How to a start video on demand service like Netflix?

Gone are the days when broadcast TV was the most watched video platform worldwide. Advancement in technology has shifted the hype to the online world. According to Statista, 32% of TV households worldwide would be video on demand subscribers by 2022. With this penetration rate, VOD services would completely replace the TV broadcast eventually.

It is not me, but the stats, which give a strong evidence of this massive outreach. The current revenue, which amounts to US$15,589m in 2018, will show an annual growth rate of 2.3%, and acquire a market volume of US$17,086m by 2022.

There is no doubt that Netflix, in all this, has dominated the video on demand market with more than 7.5 million new customers in the first quarter of 2018. However, we should also not ignore, Hulu, which ended 2017 with 17 million subscribers. VOD is a huge market, and there are possibilities for every tryout.

Indeed, VOD is an opportunistic niche, and 2018 is a right time to start a video on demand service of your own. Before that, let us first understand how the giants like Netflix and Amazon Prime are making millions in this niche.

Netflix’s Business Model

In just one quarter, Netflix added half as many new subscribers Hulu has in total; roughly 66 million at the beginning of 2017 and now closer to 80–90 million in 2018. Netflix is currently worth more than $100 billion with a subscriber base of 118 million.

They have come this far by reaching out to the everyday lives of common people. Simply, Netflix is one of the early entrants in the market of subscription video on demand (SVOD) and they applied some good stuff in marketing and extension of their business.

1. Subscription business model with a free trial

With Netflix, it is simple. They follow the simplest subscription video on demand model for revenue generation. Moreover, they offer this free 30 days trial, providing a full try-out before committing to pay.

Here is how it functions:

Step1: Sign up for 30 days free trial

Step2: Enjoy the unlimited access to all Netflix contents without any Advertisement.

Step4: Continue to pay monthly charges as long as you avail the service.

Step5: Cancel anytime you wish to end your Netflix access.

2. Accessibility on multiple devices

The videos on Netflix are accessible to anyone (subscribers) at any time on any device. Be it a web browser, smartphone, tablet, or smart TV, they have apps and interfaces on every device one can think of. They also have over-the-top (OTT) apps to stream through normal televisions using a Roku, Amazon or Apple TV device.

3. Native content- Netflix Originals

In addition to the third-party publishers, Netflix also offers exclusive ‘Netflix Originals’, which you won’t find anywhere else. Award-winning shows, like Stranger Things and Master of None, are some of the great examples of great possessions they have; such exclusives encourage people to subscribe to their service.

4. No advertising

As Netflix follows the subscription model for revenue generation, they have kept themselves from showing Ads. Complete ad-free browsing makes the platform suitable for independent publishers. It is opposite to what we see on platforms like YouTube, where creators struggle to keep their content Ad-affinitive.

Why create a VOD service like Netflix?

It is not hard to tell that a similar platform would face a rigid time challenging Netflix in the market. However, it is not just the business model, but also the efficacy and deliverability of the platform that makes the platform so popular.

Therefore, if you have a competent business plan, backed by some competent tech, you can always compete with businesses of any scale. For example, Amazon Prime and Hulu have their own space in the market, and they are doing well. It is a colossal market out there; if your platform has the competency, people would not mind adding one more service to their list.

How to start a streaming service like Netflix?

Starting a video streaming service like Netflix would want to do some preparations and proceed one-step after another. It is not just the tech, but also many legal obligations that should be followed. So, let us start from the first step here:

Step 1: Choose your Niche

When Netflix started, there was hardly any competition in its niche. However, it is your turn now, and there is a huge competition out there: Netflix, Hulu, Amazon Prime, and many regional services too.

If you wish to get an attention in such a heavily crowded space, do what others are not doing; do something unique. That would be your niche. If you cannot find a niche, there is always an option to implement something like Netflix and Amazon prime originals.

In other words, before going to the next step, know your business plan and decide what you want to do with your Netflix like streaming platform.

Step 3: Acquire rights

Now that you know your niche, and have decided about the contents you are going to publish, it is a perfect time to get those contents aligned with your business plan. Approach the content owners and distributors and acquire the rights to publish their contents on your platform.

The agreements for acquiring the rights depend on various factors including advertising agreements, revenue-sharing ratios with content owners and other licensing clauses. It is always a good practice to have a lawyer by your side, who can understand and proceed according to the legal terms for licensing.

Step 4: Decide your revenue model

After acquiring the rights, mold your revenue model according to the legal terms of the content usage. Finishing with step 3 would give you a clear understanding of whether you should choose one or all of the following revenue models:

· Subscription Video on Demand:

Netflix, Amazon Prime, and Hulu follow this exact model. Also called as SVOD, businesses, which follow this model, earn through the fixed daily, weekly, monthly, or yearly subscription charges they take from the users in lieu of corresponding access to the services.

· Ad-Supported Video on Demand:

This model requires an onboarding of the advertisers to your platform. You have the option of keeping your core video streaming service free for users while earning from the Ad-publishers. However, think twice before choosing this road. FYI, except YouTube, none of the Ad-Supported Video on Demand services have made good impressions yet.

· Transactional Video on Demand:

Transactional Video on Demand (TVOD) works in a specific genre where users feel interested in paying only for specific videos they want to see. It can create a good impression by letting users not feel encumbered by a monthly subscription. However, if your content quality is stimulating, people would not mind paying subscription charges for it. A good example of TVOD based business would be ‘Google Play Movies’ and ‘YouTube’ for some of the contents.

Step 5: Get a Netflix clone script

Once you have the rights and decided your revenue model, next step would be to create a platform for hosting your stream. If it was a few years ago, this step could have cost you fortunes. However, in 2018, getting an exact platform like Netflix is piece of cake.

There are numerous affordable turnkey solutions, which can allow you to launch your video on demand service on the go. A similar turnkey solution would be a Netflix clone script.

Anyone who wishes to start a VOD service and earn through the subscriptions, a Netflix clone script is the best option for them. A good Netflix clone would support flexible customization's and answer to all your business requirements without spending millions.

Here is what to look for when searching one for yourself:

  • Multiple monetization channels like Subscription, Pay-Per-View, and Banner Ads.
  • Multiple Video uploads channels like Amazon S3 Bucket, direct upload or website link.
  • SEO friendly architecture
  • Payment gateways for secure transactions
  • Video resolution conversion for faster uploads
  • Auto video resolution converter for slower networks
  • Native Android app for mobile users.

Step 6: Go mobile

A few years back, this step could have been optional. However, in 2018, when a major proportion of video streaming audience is using mobile over computers, it is not wise to ignore the need for a mobile app.

Most of the Netflix clones come with mobile apps in the same package. It would be easier if you can get in terms with one such provider. Keep looking, and assign your project to someone who can provide the same for both the Android and iOS platform.

Step 7: Start marketing

With your niche, license, website, and mobile apps ready, the only step left to take is — get subscribers.

This step is more of a business-planning obligation and requires the efficacy of your marketing team. However, we can come up with some suggestions which would definitely help is finding an audience for your newly launched video on demand service.

· Go social: Utilize every aspect of the social media marketing and get people to know about your platform. Promote your offers and USPs on different social media channels like Facebook, Twitter, and Instagram. You can also utilize the paid Ad services on each of these platforms.

· Leverage Ads: Depending on your marketing budget, traditional Ads can give a head start. Ads on TV and Newspapers would help in spreading your words quicker.

· Email marketing: Email is still the most affordable way to reach your potential customers. Build an email list of your prospects, and then, alert them when your videos go live.

Hopefully, this article could clarify all your doubts about starting a video on demand services like Netflix, Amazon Prime, or Hulu. Being a market of huge potential, VOD businesses have a lot to offer. We would love to hear your thoughts about the same. Do not forget to drop your expert comments and enlighten us about this particular niche of online business.


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