In the age of the internet, it is super easy to entertain oneself by watching movies in the evening with popcorn in hand. What does this mean for a person who has an idea to start his own streaming service like Netflix? The answer is short. It means money. Why? Think about that. Netflix more than doubles its year-over-year profits. Just last year, the company made a 140% improvement on net income skyrocketing to a stunning $1.7 billion.
How to Start Your Own Streaming Service like Netflix and still be competitive?
To make a streaming service like Netflix and still be able to compete in the market, you need to think out of the box. Innovation is the only answer to the outstanding performance of streaming giants like Netflix, Hulu, or Disney.
Before we elaborate more on the ways to generate money from a streaming service like Netflix, let’s see what the gains are.
Why is it Worth Creating a Streaming Service?
Some statistics
will give you an answer.
US Video Streaming App Revenue
| Year | US Video Streaming App Revenue |
|---|---|
| 2016 | $9.3 billion |
| 2017 | $12.5 billion |
| 2018 | $15.2 billion |
| 2019 | $18.8 billion |
As you can see, in three years the streaming service doubled its revenue. This figure is a lot higher in 2022. Partly, this is due to COVID as many people stayed indoors and wanted to keep busy. Here is the projected revenue from the streaming service.
Projected US Video Streaming App Revenue
| Year | US Video Streaming Projected Revenue |
|---|---|
| 2021 | $27 billion |
| 2022 | $30 billion |
| 2023 | $34 billion |
| 2024 | $38 billion |
These figures should make you think that there are good prospects in the industry. The trick is to manage to compete with streaming giants like Netflix, Amazon, Disney, and Apple.
The stunning number of Netflix subscribers should not make you lose hands. The question is who can innovate the most to gain the biggest audience share. Today, streaming giants like Netflix, Amazon, Disney, and Apple understand that they cannot keep subscription fees high. If they continue relying on high subscription money, most probably the consumers will opt for small groups they believe to be worth the money.
So, what do consumers want? Surely, they want to get the most and spend less. They want a catch-all service, something that will offer more than video and TV.
It’s all about innovative solutions. With the old methods, new groups cannot compete with streaming leaders.
So, is it worth creating a streaming service like Netflix? The answer is ‘yes’ if you think out of the box. Only then you can have your say in the market.
Steps to Create a Streaming Service App
If you google “how to create a streaming service app”, you will get step-by-step instructions. You can read other guides, for example, a guide on how to make an app like TikTok. But in this part, I would like to focus on ‘how to create a streaming service app like Netflix that is competitive’. Seems not a very easy task since Netflix and other industry leaders have gained the most audience and rule the industry with vast financial resources.
In the above section, I recommended thinking out of the box. This is the only way to have a place in the overcrowded market. And here are some steps.
1. Focus on a niche
Why do I say that you shouldn’t go for a service like Netflix that covers all potential viewers? If you do, you will need to compete with established companies. However, if you focus on sports, education, travel, kids, etc, chances are high that you will gain your portion of the audience.
A second option to offer more than Netflix does. For example, offer some games or even make a hybrid with other apps, like a shopping app.
2. Licensing
You may gain the right to public performance in two ways:
- You may rent a movie directly from a distributor that is authorized to grant such license;
- You may contact the copyright holder directly.
What does Netflix do? Someone else produces the content and Netflix works out a profit-sharing deal to be the distributor. The second option is to produce the content oneself as Disney does.
You need to have an answer to the question “am I ready for the expenses?” Netflix spent an astounding figure of $13 billion just four years ago on content licensing and production. In the same year, Netflix earned about $16 billion. So, it really was worth the game.
I guess, if you are a newly established startup, it will be hard to buy expensive content. You will need to start small.
3. Consider the mobile platform
You may think that a responsive website platform would be enough but that’s wrong. Even simple statistics would tell you that most users spend their time in front of smartphones. A native mobile app on iOS/Android is convenient and gives a better user experience.
4. Build your audience
You need to spread the word that you are in the market. Get on social media, YouTube, distribute newsletters, do email marketing but build your audience from scratch.
The Cost To Start a Streaming Service
Now the big question. How much should you spend to start a streaming service? I am not going to give you an exact answer to this question but you will have an idea of what factors to look at and what determines the price.
It's simple mathematics. You need to multiply the development hours by the hourly rate of your software engineers. So, all you need to know is how many hours are needed to produce a streaming service and what is the hourly rate.
Here is the breakdown of hours on development.
| Research and analysis | 80+ hours |
|---|---|
| Building the prototypes | 80+ hours |
| Design | 250+ hours |
| Backend development | 450+ hours |
| Development | 1190+ hours |
Now you need to figure out the hourly rate. The main factor that determines the rate of the development team is the location of your software engineers. Here is a breakdown of developers' rates by country and region.
Suppose your team will spend 2000 hours on development. The price in Eastern Europe for a streaming service will range from $60000 to 1300000.
If you wish to develop a Netflix-like streaming app, you should be ready for the following costs:
| Development Module | Development Cost |
|---|---|
| iOS App Development | $37,000-$54,000 |
| Android App Development | $38,000-$54,000 |
| Back-end Development | $37,000-$48,000 |
| Front-end Development | $29,000-$38,000 |
| Total Cost | $141,000-$194,000 |
Quite an impressive figure for a starting business, isn't it? But don't give up! There are two more ways to take.
Firstly, you can just build an MVP and attract investors. Secondly, you can build a clone.
An MVP is the basic version of your product with main functionalities. Instead of building the final product, you need to build a prototype and test that in the market. With all the feedback collected and analysis done, you have more chances to attract investors.
If you want to build a clone of Netflix, the cost will be around $5000-$8000 approximately. Here, you purchase a Netflix-like app clone which is hard to do. Then all you need to do is change the code applying the design and app features that you want for your video streaming app.
Wrapping up
The statistics on streaming service is inspiring. However, big industry heads normally invest good money to keep their leading role in the market. How to compete with them? You can easily make a streaming service like Netflix if you spend some $100 000, for example. But the key is not money. The key is to come up with something that will attract users more than Netflix or Hulu do. My recommendation is to go for the streaming service business only if you believe you have a new say. And if you are in short of money, there is always a way to develop an impressive MVP and attract investors to your idea. In short, it’s not about money. It’s about the idea.
Once you have your out-of-box idea, we are here to help put it into practice. Contact Addevice for solutions that will meet your needs.
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