Netflix is a well known American Entertainment Company. It is a leading company in the field of providing streaming and video on demand services- both online and DVD by mail. On 29th August, 1997, Netflix was founded by Reed Hastings and Marc Randolph in California. Though it started its business with DVD sales and Blu-ray rental services, it ventured into vod services in 2007. In 2017, this vod platform explored into the content-producing industry with “House of Cards” being its debut series. Since then, it has released more than 126 original movies and television series under its banner “Netflix Original”.
Netflix has emerged as the largest video on demand platform in the entertainment industry. Streaming on Netflix is available in 190 countries, which clearly shows its wide reach. As of July 2017, Netflix had a whopping subscriber base of 103.95 million worldwide, which includes 51.92 million in the United States only. As of 2016, revenue generated by Netflix is around $8.83 billion, and its net income is at $187 million.
Netflix Business Model:
The highlight of Netflix Business Model is that it categorizes its users based on psychographics and not on demographics.
Users have been segmented into 3 basic groups in terms of psychographics:
Users who are busy and don’t want to go out for movies
Users who love watching movies and rent them to watch
Users who want to save their money and want to have the best
The initial step is to purchase the commercial rights or acquire a license of the streaming content from their original production houses.
Managing and maintaining a smooth platform which can be used to broadcast the acquired content seamlessly.
Offering various kinds of attractive offers such as a free one-month subscription to lure new users to join.
Providing satisfying service to the users so that the new users convert into paid subscribers, and existing users become recurring subscribers.
Updating the platform with new and exciting content regularly so as to maintain the subscriber base.
How Netflix makes Money:
For the video on demand business, Netflix offers 3 different membership plans for the subscription which is based on streaming quality and screen count for accessing the content concurrently:
Standard Definition Plan: It allows streaming of content in standard definition quality on a single screen at a time.
High Definition Plan: It allows streaming of content in High Definition quality on two screens concurrently.
Ultra-high Definition Plan: It allows streaming of content in Ultra High Definition quality on four screens concurrently.
The subscription fee for these plans varies from country to country.
In the DVD rental services, the membership plans differ by the number of DVDs a subscriber possess during a specific time and number of discs per month. In order to enjoy streaming on high definition Blu-ray discs, in addition to the standard definition, subscribers have to pay additional amount.
Cost incurred by Netflix:
The profit generated by Netflix cannot solely be assessed by considering the membership plans. For that, various expenses incurred by Netflix have to be considered. These are explained below:
Licensing Cost:
In order to achieve a legalized platform for streaming series and movies, Netflix has to invest to acquire license and content which varies for different content.
Content Acquisition Cost:
Content Acquisition is an essential component for vod business in case of Netflix. This involves procuring streaming and DVD content from distributors, studios, and other mediums, which are done through direct purchases, revenue sharing agreements, and license agreements. For delivery of streaming content, Netflix takes the help of its own content delivery network (known as Open Connect) and third party content delivery networks. For delivery of Discs in the United States, there is a network of shipping centers for delivery and returns of DVDs which are also managed by Netflix.
Production Cost:
In 2013, Netflix started its own online library of films and television series under the brand name “Netflix Originals”. This strategy not only helped Netflix to promote its own exclusive streaming content but also helped it to evade licensing costs. However, the production cost for the Netflix Originals content requires very high expenditure.
Marketing Cost:
With the emergence and acceptance of vod services, many more video streaming players have joined the bandwagon. This has increased the competition and there are major players as well as new players who are giving Netflix a tough competition, such as Hulu, Amazon Prime, Hotstar, etc. To get the edge over its competitors, Netflix has to invest a huge amount for its marketing. The marketing cost involves payments to affiliates, expense on advertisements and expense incurred on device partners. Besides that, the company has to also bear the first month expenses for every new subscriber as the first-month subscription is free for new users.
Research and Development Cost:
Research and development sector is an essential sector of any industry, and this is applicable to Netflix also. This department is responsible for determining the growth of an industry in the future. Netflix invests a high amount of money in ‘Netflix Inc. Research and Development’ department. Netflix Inc.’s research and development for the three months ended in Jun. 2017 was $267 million. Its research and development for the trailing twelve months (TTM) ended in Jun. 2017 which was $965 million.
Technology and development Cost:
Netflix has a huge subscriber base of millions and they may stream content on Netflix at the same time, which will increase the traffic on its server. So, in order to provide hassle-free and smooth streaming experience, Netflix has collaboration with many ISPs to reduce the load on its own server, by using the embedded deployments of Open Connect Appliance. The company has to bear heavy costs for the collaboration. Technology and development costs also include expenses involved in designing the application for all the latest devices or updating the application for the existing devices, streaming delivery technology costs, and other infrastructural costs.
General and Administrative Cost
These costs include payroll and other expenses for the corporate personnel. These also include professional and partnership fees related to administration of the company.
Miscellaneous Cost
Besides the above-mentioned costs, Netflix has to bear other costs such as payment processing fees, the cost for dispatching of discs, and distribution of costs for the streaming content library, etc.
How StreamView can be used to replicate Netflix
Streamview is one of the best movie streaming softwares. With the help of Streamview, one can easily launch a Netflix-like venture. You will get Netflix clone script which will help you in starting your own video streaming site. Streamview will provide you video on demand platform which is highly scalable and can easily be customized as per your needs and requirements. You can modify the UI, add features to the mobile app, and modify its front end and do much more. Apart from this, you will get all the features you are getting from Netflix and the executives will work with you so that you can make all the changes you want in the design, development, hosting, deployment, and maintenance.
Nginx Server: Stremview will convert the HTTP format into RTMP and HLS format for your website, iOS, and Android. This will enable the user to watch the video without waiting for the buffer time. You will feel the difference yourself.
Upload Videos: You can easily upload unlimited number of videos and can use any channel to do so. Some of the channels supported are Amazon S3 Bucket, YouTube link, Website Link or Normal uploads. Steamview supports all.
Subscription: You can upload trailers for your videos. Allow users to watch them without any fee but to watch the whole video let them subscribe to your platform or let them pay for it. It is the best way to earn.
Pay Per View: Some users might not be willing to pay for the whole month as they are surfing other channels as well. So, with Streamview, you can allow them to pay one time for the video. Use the Pay per view feature of Streamview, which you won’t get anywhere else.
SEO Optimized: Streamview provides the best digital marketing features. You will get all SEO settings which you can set as per your need from the admin panel. It will help you in getting higher ranking in the search results.
Banner Videos: You can use featured videos on the banners to get more clicks and to make more money. You will get more subscriptions via this feature.
Streamview has some of the amazing features which you won’t get anywhere else. That is the reason it’s getting such a high demand in such a short time. Use it to witness the difference yourself.
If you have any doubts or concerns, feel free to drop a line or two in the comments section. I shall reply in a day or two. Keep watching this space for insights on video on demand services. Subscribe to our newsletter to learn more about various VOD business models. My best wishes are with you and your video streaming venture. Cheers!
So, the light bulb in your head has flicked on, compelling you to enter the online video realm. And you can’t wait to get started. The online video space is an endless landscape of interesting content, innovative people, and multiple formats. Whether you’ve chosen to go the live video route or the on-demand route, there is a selection of technology frameworks you can choose from to spark the beginning of your journey.
2017 has seen the rise of StreamHash, a company that specializes in creating avant-garde video frameworks for an assortment of streaming needs. With StreamTube for video sharing, StreamView for over-the-top services and StreamNow for live streaming, StreamHash has you covered all through. Once you’re done setting up your video service, your next step should ideally be to monetize your videos. In this guide, we walk you through some of the best practices in the industry and how they can help pave the way to your success.
Step 1. Pick a Monetization Route:
When it comes to picking a route to monetise video your videos, there are three time-tested options that are as effective as they are easy to implement. These can be executed either individually or together, depending on your need.
A. Advertising:
Advertising, done effectively, will rarely let you down. Having proved its effectiveness on a range of formats, including television, radio, and print, the digital realm has now embraced it wholeheartedly. Advertising is popular for several reasons. For one, it lets you root your marketing strategy in an enduring, sustainable monetization model. Advertisers are easily lured by a compelling audience, and as long as you can show them value, you’ll have enough reason to reign them in. Also, advertising lets you provide free content to users, meaning that customer registration will see greater traction than if your content were priced. The result? Better advertising opportunities.
Allow us to tell you how to monetize videos via advertising by digging deeper into the two main advertising models favored by broadcasters.
A.1. Digital Ad Platform:
A digital ad platform is possible through VAST, a term that stands for Video Ad-Serving Template. This service exhibits many of the same features as Google AdWords and is tailored to monetise video content. Its setup process is simple and straightforward.
A. 2. Direct Advertising:
Although a digital ad platform can be convenient, it will likely make you less money. Direct advertising is a ground-up effort, requiring you to build your service from scratch. Scouting for potential clients, closing deals and stitching ads onto your platform can be exhausting but can also yield you a better return as a result of precise targeting. It’s an effective way to monetize video content. You could also introduce the concept of banner ads, inviting advertisers to bid for prime advertising space on your website. Despite the advantages of direct advertising, the process can be expensive. Sourcing advertisers can entail a tremendous effort and a subpar turnout can press your bottom line.
B. Pay Per View:
If you monetize your videos via pay-per-view, or PPV as it is known, you can provide access to users to standalone programmes at a predetermined rate. This format has some merits. If your content is worthy, you can expect significant traffic on your website, accelerating your revenue stream. On the other hand, if you offer premium content, and cater to a small audience, your revenues could still be high. However, PPV doesn’t encourage customer stickiness. By serving your users on a per-piece basis, you may fail to build customer loyalty. PPV can also be costly to market.
C. Subscriptions:
Subscriptions can offer users a ticket to unlimited content on your website. Unlike a PPV model, a subscription service serves as a generous gesture to customers while also working as an effective tool to monetize video content. If you’re thinking Netflix, you’re absolutely right. If you monetize video content through subscriptions, you can encourage loyalty and stickiness while also enhancing user experience through continued usage. Subscription services also offer better analytics, allowing you to discover which types of content receive the best response from users. Like any model, subscriptions come with their share of demerits. A subscription service warrants a bank of amazingly curated content that users would be willing to pay for. Striking a balance between customer acquisition and retention is imperative.
Step 2. Pick a Video Streaming Platform
We’ve already mentioned how an effective video streaming platform can work wonders for your business. By picking a superior turnkey framework, you’re saved the trouble of piecing your streaming service together yourself. You don’t have to go through the rigmarole of hiring manpower, training your resources and investing energy and time into it in the process. Here’s where to look for the technology piece of your enterprise puzzle:
For Live Streaming:
Live streaming is becoming increasingly relevant today, with enterprises geared towards engaging with and reaching out to customers in real-time. StreamNow is an ideal technology fit for a business rooted in live streaming. Built to be a close-knit community, the platform allows you to craft your streaming service akin to a social media page, offering users the option to follow each other. The framework also allows users to share moments by way of a status bar. The key to monetise video content on StreamNow lies in its banner ads and dynamic subscription plan.
For Over-The-Top Content Streaming
If you see yourself building a content library based on a subscription model, turn to StreamView. An intricately modeled framework that offers fluidity across devices, StreamView makes content consumption easier and more enjoyable than conventional streaming formats. It is also armed with an arsenal of personalisation features, a handy control console and a range of user-friendly functions. There are various inbuilt features through which you can monetize your videos on StreamView.
For Shared Video Streaming:
StreamTube can help you create your own version of YouTube. Let’s say you’re looking to set up an exclusive cooking site that invites users to share recipes and tips. In this case, StreamTube would be perfect. The technology features channel management and a host of payment mediums. You can monetise video content with banner ads and a dynamic subscription plan mechanism.
Step 3. Market Your Product:
Building an incredible video service will not reap results unless you get your product into the market effectively. Here are some ways that you can get the word out there:
Email promotions
Regular social media updates
Frequent blog posts
Contributions on other blogs
Conventional advertising including television, print, and radio
Search engine advertising
Influencer sponsorships
There is no holy grail to monetise video content for any business. Consider your audience, your content and your reach. Monetize your videos a little at a time to see what works for you. In time, you’ll discover your path in the world of video sharing.
There are two things that should top your priority list when you set out to start your own streaming platform: one, an excellent technology framework and two, an effective content delivery network (CDN). As far as streaming frameworks go, the kind of technology you choose largely pivots on the kind of streaming you plan to host on your website. For instance, if you plan on starting live streaming services, StreamNow is a fantastic framework. For over-the-counter entertainment, StreamView is your answer. And if you plan to start a video sharing service like YouTube, think of StreamTube. Each of these technologies is brilliantly coded and offers customized skins to make your service exclusive. Once you’ve picked your underlying technology, complete the circle by opting for a superior CDN service.
What Factors Should I Consider While Selecting a CDN Service?
Almost all CDN service providers are equipped to support video streaming. That said, each service has its own unique merits and demerits. Here are some factors you should consider before picking a CDN service.
Geographical Distribution:
The degree to which your viewers are geographically fragmented will play a role in how well your CDN service will work. Some of the more established video streaming CDNs are sparsely spread in certain regions; particularly in Asia. Regional CDN services are sometimes better suited to handle local needs.
The size of Event:
This is key. A large-scale event would need a special kind of CDN service to see it through. There is currently only a selection of video streaming CDNs that can support such events.
Monetary Investment:
Your financial commitment may be enough of a differentiator to filter out some CDN services. If you’re bootstrapped and prefer a piecemeal pricing model, pick a CDN service that fits your budget. Some video streaming CDNs ask for a large upfront investment.
What Are the Top 5 Video Streaming CDNs?
With your main considerations listed, browse through the five best CDN providers to take your pick.
1. MaxCDN:
MaxCDN has an international server footprint, rich with SSD-loaded servers. This web of servers augments the speed and performance of your website and allows you to create custom commands to control the functioning of your CDN service.
Key Features:
MaxCDN has a global reach and is spread across 90 countries. It has the ability to scale its load and also offers secure tokens, giving you the option to safeguard your content. REST APIs allow the integration of a variety of users, applications, and resources into your website. MaxCDN works seamlessly with auxiliary marketing platforms, such as WordPress and Magento, by offering superior plugins. The control console also gives you access to your domain with an added layer of security, created by SSL. The platform is adaptive and squares off fluctuations in speed and performance, giving users an optimal experience.
Monetary Investment – Free Trial + Price on request
2. CloudFlare:
CloudFlare is a veritable haven for broadcasters. It serves as a protective shield for your content and improves the speed of your website by keeping bots, crawlers, and threats at bay.
Key Features:
Once you have registered for its CDN service, you are instantly inducted into a global community, whose pathways are used to transmit your content. While you may think that setting up a CDN service may be bothersome and even overwhelming, you should know that CloudFlare will prove you wrong. With a setup process that will ease you through, you’ll find that you don’t need any hardware or software interventions to get your CDN going. Only a simple settings change in your DNS is required. CloudFlare offers a suite of analytics tools to let you delve into your user patterns.
Monetary Investment – Free Trial + $200/Month
3. Incapsula:
Incapsula is an incredible web of advanced networking, dynamic caching and content optimisation measures. It protects your website from threats such as DDos and effectively distributes data loads.
Key Features:
Incapsula’s notification system is equipped to report in real-time. Its CDN service operates by directing users to your website and then building a wall to block out threats. Video streams are then transmitted at speeds of up to 150% with a 60% lower-than-normal bandwidth consumption. Easy to install and activate, this CDN service comes with no additional hardware or software. It’s as easy as that.
Monetary Investment – Free Trial + $299/Month
4. Edgecast:
Edgecast is a video streaming CDN that is supported by a vast mosaic of servers spread across various geographies.
Key Features:
Edgecast is one of the only CDN services to offer live streaming support and handles fluctuations in web traffic effortlessly. Unlike most other CDN providers, Edgecast provides CDN services for dynamic as well as static content, enabling users to source streams as quickly as possible. Plus, with its analytics tool, you’ll be armed with regular updates and server reports. Tailored specially for rich media, it pairs well with Flash, Silverlight, and HTTP.
Monetary Investment – Price on request
5. Cachefly:
If your sole focus is speed, Cachefly’s a great bet.
Key Features:
Cachefly’s CDN service routes static content from your website to users up to ten times faster courtesy its network of 30 global points of presence (PoP). The locations of these PoPs lets content creators share rich content from one end of the world to the other at breakneck speeds. Specifically created as an on-demand CDN service, Cachefly upholds website performance and works to reduce timeouts and dips in performance quality.
Monetary Investment – $99 to $409/Month
Picking a CDN that’s right for you is as important as picking a pair of shoes that fit. Consider your purpose, your requirement and the kind of streaming services you plan to offer. Think of StreamNow, StreamView and StreamTube to breathe life into your brand. And select a CDN service that makes your platform stand out. It’s never been easier than now.
Let’s cut right to the chase. What is a content delivery network? A content delivery network, or a CDN, is as integral to video streaming as the camera you use to capture your stream. A CDN is a technology framework that transports various forms of content, quickly and economically, to myriad nodes. These nodes could include tablets, mobiles, set-top boxes, gaming consoles and web browsers. Regardless of where you are on the internet and what kind of content you’re browsing, it’s likely that every tiny fragment of data you’re consuming is enveloped in a CDN. CDNs are designed to solve a fundamental problem that plagues virtually every netizen: latency.
Latency is the lag that exists between when you give a web page a load command and when the page actually appears. While there are several reasons behind why the latency of a page may be high, the chief one is the geographical distance between your computer and the hosting server of the web page. A CDN resolves to reduce this distance, in turn, augmenting the performance of the website in question.
If you’re at the beginning of your video broadcast journey, remember to also pick a robust, versatile framework to pair with your CDN. Regardless of your need, Streamhash’s three new technology variants are ideal for every kind of webcasting brand. With StreamView you can create your own over-the-top entertainment platform, with StreamTube, your very own YouTube, and with StreamNow, an exclusive live streaming software.
How Does a CDN Work?
We already know that a CDN attempts to reduce the physical stretch between a web server and a user. Here’s a spotlight on how it really works in two simple steps:
Step 1. Cache Content:
A CDN doesn’t always visit a website server to fetch content. Instead, it resorts to storing multiple versions of content across geographies in storage banks called caches. These caches are also known as points of presence or PoPs.
Step 2. Quality Coverage:
By arranging content across various digital regions, users are assured superlative coverage. If a French user tries to access Indian content, for example, the content needn’t be routed from India. It can simply be fetched from a local French PoP.
Who Would Need a CDN?
CDN video streaming underpins more than 50% of worldwide Internet traffic today, and the number is only rising every year. Amazingly, many CDN video streaming services are free, and wrapping your web page in an effective CDN can significantly reduce your inter-country latency. However, for users within your geography, a CDN video streaming tool could actually slow down your website. This is because it could re-route local traffic to a remote PoP, when it could link directly to a user’s computer in the vicinity. Evaluate your requirement carefully to check whether CDN video streaming could make a material difference to your website performance. Sectors that embrace CDNs wholeheartedly include advertising, media, digital gaming, e-commerce, mobile, healthcare, education and government services. CDN video streaming presents utility for a variety of stakeholders. Here’s how.
For Technology Companies:
With video playing the main lead in most companies’ communication strategy, CDN video streaming becomes a coveted tool to stay relevant in the digital space. Also, as video gravitates towards an HTTP-based model, there is a huge amount of novel, the premium content being produced by content creators. A CDN enables these owners to draw revenue, safeguard content and reduce costs.
For Customers:
Why customers, you ask? Customers needn’t be acquainted with the concept of a CDN at any stage. They don’t need to be. However, the consumer experience is intertwined with the operations of a CDN. The fact that a customer can watch a video on YouTube at any time, without worrying about the whole clip buffering at one go, is thanks to an on-demand CDN. Think about which CDN video streaming tool will fit your content format the best, in order to give your customers a world-class viewing experience.
For Content Owners:
As a content owner, you ought to know which CDN can package your content in the most compelling way. An effective CDN video streaming technology can minimize costs, present users with seamless content and create new avenues for premiumisation.
What Are the Types of CDNs?
A CDN could manifest as one of three primary classes: a general purpose CDN, an on-demand video CDN and a live video CDN. Let’s take a closer look at each of these, and why CDN video streaming may be of value to you.
General Purpose CDNs:
General purpose CDNs have existed well before the advent of video. As mentioned earlier, you’ve likely come across them on the internet while scouring a website or streaming a song on YouTube. A general purpose CDN accelerates web traffic by retrieving cached content from various regions. CDNs, although nifty in their functioning, can be tricky tools to implement. They rely on a widespread server spread, whereas the server footprint in most countries is nascent. General purpose CDNs are also challenged by language fragmentation. Language clusters within a limited geography may warrant a plethora of CDN video streaming layers to facilitate penetration across markets.
On-Demand Video CDNs:
Over the years, CDNs have evolved and new formats have emerged:
Generation 1. Direct Download:
A direct download means that a video needs to be downloaded before it can be viewed. The challenge here is that while shorter clips can be downloaded quickly, longer ones, like movies and large applications can prove cumbersome and time-consuming.
Generation 2. Progressive Download:
Think YouTube and you’ll know what a progressive download is. The medium entails a bit-by-bit download, allowing a user to begin viewing content within the first five seconds. The premise here is that the consumption and download of the content will be concurrent, with the viewer being able to watch a part of the content while the rest is being downloaded. As internet connections improve, the speed of downloads is outweighing the bitrates required to deliver standard-definition content. Thus, progressive downloads are proving to be effective and practical.
Generation 3. HTTP Streaming:
HTTP streaming is tethered to adaptive bitrate delivery. This technology works to throttle on-demand content by breaking it down into tiny bits. Then, it streams each one separately at varying bitrates to tailor a particular stream to a user’s video player.
If you pick StreamView or StreamTube to get your streaming service going, an on-demand CDN is for you.
Live Video CDNs:
Now that we know that CDNs are typically used to cache data, here’s a question. What about live streaming? Surely, you can’t cache a live stream. And you’re right, you can’t. Enter, live streaming CDNs. A live streaming CDN can be crafted to either display ultra-high bandwidth pipes to transmit content instantly to users, or low bandwidth pipes that use reflectors to accelerate content transmission. Live streaming CDNs can be costly, especially when a viewer population is likely to fluctuate and possibly, peak. Plus, live video technology may not be in continual use, meaning that costs will not be adequately recovered. Having said that, live streaming is picking up steam in most spheres. In the years to come, live streaming CDNs will likely make it to mainstream communication. StreamNow would be an ideal layer atop a live streaming CDN.
A CDN can serve as a magic fix in smoothening content transmitted to your users. Integrate a CDN into your streaming platform to see the difference. A remarkable viewing experience awaits.
