We often talk about how technology has played a significant role in bringing together the world by shrinking the distance between geographies. Video powered technology is one of the most important contributors owing to this change. From cord-cutting to streaming on demand videos, there is a rapid growth in the video streaming business. In this digital environment, the streaming TV wars are upon us. Even with new streaming services launching every year, Netflix still remains the king of streaming TV. Unlike ever before viewers of today have choices of accessing entertainment anytime, anywhere, and on any devices.
The proportion of UK homes with at least one subscription service has increased to 52% in the first quarter of 2020. Over 15.01 million users have access to at least one of on demand streaming services like Netflix or Amazon Prime. Year-over year, this growth is rapidly rising among households across the globe.
As we have been forced to stay indoors during the COVID-19 pandemic, video streaming services like Netflix are a boon to enjoy entertainment. Social media are buzzing with discussions that point to the same.
Here’s the delighting news for all entrepreneurs out there.
You can use this astounding popularity of video streaming to establish and grow your business. If you are thinking about how to start a business like Netflix, but you are stuck on where to start, do not worry, this blog will exactly take you through all of it right from the very basics. First, you need to understand a little bit about Netflix and how it works. Let’s start with its business model.
Netflix Business Model:
Netflix is currently the ultimate option for users for TV series and movie streaming. According to forutne.com, the service of Netflix alone makes up 15% of all the global Internet bandwidth.
Who started Netflix and when?
The movie streaming giant was founded in August 1997 by two entrepreneurs. Marc Randolph and Reed Hastings. They started out as a web-based movie rental service and later became the world’s best entertainment platform.
During its initial times, Netflix allowed people to rent DVDs online and send them through email to its customers. While it was competing more with established video rental stores, it was also competing to some extent with TV for the viewer’s entertainment time.
When the whole world was glued to their TV screens, Netflix revolutionized the entertainment space with the idea of renting DVDs online so that viewers could watch their favorite shows and movies anytime they want at the comfort of their home. The streaming giant could adapt to changing technologies and audience demand, which made it very successful.
Netflix over the years:
According to Statista, Netflix had over 148 million subscribers spread across the world. Now, in the middle of 2020, Netflix has over 167 million paid users in over 190 countries. It has over 57 million users from the US. alone. On average, Netflix users spend over 1 billion hours watching movies and shows every week. It offers a broad range of movies, TV shows, documentaries across a broad category of language and genres.
Looking back to the history of the streaming giant, it can be a valuable learning lesson for the streaming business how Netflix raised to the top and set its throne. When creating your own streaming service, as long as you can keep up with the trend of innovation like Netflix, your business will remain dominated in the streaming industry,
The Business Model of Netflix:
Netflix generated total revenue of over $5.76 billion in the first quarter of 2020 which is a hike from up from 4.5 billion in the first quarter of 2019.
Have you ever wondered how Netflix manages to make a lucrative revenue every year? The secret lies in its business model. Netflix has worked its way into the lives of people around the world and revolutionized the way we watch TV shows and movies with its subscription business model. It is one of the simplest and effective business models that allows Netflix to create a consistent, scalable revenue flow. Netflix offers three simple subscription plans basic, standard, and premium starting from $8.99 to $15.99 as shown below.
However, if you are seriously thinking about how to create a video streaming website like Netflix, the first thing you need to understand is not to expect overnight success. The same was true with Netflix as well- It didn’t have an overnight success. Netflix also has negative cash flows as it invests greatly in original content and content license agreements.
Here is how the subscription business model works-
- Viewership register on the platform.
- Leverage a 14-day trial.
- Upon completion of the trial period, choose the desired package.
- Pay the monthly fee.
Netflix offers different subscription plans based on two aspects.
- Streaming quality
- Simultaneous login counts
Based on these aspects, users can subscribe to any of the three plans like below.
Basic- For standard video quality streaming and single login
Standard- For HD video quality streaming and two different logins at a time.
Premium- For 4K video streaming and 4 logins simultaneously
An in-depth look reveals that the business plan of Netflix aims at making revenue without charging a hefty price for the users. Take the premium subscription plan for example. Though it is the costliest plan it is actually the cheapest one considering the benefits users can avail. As it allows four different logins at a time from different devices at a time, four people can share the subscription cost and get the premium plan at an affordable price.
When brainstorming about how to start your own streaming service, selecting a business is not enough. You have to consider the preferences of your target audience and how you can generate maximum revenue without being evident in doing so.
Here is a Depiction of How Netflix Works:
The business model is not just about how you monetize. A business model mainly embraces a monetization strategy but it is more than that. It is about how you make your product or service available to your audience, and you make revenue from it. It is about the value you create for businesses and users.
One of the unique selling points of Netflix is the original content it creates. As it grew bigger, Netflix started producing its originals so as not to be left being in the competitive video streaming space. Likewise, when you want to start a streaming service, aim for a long term growth strategy to deliver your own shows to keep your subscribers hooked to your platform.
How to Start Your Own Streaming Service?
Creating the next Netflix is no easy task, but creating a movie streaming website is a lucrative and attractive business proportion. Here is a comprehensive guide to start your own streaming service.
Find Your Niche:
The first step is to choose the niche to power your video streaming service. While Netflix hosts shows and movies from all categories, you can choose to stick to a specific niche around which you plan to create videos for your audience. Here are some of the niches you can consider.
Religious Streaming Service:
In this digital era, to connect with believers across the world, most churches and mosques have started their on demand streaming and live streaming platform. Likewise, you can also invest in creating a Netflix-style religious streaming platform if you are looking forward to creating a website like Netflix in a different niche.
For example, Fatiha TV is an exclusive Netflix style Islamic streaming platform that offers Islamic videos for the believers including prayers and Quran studies.
If you are working on how to make a website like Netflix in a different niche, gaming makes a great niche idea. You can start a Netflix for video games, it can be on a subscription basis or based on a rental model as Netflix did when it started.
For example, GameFly is a subscription-based video game and movie streaming service with a 30 day free trial.
With the spotlight on fitness and health, fitness streaming makes another niche idea to build a website like Netflix. You can start a fitness subscription service to bring you live studio workouts to your clients or can start a platform that connects several studios worldwide to stream fitness classes.
For example, Booya fitness is a similar subscription-based fitness platform that streams dozens of workouts on demand from 30 different studios. From Strength training to Boot camp, HIIT to yoga, and Pilates, they have different types of online classes.
Starting a Netflix styled sports streaming platform is another great idea to enter into the streaming industry. Recently the Premier league revealed its plans to create a Netflix-styled sports streaming service to revolutionize how English football is consumed. Many leading brands are planning to enter into the sports industry and social media is already talking about this.
If you are planning on how to create a streaming service, sport is a great niche to start with. Or if you already have a streaming platform, sport is a great niche, to begin with. If you can start a sports streaming channel as an additional venture to leverage the opportunities offered by the sports industry.
For example, the Foxtel Australian pay-TV company has launched its sports video streaming subscription services that offer live and on demand sports programs from ESPN, Racng.com, Fox Sports, beIN sports, etc.
When you know about the niche you are going to target, it is easy to plan your content. Plan what kind of videos you are going to create to engage the target audience in your niche. Get clear on what your audience can expect when they subscribe to your video on demand service.
Here are some of the important things to consider before starting with content building.
- The length of the videos- Will your videos be short or long?
- Are you planning to roll out your content as a series or a one-one episode?
- Will you be curating the content from different content providers or are you planning to create your own shows?
The answers to the above questions are solely based on your requirements and goals. You have complete control over the content you create.
Alternatively, when creating your own streaming service, you can also buy content from authentic global content marketplace for film and TV rights. Content marketplaces are trusted global community buyers. Content search, negotiations, transactions and all the other processes are done online.
These online content marketplaces partner with leading Hollywood trade bodies by adhering to global industry standards for rights management, material delivery etc. Likewise, you can also sell your content on such platforms. For example, Vuulr is a reputed content marketplace for buying films and TV rights.
The next era of differentiation in entertainment is defined and propelled by the increased demand of the audience for the live and shareable experience. Viewers want to get close, more engaged, and better connected with the shows they live in both the physical and digital world. For the licensing industry, this makes a great opportunity to create products for the audience and make a hefty amount from the deal. To start and launch a VOD service with the latest Hollywood movies, old classics, and TV shows is an expensive affair with the cost running into millions of dollars. When estimating how much to start a streaming service, the most significant thing to consider is the licensing cost to acquire the content.
In 2015, the Wall Street Journal reported that out of Amazon, Hulu, and Netflix, Netflix has planned on designating the most funds towards acquiring content as shown below.
Curating content for your video on demand service involves constant collaborations with content providers to acquire and maintain compelling content. If you are planning to create your own streaming service on a large scale, it might not be easy to acquire the license as the production houses might have already sold their rights. In that case, look out for small production houses looking for online distributions.
Here is a brief description of how content licensing works.
As far as video streaming goes, content licensing involves 2 main parties- the broadcaster and the content providers. The agreement between streaming platforms and content providers will essentially offer permission to stream TV shows and movies on their platform. The terms and conditions can be changed in each renewal.
To make it clear, there are only 2 ways to acquire a license for streaming service.
- You can rent the show or movie directly from an authorised distributor.
- Contact the copyright holder directly.
One of the main reasons why Netflix started to create its own content is the fact that licensing costs for new content are so high. When Netflix rolled out House of cards back in 2013, Netflix changed the TV games and amped up its popularity and revenue.
Since then, ‘Binge-watch” and ‘Netflix and chill’ have been a norm in the streaming universe. Netflix has dramatically increased its original production releasing what seems like a dozen new shows and movies every week. Likewise, you can invest in the originals production to save on licensing costs and to gain a competitive advantage in the streaming industry.
Many people talk about business models these days. But what does that really mean? We have already discussed the business model of Netflix. -It is basically how it monetizes its products and services. But is the subscription model the only monetization model for video streaming services? We are going to discuss the same thing here. When it comes to starting a Netflix style business, your business model is the decision about how you plan to make money and intend to add value to your target audience
The monetization strategy is the first thing you need to decide the moment you plan on how to create a movie streaming app, but most businesses make the mistake of postponing it until the end. However, this is not the best approach as monetization methods are the most significant part of launching a video on demand service and it must be chosen way before starting.
Here are some of the common monetization methods adopted by video streaming businesses that you can choose from to reach your business goals.
Subscription Video On Demand (SVOD):
SVOD is the most common monetization method followed by most streaming services.
Netflix, Amazon Prime, and Hulu are some of the prominent examples of VOD services following the SVOD revenue model.
In this monetization model, users need to pay a monthly fee to gain unlimited access to the content library. You can further diversify the subscription model by different plans for the subscription like Netflix does. Subscriptions are mostly auto-renewable and users have the flexibility to cancel the subscriptions anytime.
Advertisement Video On Demand (AVOD):
Advertisement monetization methods allow viewers to watch the content for free, but they have to watch ads at different points through the video. Video platforms and content providers share the revenue earned from advertisements.
YouTube is one of the most prominent video streaming services with a global success story following the advertisement monetization method.
Ads are broadly classified into Pre-roll, Mid-roll, and Post-roll ads.
Pre-roll- Ads that play at the beginning of videos.
Mid-roll- Ads that play in the middle of videos.
Post-roll- ads that play at the end of videos.
The ads can be skippable or non-skippable depending on the ad network and the advertiser.
Pay Per View or Transactional Video On Demand (TVOD):
TVOD is another monetization model where users just pay for the content they watch. This works like a digital version of a DVD store where you can purchase or rent DVDs and pay just for that.
iTunes is one of the popular examples of a TVOD monetization model.
A hybrid monetization model is a combination of SVOD, AVOD, or TVOD in any pattern. Choosing a hybrid monetization model allows you to monetize your content to satisfy the interests of users with different preferences. When you create a website like Netflix, there will be some users who would like to access the content for free, and some who like to gain unlimited access to your content, and there will be people who just want to pay for individual videos they want to watch. A hybrid monetization model allows you to serve a broad target market and monetize your content in several different ways which is beneficial for your service from a business perspective.
How To Create a Movie Streaming App?
If you are looking to find out how to start a streaming service, one of the best aspects is to create a streaming platform like Netflix. To launch your streaming service, you can either develop it from scratch or use a white label solution which we will discuss in the coming section.
Before learning how to start a company like Netflix using a white label solution, let’s look into the technology stack of Netflix and the important features of a video streaming site like Netflix.
The Technology Stack of Netflix:
Netflix servers over 140 million hours of content every day to access the world. Building a system that can scale to that many viewers while delivering HD videos with no lag requires a lot of engineering effort. The technology stack of Netflix is to be complemented in backing their high-quality streaming services.
When Netflix was physically delivering DVDs to customers, they had on-premise data centers that housed databases and apps and maintained inventory and customer billing. However, when broadband became the norm and customers started using smartphones, Netflix started moving away from a traditional data center and harnessed the power of the public cloud. Netflix leverages Amazon web services (AWS) to support seamless global delivery and allows the streaming giant to deploy thousands of servers and huge storage within minutes.
Here is an overview of the entire Tech stack used by Netflix.
Features of Netflix-style VOD Platform:
When considering how to make a website like Netflix, it is important to understand the essential features of a video streaming platform. While your VOD platform is unique with your requirements and goals, most video on demand features is common to all streaming platforms.
Here are the important features for users, content creators, and for the admin.
The user interface (UI) and User experience (UX) are 2 significant aspects of any video streaming service. When creating a Netflix styled VOD platform, make sure you customize your VOD site to deliver an awesome viewing experience to your audience.
The homepage of a VOD platform is the first page your audience sees and where you feature the shows and movies. You can use the customer data to create a more personal homepage to enhance the user experience.
Account Creation and Login:
To allow your users to access your video streaming platform, they need to create an account and login to your platform. Offer different ways for your users to sign up and log in to your platform including login features.
After the homepage, the user profile is the next important aspect which is a virtual dashboard that helps users to navigate through the website and gain insights. Allow your users to create multiple profiles and manage content depending on the maturity level.
Powerful Search and Recommendations:
Integrate the powerful search and recommendation in your VOD platform to make it easy for your users to find the content they wish to watch. Add a powerful search with advanced filters to search for videos by topic, video length, genre, language, most popular, most watched, etc. Content recommendation is another important feature that recommends content to users based on their interests and viewing history.
Easily manage your video content and make it instantly available to stream with the video library feature.
A video player delivers the best possible viewing experience to your target audience. Integrate analytics to your video players to gain significant insights.
Payment integrations are one of the significant features of Netflix like website streaming service demand. Allow your users to make payments by their debit card, credit card, wallets, or any payment methods that are popularly available and secure.
Video Creation and Management:
To allow content creators to upload videos, you need to integrate video ingestion and management features. Make sure managing the video library is simple for content creators. Allow content creators to create and upload videos, organize, search media, create playlists, edit, and modify the information.
Offer support for several monetization models including (SVOD), and (TVOD) pay-per-view (PPV).
Promotions & Coupons:
Generate promotional codes and coupons to offer discounts
Multiple Upload Channel:
Enable your users to upload videos using an array of options such as YouTube link, Amazon S3 bucket, normal uploads, and a website link.
This feature allows you to add detailed metadata to your content. Help users discover what they want to watch across any platform.
Allow users to easily create subscription plans, manage the prices, details, and more.
Add multiple layers of security protocols so that user data stays secure and free from any threats or data losses in the future.
Provide the ability to store the earning in the wallet
Integrate powerful analytics and reporting systems to analytics and measure the performance and user engagement in your VOD platform.
An admin dashboard is another essential feature for content moderation, payment management, advanced analytics, and more.
Choose a video streaming solution that allows pre-integrated notification engine integration to update your users about new content arrivals or send other custom notifications.
Include a multilingual system that gives the best user experience. It allows visitors to view the website in their own preferred way.
iOS and Android Apps:
Allow users to create native Android and iOS app with their own branding for screens of all sizes with features like offline streaming.
How to drive traffic for a Netflix like business?
Once you have made a smart business plan to start a streaming service and finally launched your service, now it’s time to think about driving traffic to your video streaming platform that Netflix has been stealing all this time. Entertainment videos by its very nature are appealing and don’t need much of a push. However, devising a marketing strategy to reach your service to the right type of target audience is critical.
Here are some of the effective strategies to drive traffic for a Netflix like business.
While being an old marketing strategy, email marketing is still one of the best communication strategy video streaming services can leverage to drive significant results. Email still is one of the most effective customer acquisition channels. For enhancing your chance of increasing the open rates of your emails, the best tip is to personalise every email you send to users. You can efficiently use bulk email campaigns as well, but ensure you use customized email campaigns when required.
Email marketing is one of the strategies that Netflix used to drive traffic to its platform.
Affiliate marketing is another effective and ROI centric marketing tool you can leverage to drive sales to your website. The structure of affiliate marketing is in a way that you pay someone for promoting your video streaming platform when there is a paid conversion.You pay a small percentage of each sale to the business partnering with you.
You can either run your own affiliate programs from your own website by using any affiliate tools to pitch and manage affiliates. The next option is to connect with affiliate networks to promote your products and services. CBS all access is a reputed brand that offers affiliate programs for websites to collaborate with other businesses to start promoting and earn commissions from the interaction.
Paid advertising is an online advertisement model that is helpful to drive traffic to websites where the advertisers pay the ad network when the ad is clicked by users. When it comes to paid advertising, there are several ad formats to choose from and limitless ways to reach new customers. Search ads and display ads are the two popular types of options that advertisers can choose from.
- Search Ads
Search network is one of the most common options you can choose to run your advertisements. According to the Google economic impact report, most businesses on average make $2 for every $1 spent on advertisements. You can use google ads and capture searcher intent to run your ads successfully.
- Display ads
Display ads are a form of online graphic advertising where you promote your services through banners of other ad formats like images, videos, flash etc. on social media, apps, and websites. For example, see the Netflix ad posted on Facebook below. The ad helped to generate serious interest and engagement for a new release of Netflix.
Download Our Streamview(Netflix Clone) Lite Version
YouTube advertising is another marketing tool you can use to reach more viewers on YouTube across different devices. Google has already announced that it will allow advertisers to target viewers on YouTube based on their Google search history along with viewing behaviors on YouTube. One of the advantages of YouTube advertising is that it is relatively less expensive to target on YouTube compared to Google Search.
Netflix also uses this powerful tool to promote its shoes. For examples, Netflix launched a YouTube pre-roll campaign to promote the classic series Friends on its platform. Netflix selected some of the top searched videos on YouTube and created pre-roll ad campaigns to promote the show.
Social Media Marketing:
Another important thing is to have the right social media strategy in place for your VOD platform which will have a significant impact on how your streaming service is performing among your target users. Finding your target market and serving them according to their interests and preference will help. Optimize your streaming platform for search engines by carrying out extensive study and research on keywords.
If you take Netflix for example, Netflix pays huge importance to be connected with its audience in social media bagging in high social engagement. This is yet another cost-free marketing strategy you can employ to maintain an edge over your competitors in the streaming space. It announces when a show is released and retweets the similar posts as shown below.
Not just that, Netflix has a separate social media page called Netflix helps where it talks exclusively about technical issues and errors to help users out with the problems they face.
Plan a strategy to post a certain number of posts every day. But social media is not just about the number of posts but about user engagement. The quality of content is very important when it comes to driving engagement to your posts.
And when a social issue comes up you have to take up your stand to express your support like Netflix does here.
Even though it is said that viewers don’t like to watch commercials, some of them actually like commercials during big games which is a great opportunity for streaming brands. That is why TV commercials are still one of the powerful marketing tools streaming services can leverage to promote their shows. I’m not talking about any random TV commercials, but powerful and high impactful ones like super bowl advertising.
Super bowl advertising is the content advertised within super bowl, the annual championship game of the National football league(NFL). While Netflix has announced that it will not be a part of the big game in 2020, Netflix has aired its “Our planet natural history series in 2019 using super bowl ads.
How Much Does it Cost to Start a Streaming Service?
Now let’s come to the most important section. How much does it cost to start a streaming service? The major part of the total cost of development depends on how you choose to create your streaming platform. As you might already know creating Netflix style websites from scratch is the most elaborate and expensive way, which might cost you a fortune.
Building a website like Netflix using a white label solution can be a good and affordable approach. The best choice is to get a fully customized Netflix clone script that can personalize the design and features according to your requirements and goals.
StreamHash is a top-notch white-label video streaming solution provider with a blend of experience and proficient team who have delivered successful streaming solutions according to customer requirements.
With 4+ years of expertise and over 300 clients, StreamHash has managed to create a brand of its own helping video streaming business to thrive in the highly competitive digital era. StreamView is a powerful Netflix clone script from Netflix to launch your own video on demand service like Netflix. If you are looking for a clone script solution that leverages modern technology and needs a 100% source code for a one-time payment, StreamView is all you need.
However, apart from product development, there are some of the additional costs you have to bear, which are as follows.
Domain Registration and Hosting Plan:
You probably might know this already; you need a brandable domain name for your video streaming website. A domain name must be unique to your website and you need to pay a registration fee of around $20-$30 for a year which you have to renew annually. The next thing you need is hosting to power your website. When a user arrives at your site, the host will deliver your sites to the browser which will then render them as a good and usable website.
Next, to host your videos, you need the service of reputed cloud service providers. You can consider the digital ocean which offers cloud computing services to businesses without compromising on performance. For a minimum ram of 4GB, it costs around $20/month.
Some of the other suggestions are AWS EC2 server where you pay as per your usage and Linode which varies from $10/month for 2 GB to $960/month for 192 GB.
SSL certificate is an essential security feature required for every website. SSL certificates are data files when installed on a web server, activates a padlock and https protocol and allows secure connections from a web server to a browser. SSL is generally used to secure logins, data transfers, credit card transactions etc. Wildcard SSL certificate is one of the recommended SSL certificates that cost around $50-$75/year.
Have a look at the SSL certificate of Netflix.
App Developer Accounts:
Now that you have learned how to create a movie streaming app, you also need to understand that launching your app begins with submitting your video streaming app to the app stores, both Google play store and Apple store.
- Google app store fee is $25 which is a one-time payment.
- Apple store fee is $99 and must be paid yearly.
Content Delivery Network:
The content delivery network is a system of globally distributed servers to transfer media files. Have you ever wondered how Netflix delivers videos quickly and promptly to a huge number of users simultaneously? That is because of the Power of a CDN. Integrating a CDN to your video streaming website is essential for prompt and lag-free video delivery. The price of a CDN depends greatly on the number of videos your streaming platform has. On average it comes around $50 per month.
How StreamHash can help with creating a video streaming platform?
StreamHash offers Netflix clone script solution that allows you to create a professional video on demand website in return for a price that you would ever imagine. Create and launch the best streaming platform for your audience and providers with a robust admin dash with which you can modify and integrate customized features at any time.
Here are some of the aspects that contribute to the distinctiveness of StreamHash.
Being an absolute white-labeled solution, StreamHash helps to create a Netflix-like website with all the basic features and customizations according to your unique requirements and goals.
With 6 years of expertise in the video streaming industry and reputed clientele, we have valid expertise in the streaming industry creating solutions like Netflix in different niches. We boast a combination of a highly skilled team who are well versed in the field.
When it comes to the price, there is a one-time cost including lifetime upgrades. The price varies from $699-$199 which is very cost-effective compared to the overall cost to develop your Netflix-like platform from scratch.
We offer complete after sales technical support and assistance after the product is delivered to you. Our team of experts will be at your side to guide you with customizations and even after the final delivery.
We focus on delivering the best quality service to our clients to promote the growth of their business. We owe our industry success to our client strength. We have a long term association with our clients.
Here are some of our prestigious clients who are running their business successfully with StreamView software.
The video streaming giant Netflix is categorized as one of the simplest and most used services in the world, according to SiegelGale. Netflix has become a part of our lives today, it allows us to view lots of shows and movies without going in the hole financially. Therefore, planning about how to start an online video streaming is a lucrative business idea. Building a video streaming business will not cost you a bomb anymore! For any expert guidance and assistance on creating an online video streaming website, contact us right now!