How To Start A Streaming Service: Guide For App Ideas
In the second quarter of 2021, Netflix generated total revenue of over 7.3 billion U.S. dollars, up from about 6.15 billion in the corresponding quarter of 2020.
Do you want to know how to start a streaming service like Netflix?
We prepared this article to help you understand the best ways to create a streaming service. As you read the text, it will uncover the insights and valuable tips for building a streaming platform.
- Key statistics explaining why it’s worth creating a platform like Netflix
- How to start a streaming service with step-by-step instructions
- The cost of creating a streaming service in 2022
Why It's Worth to Create a Streaming Service
The success of Netflix, HBO, and Hulu is highly inspiring. Looking at the results of their work, many businesses have started thinking about creating streaming services like Netflix. There is a lot of sense in the decision to make such a service today.
Before we move on and define how to start a streaming service, let’s first look at some statistics. If you have any doubts about creating a similar application, they will resolve any of them.
- In 2019, the global video streaming market size was estimated at $42.6 billion. The market is predicted to grow at an annual growth rate of 20,4% from 2020 to 2027 and reach over 150 billion. (Grandviewresearch, 2020)
- The COVID-19 pandemic boosted the popularity of video streaming services. Overall, the industry rose by around 10%. Netflix registered a 50% growth in first-time installations in March 2020. The amount of viewership of Twitch increased by 31%. Grandviewresearch, 2020)
- The great part of revenue ($36 billion in 2022) will be generated in the United States (Statista, 2022).
- The number of users in video streaming services is expected to grow to 1,4 billion by 2026 (Statista, 2022).
- In 2021, Netflix’s total annual revenue reached over $30 billion. Netflix reported revenue of over $11,45 billion in North America. (Statista, 2021, Business of Apps, 2022)
- The net income of Netflix in 2019 reached over $5,16 billion. (Statista, 2021)
- The average revenue per user is expected to amount to $58.52
Even though the market has a lot of solutions, only a few applications take up the vast majority of the market.
|Number of Users||Prices||Funding|
|Netflix||214 mil||$9+/mth||$3.1 bil|
|Hulu||45,3 mil||$5.99+/mth||$683 mil|
|Disney+||129.8 mil||$6.99+/mth||$35 bil|
|Apple TV||40 mil||$4.99/mth||N/A|
|Twitch||140 mil||$4.99+/mth||$35 mil|
|Amazon Prime Video||157.4 mil||$8.99+/mth||N/A|
|Sling TV||10,99 mil||$30/mth||$63.4 mil|
There is no doubt that the market promises huge growth soon. Therefore, businesses ask how to start a streaming service that users will love. As you read the following chapter, you will learn everything about the process.
Step-by-Step Guide on How to Start a Streaming Service Like Netflix
How to create a streaming app?
The development of a streaming service doesn’t end with development. The process comprises of 9 main steps and a number of sub-steps:
- Finding a niche and USP
- Creating a business plan
- Content licensing
- Finding a reliable app development vendor
- Deciding on the video streaming app’s functionality
- UX/UI design creation
- Choosing technologies
- Marketing and promotion
- Feedback gathering and planning for growth
Let’s review detailed instructions on how to start a streaming service.
Step 1: Find Your Niche and Create USP
Before you move on to creating online streaming apps for video, you first need to identify your niche and unique selling proposition.
While working on this part of your application, it might not be good to copy an already popular solution like Netflix. Big names have a vast user base and operate all over the world. Competing with them is extremely hard to impossible for small startups.
You shouldn’t think about how to create a streaming service like Netflix; think about how to start a streaming service with unique features instead. Only this way will your solution have any chance for success.
For example, Netflix has a few USPs, like on-demand streaming of unique content, behavior-based recommendations, affordable prices, etc. You can see a detailed overview of Netflix’s business model canvas on the image below.
Netflix is a way to reorganize the TV value chain by removing time constraints for shows.
The streaming service makes money by selling subscriptions to its service packages. Of course, this strategy is not easy to implement. Netflix uses so-called “evergreen content”, the growth of the volume of which gradually increases the attractiveness of the service to potential customers (while the costs of audience acquisition campaigns are reduced).
Aside from traditional on-demand video streaming services, you can create a number of other solutions, including but not limited to the following general and niche streaming services options:
- sports events streaming
- video game streaming services
- educational streaming
- live-streaming of events (conferences, etc.)
Before identifying the product type for release, you need to understand the following factors.
- the market on which you are going to launch your new product
- potential niches where there is still a place for new solutions
- competition, their strengths, and weaknesses
- your target audience and their need in such a solution
After you have decided on key activities, you can create a business model canvas to structure the USP of your product.
The business model canvas comprises 9 blocks covering key activities, value proposition, resources, partners, revenue streams, etc.
Step 2: Create a Coherent Business Plan
You can’t decide how to start a streaming service without having a strict business plan that will guide all your actions. Thus, going through this stage and all its steps is essential for all startups.
- Find content creators
Video content is the basis of your streaming service. Before you move on, you need to understand what type of content you are going to use:
- Content that you create yourself
- Content created by third-part creators
It might be good to remember that the first option can take you only that far since you will need to allocate considerable resources to video production.
2. Choose the best monetization model
Without knowing possible monetization strategies, you cannot decide how to start a streaming service like Netflix and turn it into a successful business venture.
Here are a few monetization models that you can utilize:
- Subscription – this model implies paying some monthly or yearly sum for a service subscription.
- Pay-per-view – with this monetization strategy, users pay per each view, e.g., a movie, a series, etc.
- Advertising – placement of ads by other companies will help you cover the expenses and generate revenue. As a part of this strategy, you can include ads blocking option at an additional cost.
- Freemium – some content is available to all users. Other content might require payment per each view or purchase of a subscription to your service.
3. App location and content translation
When you create a streaming service, you might decide to launch it in a foreign market. If that’s the point, you will need to find companies that provide content localization services. Finding reliable companies that will become your reliable partners in the future might be a challenging task to accomplish.
Thus, you need to start working on this part of your business as soon as you decide to move beyond local markets.
Step 3: Legal Registration & Content Licensing
Knowing how to start a streaming service from technical is not enough. Another significant part of preparation is making the business legal. Aside from legal registration, content licensing is also an inseparable part of video streaming services creation.
In the USA, there are two main distributors of video content:
The major solutions work with these licensing companies. Before creating a streaming service, you need to understand that video content licensing requires huge investments. Such companies as Netflix invest billions of dollars in paying for content licensing. They spend no less on video production.
Some licensing companies can sell you a license not for the whole series but only for the first season or an episode. Thus, you need to negotiate the terms before signing any agreements or choosing a company to work with.
Step 4: Find an Experienced App Development Company
If you want to know how to create a video streaming service like Netflix that will have a chance for success, one of the most important parts is finding a company that will help with the development process.
The process of choosing a vendor goes through the following steps:
- Find app development companies on such platforms as Clutch, The Manifest, etc.
- Check the reviews of shortlisted companies
- Study the portfolios and previous experience to make sure it matches your goals
- Analyze capabilities and tech specialization
- Get in touch with recent clients and ask for reviews
The image below presents a step-by-step process of finding an app development company. Following this step-by-step process, you will be able to find a vendor that knows how to start a streaming service.
Step 5: Decide on the Functionality for You Live Streaming App
Video streaming solutions can have several user roles:
- Video consumer – end-user who watches the content on a streaming platform.
- Video creator – this user role will be suitable for such solutions as YouTube or TikTok.
- Content admin – this role applies to the administration of a streaming solution and should allow to moderate content, upload or delete videos, and perform other administrative roles.
Depending on the type of app you want to build, you might need to create an app for each of these user roles. The apps can have the following features:
- Onboarding – such pages in an app help users get a grip on the app’s functionality and understand which main features it provides.
- User registration – this is one of the basic and most important features of streaming services like Netflix. Registration via email or social media is the most convenient option for users.
- Social sign up and sign in – the ability to log in with the help of social media.
- User account – users can view their favorite videos, view history, add new ones to the list, update their user information, and control billing.
- Search – an advanced content search that will allow users to filter content by genres, recommendations, release date, etc. Its main goal is to make the search easy and fast for end-users.
- Reviews and ratings – the ability to rate content and leave video reviews.
- Push notifications – can be used to notify users about new content releases, updates, and billing details.
- Payment gateways – integration with Braintree, Stripe, PayPal, Apple, Google Pay, etc., to allow users to pay for content or subscription.
- Settings – basic settings should include controlling sound level, activation of subtitles, play and pause options, selection of video quality, and playback speed.
- Multi-language support – the ability to choose the language of video playback and turn on subtitles.
- Screenshot ban – prevention of making screenshots and video recordings of the screen.
- Geo-restriction – ban the use of the service from certain locations.
- Download feature – ability to download content to the local storage of devices.
- Admin panel – provides the ability for app admins to moderate content and users and perform other back-office operations.
- Analytics – features for admins that help analyze how users interact with the application, which features they use, and what content they prefer.
- Video quality selection – ability to choose the preferred quality of video content to watch.
The number of features you decide to implement directly influences the complexity of mobile app development and development cost. Thus, it might be reasonable to include only the most important and basic features in the first version of your application.
Step 6: Create UX/UI Design
If you wonder how to start a streaming service that users will love, there is no better way to gain their love than with a user-friendly interface.
When you create a streaming service, don’t try to copy the visual representation of Netflix or any other service. The best decision that you can make for the future of your startup is to create a unique style that will make your app different from the competitive applications.
Step 7: Technologies to Create a Streaming Service
If you want to know how to start a streaming service like Netflix, you must understand which technologies are required to create such an application. Even though users don’t see this part of the app, building a streaming service with the right technologies is required for its proper functionality.
Below you can see an example of a tech stack that can be used to create a video streaming service.
|Programming languages||Kotlin, Java||Swift, Objective-C|
|Toolkit||Android Studio, Android Developer Tools||Apple Xcode|
|SDK||Android SDK||iOS SDK, Cocoa Touch|
|Streaming protocols||RTMP, Adobe HTTP Dynamic Streaming, Apple HTTP Live Streaming, M2TS, MPEG-DASH, Microsoft Smooth Streaming, WebRTC, RTSP/RTP|
|Media formats||MKV, MP4, AVCHD, AVI, DMW, MOV, FLV, WMV, SWF|
|Codecs||H.264/AVC, FFmpeg, XviD|
|Media containers||MP4, FLV|
Step 8: Marketing and Promotion
Knowing how to start a streaming service is not enough. Without a comprehensive marketing strategy, no one will know about your application. That’s why marketing and promotion should become integral parts of your strategy.
A compensative marketing campaign includes the following activities and stages:
- Paid ads – will help to tell about your streaming application and get the first users.
- SMM – the best way to connect with potential users and create a relationship with current customers
- Influencer marketing – working with bloggers and influencers will allow you to connect with multi-million audiences.
- SEO – search engine optimization tactics will help you promote your landing pages to show them in the first positions in search engines.
- Events – you can promote your application at live events like conferences, meetings, etc.
Partnerships – you can cooperate with other startups and companies to promote your video streaming application at their events, among partners, etc.
Step 9: Gather Feedback & Plan for Improvements
After the first version of your app is released, gather feedback from the first users. This feedback will help you plan for further versions of your application.
Surveys, user interviews, and analytics data allow identifying points for improvement and advantages. This data should be used when you make plans for the features you will release in the future.
The below image represents a step-by-step process to create a streaming service
How Much Does It Cost to Start a Streaming Service?
After you decide how to start a streaming service, it’ll be easier to calculate app development costs.
When you create a streaming service, it takes a lot of time and financial resources. The more features you add, the higher will be the cost. The development process can also involve the creation of different apps for end-users and admins. Thus, the cost will grow even more.
An average video streaming app cost is estimated at ~$30,000 (for a single iOS or Android app). The development process usually takes 5-7 months for a single application.
Note: Please be aware that the above cost covers the development only of a single application with a basic set of features. The development time and cost can grow significantly depending on the number of features that need to be implemented. App development price doesn’t cover content creation and licensing costs.
How to Start a Streaming Service: Afterword
Now you have an idea about how to start a streaming service.
As you can see, the development of such an app is a complex process with multiple steps. If you decide to create a streaming service, your project will go through the development process, building business relationships with content licensing companies or content creators, marketing and promotion, and planning for future growth.
A streaming service is an on-demand online entertainment service for TV shows, movies, and other video content. Those services were created as an alternative for cable TV and have gained popularity over the last few years.
Creation of a video streaming service is a process that consists of the following steps:
- Finding a niche and USP
- Creating a business plan
- Legal registration and content licensing
- Choosing an app development company
- Deciding on the app’s functionality and tech stack
- UX/UI designing
- Marketing and promotion
- Planning for further app growth
Video streaming services offer a lot of opportunities for financial growth. Today, the market value is estimated at $50 billion. It’s predicted to multiply and reach over 184 billion in revenue by 2027.