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How to Start a Streaming Service: Step-by-Step Guide for Ambitious App Ideas

24 min read

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.

How to Start a Streaming Service

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 secrets and useful 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 to create a streaming service in 2021

Why It’s Worth to Create a Streaming Service

The success of Netflix, HBO, and Hulu is extremely inspiring. Looking at the results of their work, many businesses start thinking about how to create 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 take a look at some statistics. If you have any doubts regarding why to create such a solution, 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)
  • In 2019, Netflix’s total annual revenue reached over $20,15 billion. Netflix reported revenue of over $10,05 billion in North America. (Statista, 2020)
  • The net income of Netflix in 2019 reached over $1.86 billion. (Statista, 2020)
  • The average revenue per user is expected to amount to $58.52
chart created with amCharts | amCharts

 

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 193 mil $9+/mth $3.1 bil
Hulu 36.6 mil $5.99+/mth $683 mil
Disney+ 74 mil $6.99+/mth $35 bil
Apple TV 40 mil $4.99/mth N/A
Twitch 140 mil $4.99+/mth $35 mil
HBONow 57 mil $14.99+/mth N/A
Amazon Prime Video 150+ mil $8.99+/mth N/A
Crackle 10+ mil mth users Free N/A
Sling TV 9.3 mil $30/mth $63.4 mil

There is no doubt that the market promises huge growth in the near future. Therefore, businesses are asking how to start a streaming service that users will love. As you read the following chapter, you will find out everything about the process.

Step-by-Step Guide on How to Start a Streaming Service Like Netflix

How do you create a streaming app?

The creation of a streaming service doesn’t end with development. The process comprises of 9 main steps and a number of sub-steps:

  1. Finding a niche and USP
  2. Creating a business plan
  3. Content licensing
  4. Finding a reliable app development vendor
  5. Deciding on the video streaming app’s functionality
  6. UX/UI design creation
  7. Choosing technologies
  8. Marketing and promotion
  9. 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 the creation of 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 a good idea to copy an already popular solution like Netflix. Big names have a huge 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 your solution will 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.)
  • etc.

Before you identify which product type you are going to release, you need to have a good understanding of:

  • 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 that cover 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.

 

  1. 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 huge 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.

Did you know that even free apps can become successful businesses?

Check the article created by our team to learn about the best monetization strategies for free apps and discover how much you can make with a free app:

How do Free Apps Make Money? [Best Strategies for 2021]

  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 tough task to accomplish. Thus, you need to start work

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 you create a streaming service, you need to understand that video content licensing requires great investments. Such companies as Netflix invest billions of dollars to pay 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 you sign any agreements or choose 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 consist of 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.

Find a Development Company to Create a Live Streaming App

If you need a more detailed guide on app development outsourcing, check the article prepared by our team. You will learn the main reasons why companies outsource app development, the benefits, and how to avoid costly pitfalls:

How do Free Apps Make Money? [Best Strategies for 2021]

Step 5: Decide on the Functionality for You Live Streaming App

Video streaming solutions can have a number of 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 administrations 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 are going to build, you might need to create an app for each of these user roles. The apps can have the following features:

How to Start an Online Video Streaming Services: Features
  • Onboarding – such pages in an app help users to get a grip on the app’s functionality and understand which main features it provides.
  • User registration – this is one of the basic and the 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 reviews of videos.
  • Push notifications – can be used to notify users about new content releases, updates, and billing details.
  • Payment gateways – integration with Braintree, Stripe, PayPal, Apple, and Google Pay, etc. to allow users to pay for content or subscription.
  • Settings – basic settings should include the control of 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’s admins to moderate content and users, and to perform other back-office operations.
  • Analytics – features for admins that help to 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.

Do you want to know all the factors that influence mobile app development costs?

Check the article disclosing cost drivers of mobile app development and explaining how to minimize financial resources while building apps: 

How Much Does It Cost to Build an App? (2021 Cost Calculation)

Step 6: Create UX/UI Design

If you are wondering 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 need to understand which technologies go into the creation of 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.

  Android iOS
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
Cloud services AWS

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 on 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 for the promotion of 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 first users. This feedback will help you plan for further versions of your application.

Surveys, user interviews, and analytics data allows identifying points for improvement and advantages. This data should be used when you make plans for the features that you are going to release in the future.

The below image represents a step-by-step process to create a streaming service.

How to Start Your Own Streaming Service: Step-by-Step Process

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.

The approximate cost of developing an app like Netflix is around $10,000 to $65,000 per platform (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 creation of such an app is a complex process with a number of steps that should be followed. If you decide to create a streaming service, you will be tasked with overseeing the development process, building business relationships with content licensing companies or content creators, marketing and promotion, and planning for future growth.

 

Interested in video streaming app development?

Get in touch with Addevice – a team with over 6 years of experience in mobile app development. Our experts have experience in building solutions with multi-million user bases. Get in touch with us for a free project quote.

Frequently Asked Questions

✔ What is a streaming service ❓

A streaming service is an on-demand online entertainment service for TV shows, movies, and other video content. Such services were created as an alternative for cable TV and have gained popularity over the last few years.

✔ How to start a streaming service like Netflix ❓

Creation of a video streaming service is a process that consists of a number of steps:

  • Finding 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
✔ Why it's worth investing in streaming service development ❓

Video streaming services 📹 offer a lot of opportunities for financial growth. Today, the market of such solutions is estimated at $50 billion. It’s predicted to grow at a rapid pace and reach over 184 billion in revenue by 2027.

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