multiplexes them, and then streams them to the chosen service. There are two main approaches: consuming streams in a headless browser for scalability, and using a custom application with GStreamer for flexibility and control. Daily's implementation uses GStreamer to perform tasks like decoding, compositing, encoding, and streaming, offering a media pipeline architecture that can be easily extended for new features.