As the devices are getting smarter and the internet is getting faster, the closely associated trends are also clutching the stage. Online video streaming has gone through an unprecedented evolution and has influenced the market share of its closely related segment –traditional pay TV t a great extent. Looking at the stats released by Deloitte for the year 2017, we can conclude that-
55% of the US population is now using paid video streaming services.
48% of US consumers stream the same TV content via online services.
US consumers paid $2 billion monthly subscriptions to video streaming services.
The taste of entertainment and media consumers is changing. We can see a shift both in the ways video streaming services function today and the ways consumers consume the media content. Though this massive shift did not occur overnight. It was a gradual proliferation that actively involved the advancement in the technologies being used to-
Broadcast the online content to the global audience.
Consume the online content from the end-users’ side.
How did this shift occur?
2015 was an imperative eon for upgrades in the streaming friendly internet technology. We saw a shift from the legacy streaming protocols to the specially crafted overlay networks, dedicated streaming protocols, and custom servers for faster buffer free content delivery. The new infrastructure supported the advanced content delivery mechanisms like –
Breaking data packets in small chunks
Enlarging the geo-boundaries and loss-less streaming.
HTTP-based WebRTC streaming directly direct browsers.
These advancements when implemented on contemporary video streaming software, aided streaming services to –
Reduce video infrastructure cost.
Simplify the network organization.
Upscale the IT and server infrastructure.
Enhance video streaming quality and UX.
How it affected the legacy streaming operations?
For most of the video streaming services and organizations that used the legacy technologies, infrastructure, and protocols, the modern shift was a decisive modulation. For example, the new setup offered a better alternative. So most of the video streaming software development companies,white label streaming services, infrastructure providers, and the associated service vendors adapted to the change and closed their legacy operations.
Now, the video streaming services still stuck with the legacy technology faced a forced situation to adopt the inevitable change. Otherwise, they would have to be ready to face challenges such as –
Limited choice of hardware infrastructure
Limited streaming software support
Limited vendors for associated API support
An eventual boost in the delayed migration cost
Bottom line: The shift to the modern stack was not an option but a necessary move if the streaming services and business intended on continuing their operations and enhance the end-user experience with a better tech stack, reduced operational cost, and up-scaled streaming quality.
How the world adapted to modern video streaming?
Early adopters took no time to migrate. They saw a new arena of broadened possibilities and enhanced video streaming business operations. However, this transition was not a sudden explosion. The 2008 Summer Olympic had already laid a foundation of new expectations for it.
For the first time ever, they streamed the entireSummer Olympicin high definition video quality. With a partnership between Microsoft and NBC, they delivered the smoothest video streaming world had ever seen by then. In a very short span of just 2 weeks, almost 50 million unique visitors streamed 70 million times to watch 10 million hours of video content.
This joint venture by a tech giant and the well-known broadcaster laid a milestone. It’s not that such attempts were not made in the past, but this time a complete broadcast in HD quality was a wonder. The event made it clear that the internet is much scalable to stream huge, high-quality, stable, and seamless video content.
Foundations of Modern Streaming Technologies
The success of HTTP streaming for the Olympics was mainly an indication for something bigger. They used the simple but very powerful architecture. HTTP streaming proved its significance by fully adapting to the laid network topology and leveraging the stateless and cache-based internet architecture. Contrastingly, the custom streaming protocols hinder the underlying architecture and fail to leverage the internet to the fullest.
Here are a few of the fundamental aspects that make contemporary video streaming infrastructure better:
1. Content delivery in small chunks:
The modern transmission protocols divide a video file into multiple smaller chunks and transmit each chunk independently through different routes across the internet. The routing manages the sequence of the delivery and transports the final content in the original form at the user end.
2. Independent chunk transmission:
Each of the chucks takes independent routes while in transmission and none are dependent on the previous requests. That means the video playback is independent of the need for a persistence connection between the device and the origin server.
3. HTTP-based transmission protocols:
The chunked-segments travel across the internet and the local WAN networks using a single HTTP protocol. The HTTP protocol is equipped with both abilities to transmit unencrypted content through TCP port 80 and 443 for SSL-encrypted content.
4. CDN-based global HTTP caching:
Content delivery networks (CDN) have made transmission smoother through dynamic caching. CDNs use HTTP caches across the internet and corporate WANs. This helps them to cache and store segmented data to different nodes and deliver them to the nearest device much faster. This passive network architecture ensures a dynamic buffering of the content from the nearest nodes without fetching them from the origin server each time.
5. Adaptive bitrate switching:
The biggest driver of advancement in the video streaming market is adaptive bitrate switching. The video is encoded on multiple formats and resolutions for different qualities. Streaming engines use adaptive bitrate switching to dynamically adjust the stream quality according to the internet bandwidth and device playback capacity. It minimizes the buffering efforts and delivers seamless packets in an adaptive environment.
Benefits of modern streaming for businesses and consumers
The advancements in the tech stack and addition of modern protocols opened doors for easy broadcast to the multitude. The HTTP streaming was indeed superior to legacy protocols like RMTP and RTSP in terms of streaming quality. However, it also made the paid streaming services possible and allowed an enhanced user experience to the end users. Ultimately, we could see the positive effects on business operations as well.
1. It slashed the infrastructure complexity
The default HTTP streaming using TCP ports 43 and 443 were competent to adapt to the caching-friendly internet architecture. Unlike legacy protocols, you are no more required to develop dedicated infrastructure for caching management.
HTTP protocol can seamlessly travel the firewalls. Every corporate network always keeps its TCP ports 80 and 443 open while restricting the RMTP and RTSP protocols. Hence, it made the streaming implementation easier in corporate WAN networks and businesses could by-pass the need for dedicated infrastructure to manage the flow of traffic from white-label video streaming services.
2. It reduced the overall implementation cost
In addition to the cost saved by eliminating the need for above to separate infrastructures, the streaming services and corporates can now also save the investments in server hardware and additional software to manage video overlay.
Next, by using the CDN based dynamic caching, the business can now save the extra bandwidth required to fetch the content from origin server each time some user makes a request. The HLS based streaming can adapt to the existing HTTP server network and save the cost of extra hardware and software for caching. CDN implementation made streaming smoother and allowed branded and white label video streaming services to expand their business globally.
3. It enhanced the user-end payback experience
With dynamic bitrate switching the video streaming has become accessible through any device and even via a slower internet bandwidth. Besides that, HTTP can adapt to the popular video and audio codecs (H.264, AAC, etc.), which make streaming further accessible across a wide range of devices. It gave a broader consumer base to the video streaming services and opportunity to expand their business. Now a user could stream both from a high-speed Ethernet connection and through a mobile internet network.
4. It scaled the infrastructure for streaming businesses
Legacy protocols had limited scalability. Streaming services could upscale their broadcast capacity only by investing in additional hardware and software. With HTTP-based modern protocols, they got inherited scalability and also some advanced native supports like mirroring and edge caching, which also allowed seamless CDN integrations.
Using it, now a particular stream was accessible by the masses and CDN services could use the existing infrastructure to boost the reachability with reduced network latency. With faster content delivery, the HTTP protocol now supported both on-demand and high-quality live video streaming.
The above benefits allowed white-labeled video streaming services to extend their operations from corporates to general consumers. Now they could broadcast as many content to as many users at a time. Which ultimately got the names of branded video streaming services or OTT streaming services. For example, Netflix, Amazon Prime, and Hulu, etc.
5. Introduction to the e-sports
The reduced latency and improved stream quality did not only evolved the way video was broadcasted but also for a lot of other media too. Be video, image, text, or Gif, the contemporary HTTP based CDNs can transmit any type of content.
On this budging edge, a new form of streaming is budding gradually- eSports. The new concept leverages multi-player video game competitions as content and broadcasts the live gameplays direct to the internet audience. This sphere alone is a multi-billion dollar global industry and is expected to grow over $1.5 billion by 2020.
Video streaming market has changed a lot since modern protocols were introduced. There is a lot more that can be done in this industry. With this rate, it wouldn’t be a surprise to see global Paid TV market being surpassed by the OTT-streaming very soon. The coming era of 5G infrastructure is yet to come. You never know what is possible with a 5G speed and what else can you broadcast further. It is certain that AI will become an inseparable part and we will see some intelligent routing, bitrate adaptation, and smoother content transmission. AR and VR streaming will become more prevalent. For now, just know that the finest of online video streaming wonders is yet to arrive.
YouTube’s origins were rooted in a very different foundation to the one that upholds it today. It was started as a dating website in February 2005 by Steve Chen, Chad Hurley and Jawed Karim. Over the years, however, it has evolved into a site exclusively for video sharing. Today, YouTube is the world’s most popular and most populous video sharing website and the second most used search engine on the internet. Over a billion video consumption hours are clocked daily on the platform and over 400 hours of content are added to it every minute of everyday. YouTube’s most striking facet is that it speaks to a global audience, being available in 76 languages. It is used by individuals, celebrities and brands big and small, and boasts a universal appeal. But as much as it has done for the global video community, few people know the answer to this pertinent question: how does YouTube make money?
The answer? Intelligently.
The YouTube business model is underpinned by a variety of revenue streams, which the platform cleverly integrates to form a singular proposition for users. Inspired by the YouTube model, a crop of excellent next-gen video sharing websites has emerged. Some of these have been specialised, focused on niche topics like cooking and baking. iFood.tv, for example, is a close-knit community of cooking enthusiasts who share recipes with each other. Other platforms have been more mainstream, inviting videos across an array of topics to be featured. The primary growth engine for this cult phenomenon has been the rise of turnkey frameworks in the market. StreamTube, a video sharing technology, has gestated thousands of video sharing brands, world over. The deftly developed technology offers technology newbies a superior framework at a fraction of traditional launch costs.
Before we dive into how YouTube makes money, let’s understand how YouTube really works.
An Insight Into YouTube
You’re probably already familiar with the mechanics of YouTube, but if you aren’t, here’s a brief run-through of what the platform does and how it serves users. YouTube, a Google-owned entity, is a video sharing platform that enables users to upload videos, create their own channels, follow fellow users and share and comment on content. It also allows established content creators to monetise their content via advertising. Video consumption for users is free. Aside from its video framework, YouTube has also branched out into music and games, providing exclusive exclusive platforms for each.
The YouTube Business Model
Interestingly, YouTube doesn’t spin its margins from viewers; access to its content is free of cost. Its business model stems from its massive base of 30 million daily visitors. The fact that the platform garners so many eyeballs has presented several monetisation opportunities to YouTube. Most of these are some form of advertising, where advertisers, content creators and YouTube gain predetermined shares of revenue. Recently, YouTube has launched its first subscription model, a product called YouTube Red. The premium platform charges members a reasonable membership fee for access to exclusive content and privileges. The YouTube business model has proved massively successful and has been emulated by several smaller brands across the globe. StreamTube, for example has inbuilt monetisation tools that allow entrepreneurs to select a monetisation strategy that suits them.
Route 1. Advertising and Sponsorship’s
Sponsored Videos
YouTube is an ideal platform for advertisers, because its reach is vast and broad. Sponsored videos in particular, can be crafted as native advertisements, slipping into the content ecosystem on YouTube seamlessly. Unlike advertisements, sponsored videos can garner individual interest from users if created well. For sponsored videos, an advertiser pays YouTube depending on how many views the sponsored video has received.
Pre-Roll and Mid-Roll Advertisements
You’re probably well acquainted with the annoying pre-roll ads that play before a video on YouTube. These are embedded advertisements that have been placed by advertisers. The great thing about ads is that they can be effectively targeted at specific user groups based on preset criteria. Ads come in various formats; pre-roll and mid-roll are two of the most popular. Pre-roll implies an ad being placed before the start of a video and mid-roll indicates a video being interrupted by an ad in the middle. Advertisements are usually charged to an advertiser based on how many views an ad receives. A certain percentage of this cost is paid as remuneration to the content creator whose video the ad was placed in. You may have noticed a ‘Skip Ad’ option on YouTube. If a viewer does indeed skip an ad, an advertiser is not liable to pay for the view at all.
Home Page Banner Advertisements
If you’ve logged into YouTube from your desktop, you’ll know that the landing page that opens is a repository of diverse content. Research suggests that video placed on a landing page can multiply conversions up to 80%. Thus, YouTube capitalises on the value of its landing page by charging advertisers a premium for ads placed there. The banner page can accommodate content in a plethora of formats and is a useful tool for advertisers.
Route 2. YouTube Red
Taking a leaf out of Netflix’s book, YouTube has launched its own premium subscription service called YouTube Red which offers users an elevated entertainment experience on YouTube, YouTube Music and YouTube Gaming. YouTube Red, priced at $10 per month, provides the following benefits:
Ad-free experience
Access to exclusive, locked content
Offline consumption
Screensaver play
Audio mode
Free access to Google Play Music
Route 3. Monetised Content
YouTube has collaborated with some of its prime content creators to created gated viewership for select channels. Those content owners who own coveted content on the platform now have the option of charging a subscription rental for their channel. YouTube and content creators are thought to share subscription revenue on a 45:55 basis.
The YouTube business model rests on volumes. If you’re new in the video sharing space, you may not have a formidable user base to support your advertiser universe. Until you’ve built up a sizeable set of users, employ alternative monetisation tools. Leverage sponsored videos, subscription services and premium content layers. Consider giving a free trial of your platform to lure users, and be sure to source excellent content that will keep your viewers coming back for more.
First things first, setting up a video on demand platform isn’t a tremendous feat reserved for the high and mighty. It’s a real possibility for anyone intending to pursue an audience in the online video space. The best part? Thanks to turnkey frameworks, your tools are already ready for you. The internet is brimming with ideas and innovations and the e-marketplace is an abundant store for turnkey technologies. One that stands out is StreamView, a bellwether framework that can have you set up your on-demand video platform within days. The advantage with picking a turnkey video on demand platform is that your user interface, customisation features and experience building tools are yours to the tailor. And you get to pick and choose content that goes into each template.
There are several things to consider on the road up to launching a video on demand business model. Start by addressing a few questions:
Is your content repository adequate to sustain a video on demand service?
Does your content belong exclusively to you?
Have you established notable partnerships for new and cutting-edge content?
Once you have taken stock of your content repertoire, it’s time to piece together a platform for your users. At this stage, it’s important to note that purchasing a turnkey technology could prove wiser in the long run. The advantage? Well, the turnkey framework is products of years and years of development, design, and refinement. They work on a license model, meaning that you acquire a copy of the framework that is free to be customised on your terms. A turnkey framework is a more economical, aesthetic and functional option than a self-crafted technology.
Here are some steps to build a successful video on demand platform:
Step 1. Pick a Good VOD Platform
Your video on demand platform provider will supply the wings for your business and so, it is crucial that you pick a service that supports you around the clock. An effective way to sift through options is to keep customer service as a primary criterion. Certain video on demand platforms offers superlative customer service controls when compared to others. StreamView, for instance, ensures 24×7 technology support, seamless feedback handling, and professional troubleshooting services. Make a list of criteria that are important to you and draw up a checklist against each of your shortlisted videos on demand platform providers.
Step 2. Explore Potential for Diversification
With the internet burgeoning with communication tools, it is a good idea to set out a future path for your business with respect to the communication. Think of adding communication tools like live streaming and video sharing to your roster. The beauty of turkey technologies is that they are mostly compatible with associated frameworks. If we go back to the example of StreamView, you’ll see that the framework is one of a trifecta of technologies. Of the other two, one is for live streaming and the other, for video sharing. This means, that if you ever plan to introduce one of these forms of video to your platform, all you have to do is slide in an additional technology layer and you’re good to go!
Step 3. Set Up a Monetization Model
Once you’ve woven your content strategy together, the next step would be to set up a quantifiable marketing model. There are several tools that you could include; the key is to assign metrics for every idea that you want to push. This is the best way to measure the success of any campaign.
Tool 1. Advertising
Advertising is the most preferred monetization tool employed by companies that ride exclusively on content. And for good reason. Advertising can garner significant revenue for a content-based business as long as its audience is sizeable. A point to consider here is that ad-based revenue can be sustained only by volumes because a single advertisement contributes very little revenue. A video is an expensive form of content and you may spend exorbitant amounts of money sourcing, creating and producing content for your video on demand platform. Determine how many users you’ll need to reach in order to break even for each piece of content. If your number is far higher than your current user penetration, consider an alternate means of monetization until your user base reaches the required threshold. If you’re not sure where to start, a good yardstick would be one million page views per month.
Tool 2. Cross-Platform Production
The power of video has caught on for not just those attuned to online video, but even stakeholders of alternate content platforms. More and more content entrepreneurs and marketers are beginning to add video to their existing content mix. Many of them, however, don’t have the expertise to create quality videos. That’s where you come in. By catering to corporate clients seeking video content, you could cross-promote your brand while also charging at a per-video rate.
Tool 3. Subscription Model
Coveted content can sell well on a subscription model. However, introspect to gauge whether your content really warrants a subscription. Would people fork out money for your service? There are plenty of video on demand services in the market. What value can you add? To establish a sustainable subscription model, you must introduce novel content, seek exclusive rights for premium content and create in-house shows. Anything that you can offer that your neighbor can’t is a good differentiator.
Tool 4. Pay Per View
If you’d rather sell your content on a piecemeal basis, pay per view is your answer. This is the format you’d find on iTunes, where every item is priced individually. If you haven’t got a vast archive of content, this is a good model to adopt, because you can still engage with users without going all the way.
When it comes to picking the technology backbone for your video on demand platform, you should make several considerations. For starters, find out whether your shortlisted VOD platforms come with inbuilt content delivery networks. A content delivery network is a web of global servers that can deliver your feeds seamlessly to various corners of the globe. So, if you’ve got a considerable international audience, this is a worthwhile point to note. Some technologies also come with a slew of superior support features like intelligence and analytics tools that could come in awfully handy.
When you are on the path to starting a video on demand service, there are a variety of factors to consider: conventional marketing, technology, influencer-led promotions, referral programmes. The list is endless, really. By picking a specialized prebuilt technology like StreamView, you can channel your energy into building the foundation for your video on demand platform. It’s remarkable how quickly and easily you can breathe life into your brand. All you need is an idea.
The media industry today is continually tossing up new variants of over-the-top (OTT) entertainment for technology-savvy netizens. And while we already know that the sector has morphed into a colossal force powering millions of bits of content to all four corners of the globe, it’s worthwhile to dig deeper into the relevance of OTT and how you can start a business in this space. To begin with, let’s look at what OTT really is.
The Fundamentals of OTT Video:
OTT is a broadcasting method that transmits video content over an internet line. The term denotes the delivery of content above and beyond the purview of traditional broadcasting formats such as satellite, cinema, and cable. OTT has undergone an interesting evolution since its inception. Started as a means for users to stream content on-demand, it now exhibits the capability to transmit live content to users, akin to a live telecast on television. It’s likely that you’re more familiar with video streaming services like Netflix, as this model is far more evolved than its live broadcasting counterpart. Having said that, live streaming is gaining traction in several markets across the globe as a means to transmit real-time information to users. OTT is an ideal solution for users who decide to forego a monthly cable subscription or those who prefer to consume entertainment nuggets on the go. With emerging turnkey frameworks available in the market, setting up an OTT video streaming service is affordable, viable and sustainable. StreamView is an option worth considering.
Steps to Create Your Own Video Streaming Service:
If you’re already engaged in traditional media and plan to expand your repertoire to include OTT, you may have a whole lot on your plate. Adding OTT to your media portfolio can be a challenge if you don’t have the relevant technology. Plus, acquiring media rights entails a different licensing process to conventional content formats. Here are some steps you can follow to start a video streaming service:
Step 1. Acquire Content Licenses:
Here’s the good news: licenses for OTT content follow a very similar path to that of traditional content. Naturally, your first step should be to get your content licenses in place. These include advertising agreements, revenue-sharing ratios with content owners and other relevant approvals and licensing clauses. It’s a good idea to consult a lawyer to get an insight into the legal implications for licensing.
Step 2. Create a Monetisation Model:
When it comes to monetizing OTT content, there are three recommended routes you could take. You could use each route independently or in conjunction with one or more others. Have a look to gauge which one you think suits your video streaming service the best:
Subscription Video on Demand:
Like the name suggests, Subscription Video on Demand (SVOD) pivots on a subscription model, requiring users to pay a fixed monthly fee for access to an unlimited library of content. Netflix, Amazon Prime, and Hulu follow this model. SVOD is ideal for users because there is no lock-in period or long-term commitment. At the same time, it serves OTT video streaming services well by garnering more users via word of mouth.
Ad-Supported Video on Demand:
By onboarding advertisers, you have the option of keeping your core video streaming service free. However, think twice before you go down this road because Ad-Supported Video on Demand (AVOD) is a rudimentary model for specialized content. If your content is coveted and your portfolio boasts features far superior to your competitors’, consider a subscription model. Where there’s value, there are bound to be customers, even for a price.
Transactional Video on Demand:
Transactional Video on Demand (TVOD) works on a piecemeal basis, requiring a user to pay only for specific content items consumed. You’re likely to reach a wider audience through TVOD, because users may not feel encumbered by a monthly subscription. The problem is, you may undercut yourself using this model. If your content quality is formidable, users may not mind paying a subscription for it.
Step 3. Pick a Technology:
Okay, so you’ve carved out your monetization model and content licenses and now it’s time to pick out a technology. There are several ways you could do this. If you’re feeling especially adventurous and have the appetite, you could build a framework from the ground up. But this takes time, money and resources and it’s probably wiser to opt for a turnkey streaming technology from a reputed brand. StreamView has become a prominent framework in the technology stack of numerous OTT companies across the world. Given its lightweight interface, customization features, and handy admin console, it’s little surprise.
Step 4. Organize Your Ancillary Tools:
Once you have your technology in place, there are several tools you should organize to make sure that your setup is seamless. Here’s a look at some of them.
Video API:
An API is critical in powering an OTT video streaming service and serves as a key that unlocks the elementary components of a content service. StreamView comes with an inbuilt, full-fledged API that serves to provide access to an array of features.
Software Development Kit:
A Software Development Kit (SDK) is an organic off root of an API. Made up of software tools and coding scripts, it works as an enabler to propel long-drawn API routines. StreamView offers select bespoke SDK tools for a variety of streaming capabilities. Make sure you ask to have your SDK integrated when you set up your video streaming service.
Fluidity and Compatibility Tools:
Your users will likely access your content from a range of different devices. While StreamView comes equipped with tools to augment fluidity, it’s a good idea to seek out an HTML5 video player to make sure that your content is digestible on a variety of screen sizes.
Setting up your own version of Netflix doesn’t have to be a cumbersome, long-wound process. With the right technology partner and superior content, you’ve got yourself covered.
Netflix wasn’t started in an arbitrary manner. In its near twenty years, a lot has changed for this Video on Demand (VoD) giant. It started as a DVD and Blu-Ray rental service and in 2007, Netflix made its foray in streaming media market. The year 2013 can be considered a breakthrough year for Netflix because Netflix made two important developments: Apart from adding television and film production, it looked set for online distribution of video content. Today, Netflix stands as an epitome of timeless Video on Demand (VoD) service. Netflix is a venture like no other; its presence in 190 countries with over 85 million paid subscribers speaks volumes about its success. As a matter of fact, Netflix competitors do not consistently record huge revenues. Amazon Prime is a first class exception though. Truth be told, Netflix Business Model and Netflix business plan are perfectly imitable and if anything, imitation is the greatest form of flattery.
Netflix Business Strategy:
Legend says that the CEO of Netflix, Wilmot Reed Hashtings, approached BlockBuster in 2000 for a partnership. BlockBuster denied the offer and as it panned out, BlockBuster was annihilated completely by Netflix in 2005. While it has been a sorry state of affairs for BloackBuster, Netflix has been trumping almost every video streaming and video on demand service with its best of the class business strategy.
Netflix business strategy can be broken down into three simple points:
Produce: Invest in producing awesome content
Purchase: Purchase and acquire licenses of popular TV series and movies
Leverage: Leverage content distribution benefits
Netflix, being the undisputed kingpin of the Video on Demand market, has the courage to start its own “Netflix Originals”. And guess what, House of Cards and Orange is the new Black have mustered enough audiences and became crowd pullers. As far as its external funding is concerned, Netflix raised approximately $200 million through equity financing. Debt financing is the sister of equity financing and Netflix raised $1.8 billion through debt financing.
Netflix Business Model:
Popular content studios such as Warner Bros, Fox Studios etc., produce very good content and quite obviously, they look for distributors who can distribute the content to massive audiences. Now, Hollywood is a huge industry which hinges predominantly on two distribution partners: Movie theaters/multiplexes and DVD selling companies. Not so long ago, Hollywood industry added another distributor partner- Online paid subscription sites. This is where video on demand sites such as Netflix, Amazon Prime, Hulu etc., come into the picture.
The interplay of licensing deals and rights purchase is often much talked about. Here is a brief on how licensing works:
Assume that I am a content producer. Naturally, I invest a substantial amount to produce super fine quality content.
I strike deals with movie theaters and multiplexes and subsequently sell premiering rights.
A clause on commission i.e., the percentage of box office revenue to be collected should be clearly detailed out.
I also make money by striking deals with DVD selling companies. Of course, my earnings are in the form percentage cuts.
According to The Wall Street Journal, Netflix is the single largest purchaser of licensing rights. It is followed by Amazon.com and Hulu.
Netflix’s Subscription Business Model:
Netflix business model entails its subscription based business model. Here is a brief on the same:
To begin with, Netflix buys content from content publishing and content producing studios.
Netflix streams content. Users who wish to view the content should purchase a monthly subscription plan. There is another alternative available to users- Pay per Use
Netflix tries to increase its subscriber base through cautious and enchanting marketing efforts.
Money received from subscribers is used to buy more and more content.
After gaining immense popularity and stardom, start producing own content. Strike licensing partnerships with other media channels such as Colors Infinity. For your information, House of Cards and Orange is the New Black is being aired on Colors Infinity.
To tap the non-subscriber market, rent out DVDs. Rental money is a source of income not only from non-subscribers but also from one-time users.
Streaming formats are not uniform. Netflix is known for converting one streaming format into multiple commercial streaming formats. And interestingly, Netflix makes BIG money through this model.
Another inherent element of Netflix’s revenue model is strategic product placement. For instance, season 1 of House of Cards had a plenty of product placements featuring Play Station 4, car rental ads etc.
Thanks to its superior video streaming services, Netflix has an estimated revenue of $8 billion and not astonishingly, the video on demand giant spends a significant chunk on content acquisition.
Why You Should Create Video Streaming Services:
In the earlier paragraphs, I have quantified the earnings of Netflix. I would like to substantiate my point with yet another interesting estimation – the market for subscription based economy tools is touted to touch $100 billion. When I mean subscription based services, many things such as subscription based auto insurance, car rental services etc., come under its umbrella. For all intents and purposes, subscription based video streaming business model is recession free. This is because people do not buy the complete package in one single payment. If anything, they enjoy the flexibility of turning off and on a service.
Remember, it is not possible to get instant brand recognition. You should be sure that you have a significant chunk of audiences ready to consume your content. Also, you should procure rights to all the content you wish to stream. After ticking these two checkboxes, you should definitely then think of starting a Netflix clone.
So, what do you require to start a massive Video on Demand (VoD) site like Netflix?
Content Distribution Network: A content distribution network stores all your video content on servers spread across various geographical points. CDNs are scalable. In other words, if traffic to your website is high, CDNs will be capable of handling it with ease.
Payment Gateways: Popular payment gateways such as PayPal, Stripe, Braintree etc., should be incorporated to handle billing and subscription based payments
Data Analytics: Presence of this module is incredibly imperative. This module throws insights on who is watching what, how often and how long are audiences watching, etc. Such insights help you plan and promote your programs. You should take all the insights into consideration before producing or purchasing new content
Ad–Manager: Proper ad positioning is important. This module categories ad based on their performance- high performing, non-performing and medium performing.
Data Hosting: If you are embarking on a video streaming service business, it is important to have a place to host content.
Admin Panel: You cannot do away with this module. This module helps you grant and revoke viewing permissions to paid and unpaid subscribers.
Multiple Monetization Channels: The very purpose of running a Netflix-like business venture will be defeated if there aren’t any monetization channels. Apart from having an avenue for subscription based viewing, there should also be an avenue to facilitate pay-per-view schemes. Another monetization feature is the presence of banner ads. If viewers click ads, you make decent money.
Encoder: This module is required to convert information or data into one format to another format.
Search Engine Optimization: To get ranked in search engines, digital marketing efforts should be exemplary. A built-in SEO module will ideally help admin control and set SEO setting for keywords.
Well, the list goes on. The job of building a Netflix clone site from scratch is tedious. Most importantly, it is extremely difficult and to be upfront, very expensive. It therefore makes a lot of sense to go with a turnkey software solution like StreamView. StreamView is equipped with the following three channels that let you upload videos in bulk:
Amazon S3 bucket
YouTube Links
Normal Uploads
Website Links
Yes, there are several other options available in the market. But not every option is known to minimize your content distribution efforts like how StreamView does. Please visit StreamView for further details.
We can help you reach the pantheons of glory and success. If there is anything troubling you and your venture, do not hesitate to drop a line or two in the comments section. We shall help reply in a day or two. Subscribe to our newsletter. Keep watching this space for insights on video streaming business. Cheers!
