How to Start a Subscription Video on-Demand Service like Netflix?

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Beyond any doubt, viewers of today have access to varieties of entertainment programs like TV shows, movies, and original series to entertain themselves. Moreover, everyone has connected TV in their living room so it is not necessary to browse channels for hours to find programs to watch. 

Today subscription video on demand services like Netflix are drawing TV audiences from all over the world, causing more and more people to cut cords. But what is the secret to this kind of popularity of on demand services? On demand access to thousands of TV shows and movies and affordable service packages can satisfy any user taste. Leveraging this growing popularity, many businesses are entering into the streaming industry to create subscription video on demand service

What if you could make a full-time career from creating the content you love and streaming your videos to the audience you care about. By learning how to create an on demand video service like Netflix, you can build a community and generate revenue. This blog is a comprehensive guide that will take you through everything you need to create your own subscription video on demand service like Netflix. But before going to all of that, let’s see how does streaming work?

How does Netflix streaming work?

Netflix is the largest video on demand service that allows its subscribers to watch a wide range of classic TV shows, movies, and entertainment of your choice on almost all Internet-connected devices. By paying a monthly fee, subscribers get access to unlimited video content. Netflix functions on many gadgets like smart TV, game console, PC, mobile, tablet, Mac, and more. Users can download the app and use it until the subscription ends. Netflix constantly adds new content and offers a lot of features that’s wider than it might seem at first glance. 

  • Netflix offers a wide variety of videos.
  • Can offer new movies and TV shows based on user preferences.
  • The app makes it possible to create 5 different profiles in a single account. 

Multiple accessibility allows all members of the family to enjoy their personalized Netflix experience built based on user preferences. While that was just about the basic functionality of Netflix, to ensure quick and prompt media devices, the streaming giant has a lot of things happening behind the scenes. One such aspect is the content delivery network (CDN) of Netflix called OpenConnect to serve 100% of video traffic. 

A CDN is nothing but a global network of proxy servers and data centers that offers high accessibility and performance of its massive amount of data. The global traffic of Netflix is delivered via a direct connection between the CDN and the residential ISPs its subscribers use to access the Internet. This is what facilitates Netflix to handle millions of subscribers accessing the app at the same time in HD.

Global facts and stats about Netflix

Over the decades, Netflix has become a trend-setting force to be reckoned with in the entertainment space. From classic movies to original series like House of Cards is winning both award nominations and viewers’ hearts. 

In this section, let’s look into Netflix by numbers.

Netflix company statistics

Not many of us know that Netflix existed even before Facebook. Launched in August 1997, Netflix has over 167 million paid users in over 190 countries. In Jan 2018, Netflix had over 15,400 titles across its global library. In the same year, Netflix had racked up Emmy award nominations over the years. 

If you think you have watched enough originals on Netflix, think twice as you are going to be blown away with this stat- Netflix has over 65 original shows and is planning to have 700 originals in the coming years. 

Netflix user statistics

As Netflix increased in popularity, its subscriber base also significantly increased. Netflix has over 150 million users with over 57 million from the U.S alone. Statista points out that over 74% of VOD users on Netflix are in the age group of 18 years-29 years old and the rest are 30 years-64 years old. On an average, Netflix users spend over 1 billion hours watching movies every week. And this is one sign of Netflix replacing traditional TV networks. 

Netflix financial stats

According to Forbes, Netflix was one of the 10th largest internet companies in 2017 based on revenue. In 2017 Netflix had a revenue of over $11billion in the same year. In 2017, Netflix has spent over $6 billion to create 1000 hours of original content. The streaming giant is spending a lot on original TV shows to attract move users to its platform.

The Netflix business model- What makes them so successful?

When you consider the business model of on demand video streaming services, Netflix has one of the most popular subscribers in the world. Netflix has worked its way into the normal life of people across the globe and around their way into almost all languages. Simply put, they are pioneers of subscription video on demand. But what is that makes Netflix very successful and what does that mean for you as a new business planning to launch subscription services like Netflix

Subscription business model

Netflix has the simplest and very effective business model- The subscription business model. This type of business model is what allows Netflix to create a significant amount of revenue that’s scalable. Here is a quick look at how SVOD works. 

  • Viewers sign up on Netflix
  • Users get a 14 day or 1-month free trial
  • Users agree to pay a monthly fee
  • Users can unsubscribe the service any time they want. 

With this business model, Netflix can keep the cost to the user very low. Due to this, they can focus on business growth and not trying to convince users to renew their subscriptions. This strategy combined with the others we are going to discuss; Netflix manages to keep its churn rate to 9% every year

Ease of access

Another factor that contributes to the popularity of Netflix is its ease of access. Netflix is accessible to everyone, anywhere, and anytime. It is easy and convenient for users to access their favorite movies and TV shows on the device and location of their choice with an internet connection. Just switch on your device, open the Netflix app, and be ready to enjoy your favorite content. 

Originals 

This one of the deniable facts about Netflix- Originals is the most popular material on Netflix. As it grew bigger, Netflix started to produce its content so as not to risk being left behind in the increasingly competitive VOD space. This is its long term growth strategy to deliver its own shows.

Even though you will be able to buy the DVD of Netflix series through Amazon download, why would they when Netflix offers them for an affordable cost. For example, if you take a look at the following image, you will be able to see that the DVD costs more than Netflix’s highest monthly subscription and you could easily buy 1 month of Netflix subscription instead of buying the DVD for one original alone. 

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Originals are one of the major strategies that Netflix leverages to keep its subscribers hooked to their platform. Let’s say you are a hardcore fan of Stranger Things. You won’t cancel your Netflix subscription to enjoy access to new episodes of Stranger things when they are released. If you are seriously thinking about how to create an on demand video service, this one of the powerful tools you can integrate into your marketing strategy to keep your users coming back for more. 

Advertising-free

Netflix has kept itself away from a major problem that holds back many users- advertisements on the platform. Many streaming services rely on advertising revenue to power their businesses. 

This doesn’t mean that the advertising model is a bad one. YouTube run their business primarily on advertisement model and some of the independent content creators on YouTube still struggle with running ads on their videos. 

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Coming back to Netflix being advertising-free, it allows them to focus on producing content that aligns with the real data they collect from viewers, considering the preferences of users instead of just listening to the opinions of their advertising partners. Okay, that’s what makes subscription services like Netflix popular. Now let’s look into what it means for you as a new business looking to make an entry in the streaming industry. 

How to build your own Netflix-like website and sell videos online?

Now that you have understood how Netflix works and what powers it, let’s straightaway head into how to create an on demand video service like Netflix. Surprisingly, it is not very difficult to create a VOD business in Netflix style. However, you need to create a well-strategized business plan and put in place essential things before launching your business. Here are some of the important steps you need to follow to build your own VOD business and sell videos online. 

Choose your niche

This is the foremost step to create your own on demand video streaming service – choosing your niche. Your niche is nothing but the specialized areas around which you create videos for your users. You can choose to offer a wide range of shows from all categories like entertainment, comedy, horror, drama, thriller, documentary, etc. like Netflix or choose to build your services on a specific niche. 

For example, Club Pilates is an on demands service that creates videos to help people to learn Pilates. 

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Likewise, you can create a video on demand website like Netflix to stream videos on niches like Sports, Entertainment, Music, food, and sports. If you are creating a niche VOD service, increase the price you can charge to laser target the right audience. 

A tip of success would be to ensure that your niche idea is clearly defined and refined. When choosing your niche, look for the following to make the right decision. 

  • You have a potential target market
  • Your passion for this niche
  • Whether you have relevant experience in this niche or not
  • Will you be able to make enough money from this niche? 

Plan your content

If you are clear about the niche you are going to target, it becomes easy to plan your content. Plan what videos you are going to create to entertain or engage the users in your niche. 

Clearly defining the content, you are going to create will make the whole process easy. Get clear on what your users can expect when they subscribe to your video on demand subscription services

Here are some of the ideas to consider

  • Will your videos be a one-one episode or rolled out as a series?
  • Will it be short or long?
  • Are you planning to create your own shows or curate them from different places? Are you planning to release new videos on a daily, weekly, or monthly basis? 
  • Will you partner with others or are you planning to go solo?

Remember, there are no right or wrong answers to these questions. You have full control over what you create. Any mix of answers to the above has the potential to be a profitable subscription service like Netflix

Curating content for your video on demand subscription service is a complex task. It involves constant collaborations with content providers to acquire and maintain competitive content offers. If you are planning to launch your VOD business on a large scale, it might be difficult to get a license as these production houses might have already sold their rights. In that case, you can look out for small production houses that are looking for online distributions. 

Types of VOD business model

One of the biggest mistakes VOD businesses make today is they keep the most important part- choosing a business model until the end. They don’t start thinking about choosing a revenue model until they finish creating and acquiring content and end up adopting the same revenue strategy their competitors use. 

This is not the best approach as a revenue model is the most important part of launching a VOD business and it must be chosen before starting. A business model of a VOD business is the way it generates revenue and it greatly depends on the type of content you are putting in. Here are some of the widely adopted VOD business models and how to choose the right model to reach better business goals. 

Subscription video on demand (SVOD)

SVOD is the most common business model used by subscription services like Netflix today. Streaming giants like Netflix, Amazon prime, and Hulu follow this revenue model where users access a variety of video content available unlimited. The users pay for subscriptions they can browse and view the content of their choice anytime and anywhere. Subscriptions are generally auto-renewable and must have the flexibility to cancel the subscriptions any time

Advertising video on demand (AVOD) 

AVOD revenue model is generally free and businesses offer free video content accessible to all users and use advertising as a revenue generation method. Users view the content for free but with advertisements interrupting their viewing experience. AVOD works best if you are just starting out and want to establish a consistent user base. As you are offering content to your users for free, it can help users turn to your brand while making money from ads. YouTube is the perfect example of an advertisement model VOD business. 

Transactional video on demand (TVOD)

This is another VOD business model but works exactly opposite to SVOD. Users pay just for the content they watch. This is like a digital version or a DVD store where you can buy or rent specific shows and movies and pay just for that. While this is as popular as a subscription model but this works great if your target market prefers it. iTunes is the best example of a TVOD business model. 

Hybrid business model

When you grow your video on demand subscription service and your platform is getting popular day by day. You need a hybrid of different business models that can help you monetize your videos to satisfy the interests of different types of audiences. For example, you can consider choosing a hybrid of SVOD, TVOD, AVOD or a combination of any of these. 

There will be users who would like to pay for a monthly subscription and gain unlimited access to your content library and there will people who just want to pay for a particular piece of content they want to watch. You will have a set of audiences who wouldn’t mind watching advertising but would like to access your content for free. 

If you choose a hybrid business model you can serve your broad target market with the entertainment content, they wish to watch. 

Create a Netflix like VOD website

The ideal set up to create a subscription video on demand service is to create a VOD website like Netflix. To launch your VOD platform, you can either create it from scratch or use a white label solution to launch your website which we will be discussing in the upcoming section. 

Creating a Netflix like website using a white label solution is the best way to do it as it provides all the essential tools to create your website, upload your videos, sell your videos online and protect your content. 

Create your branded apps

Branded apps allow your customers to access your content easily on different devices. Users have to open the app and log in to access all the videos. While this step is optional it is highly recommended for all VOD businesses to follow this strategy. If you don’t have the app, you might be making it difficult for your customers who majorly use mobile devices to access your service. 

Find your audience

With your niche content and subscription on demand business strategy, the next step to run your business- Finding your audience. How your market your subscription video on demand services comes down to your target market. You need to choose the marketing strategies that focus on where the attention of your audience is to add upfront value. 

Here are some of the tips to get started

Leverage social media– Social networks like Facebook, Twitter and Instagram heavily focus on videos now. Therefore, you can effectively use trailers and teasers to reach a broad range of audiences consistently. 

Use YouTube- With millions of active users, YouTube can be a great source of the traffic to your VOD website. 

Build a mailing list– With all the modern strategies, email marketing is still the best way to connect with your potential customers. Allow your audience to join your newsletters so that you can send them notifications and alerts when new videos get released. 

Features of VOD sites like Netflix

If you want to create a subscription video on demand service, it is important to integrate all essential features of the VOD platform. While your project is unique with your requirements and goals, most VOD features are common to all VOD platforms. 

Let’s categorize the important features into mainly four- User functionality, features for users, features for creators, and for admin. 

Universal functionality

  • Design-UI/UX

Design and user experience is the most important aspect of subscription video on demand services. Choose responsive templates or customize your entire VOD platform to deliver an awesome video experience to your users.

  • Homepage

The home page is the place where you inform your audience of the benefits they will get, show them your features, segment your programs.

  • Onboarding

Onboarding benefits product use greatly. How do your viewers know your platform offers the best functionality? Reduce the learning curve of your audience so that they get familiar with every aspect of your subscription service like Netflix.

  • Registration and login

For your users to access your VOD platform, they need to register and sign in to your platform. Offer a few ways for your users to register and sign up to your platform including social login feature. 

  • User profile

After a homepage, another important aspect is a user profile which is basically a virtual dashboard that allows you to native through the platform and gain insights.

  • Settings

Allowing your users to control the level of privacy is a good strategy. Settings is where your users can toggle between privacy options for the users. 

For users

  • Powerful search

Once your video library grows, it becomes difficult for your users to find the content you wish to watch. You need a powerful search with advanced filters for searching for videos by location, topic, date, video length, genre, language, most-watched, etc.

  • Video library

Create an extensive video library for your viewers to treasure their best video experiences.

  • Video player

Video players help to deliver the best possible viewing experience to viewers. Make sure you integrate analytics and monetization to your video player.

  • Subscription and user engagement

Users must be able to subscribe to the channels they like. Allow them to interact with the content in different ways including subscribing to channels, like, dislike, and comment on videos, review the videos, share the link and embed videos on sites, share the screen. 

  • Payment integration

In this digital age, payment integrations are a significant addition when you create a subscription video on demand service. create a video on demand website like Netflix. Allow your users to make payment by their debit card, credit card or payment methods according to the monetization model your platform supports. 

For creators

  • Video upload and ingestion

This is one of the most important segments for video creators. They must be able to upload their videos on your on demand video streaming service platform. 

  • Video management

Managing a video library must be a simple process for content creators. They must be able to organize videos, search media, edit the info, create playlists, etc.

  • Analytics

Offer your content creators with a powerful analytics and reporting system to measure engagement and performance.

Admin

An admin dashboard will boost your subscription service like Netflix’s credibility. Admin role includes payment management, content moderation, advanced analytics and more.

Cost to build your VOD website

This is another important part of this blog- How much does it cost to create subscription video on demand service like Netflix. The overall cost of development depends on how you choose to create your website. 

As discussed in one of the previous sections, there are 2 different ways to create your Netflix like website. 

  • Develop it from scratch
  • Develop using a white label solution or a clone script. 

Developing from scratch

Creating your video on demand websites like Netflix from scratch is the most elaborate and expensive way of launching your VOD platform. And, the overall cost to develop your Netflix like website from scratch involves a lot of aspects including, back-end development, front end development, branded apps, etc. 

The total development cost depends on many factors, like the size of the development team, the features you require, your location, and much more. The overall cost can vary from $150,000 to $2000,000 depending on your unique project requirements. 

Developing using a Netflix clone script

Creating your video on demand subscription service with a white label solution or simply put a Netflix clone can be a good approach if done right. However, you need to be careful when choosing a clone script and it could be a pure waste of money and resources if it is not able to support your business requirements and goals. The best option is to get a fully customized Netflix clone script that can be adapted to the design and features that you want for your VOD platform. 

StreamView is one such powerful white label solution to launch your own subscription video on demand service. It is a clone script that facilitates you to get started with your own VOD platform that can be customized to suit your requirements whether it’s modifying the UI or adding unique features. 

Some of the best features of StreamView are Native Android/iOS app, wish list, profile settings, push notifications, social logins, multi-screen support, security, etc. Most important, you can customize StreamView to set a payment valet of your choice. If you are looking for a white label solution that leverages modern technology and offers 100% source, StreamView is all that you need. When it comes to the cost, there is just a one-time cost for everything including lifetime upgrades. The price ranges from $699-$199 which is very less when compared to the cost required to develop your Netflix like website from scratch. 

Conclusion

People live Netflix like VOD service whether it’s for weekend binging or some Netflix and chill The on demand video streaming platform has become an integral part of our modern entertainment space. 

Therefore, creating a video on demand websites like Netflix, do not try copying the success of Netflix or VOD platforms. Instead, build a VOD service that is unique to your niche and audience. Hope this blog gave you significant insights on how to create an on demand video service. If you have any tips to create a subscription VOD service like Netflix, do share it with us in the comment section below. 

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