How to start a streaming service

Today people have more free time than ever and want to be entertained. Research made by UNECE shows that adults across different countries worldwide have, on average, from 4 to 6 hours of free time daily. 

How to start a streaming service like Netflix or Hulu that keeps people happy and generates profit to you? In this article, experts from our MVP development company will guide you step-by-step through the process.  

What exactly is a video streaming service?

A video streaming service is a platform that allows people with different interests to find something to watch in their library. It can include videos, movies, gaming streams, TV episodes, or TV channels in real-time. People with different tastes can enjoy the same platform with rich and varied content. 

Applications that allow you to browse through interesting material can be accessed from any device be it a smartphone, laptop, or desktop. Modern video streaming services try to provide a versatile experience to its users enabling different device modes.

A brief look at world-famous video streaming services.

First of all, let us look at the leaders of the video streaming market. Hopefully, their stats will inspire you.

Netflix

Netflix started as a humble DVD rental shop but grew into one of the world’s most influential companies due to them going online. First, it was a website where anyone could rent a DVD that would be delivered right to their doors. With a unique movie recommendation system, they boosted the number of active accounts. In 2007, video streaming as we know it first appeared. Since this transition, their annual revenue has grown from 1 billion to more than 20 billion in 2019. The number of Netflix subscribers has followed, growing to nearly 150 million in 2019. 

Amazon Prime

Amazon is a company that doesn’t need an introduction. In 2006, they introduced Prime Video, a streaming service available only for Amazon Prime members. One can choose from thousands of old and new movies, TV episodes, or TV channels having a subscription. It has more than 150+ Million Amazon Prime Video users, demonstrating a healthy competition to Netflix. Amazon Prime generates about $2 billion annually and continues to grow. 

Hulu

Hulu is another popular video streaming service by News Corporation and NBCUniversalMedia. It combines on-demand movies, TV shows, and live TV in one offer. It is television but cheaper and more personalized. The project was launched in 2007, and in 2020 they have more than 25 million subscribers and 54 million unique viewers just in the USA. 

As you can see, video streaming is a profitable market. There are many strong players there – apart from Netflix, Prime Video, and Hulu that we’ve mentioned, there are also Disney Plus, Youtube, HBO, and more.  How to start a streaming service?Every service has a hook that helps them to attract an audience — be it exclusive content or being children-friendly.

Create a video streaming service from scratch

Here is how to start a streaming service. A well-versed vendor can help you with each of the stages.

Conduct market research

The first thing you need to do is to research the local market. Many countries have to use Netflix because there is no video streaming in their native language. Also, in some places, like China and Syria, Netflix is unavailable. You can offer your users a platform where they can watch content in their language. 

Another case is when people already have a streaming service, but it is slow, and the interface is unsexy. Suppose you improve that – you are very likely to attract a broad audience to your product. 

Decide on the type of the content

Let us see the types of content that you can display in your app. There are different kinds of video streaming apps:

• Web live broadcasting from TV broadcasters. The demand for traditional TV provider services is declining. Nowadays, everyone has a smartphone, possibly a tablet, but most young people do not have a TV in their homes. Therefore, it makes sense to allow watching television from smart devices. Sling TV and Hulu are among the most famous apps that work by this model. 
• Time-shifted TV: Users can pause and restart TV content whenever they want. This is a slightly more flexible model of streaming TV content.
• Video on demand (VOD). In VOD, users can browse through catalogs of movies, TV shows, cartoons, and other video content with a search system. Modern video streaming services often provide a video recommender engine that automatically matches the user with content based on their interest. Netflix has become so successful thanks to their recommendation system.

Decide on the app’s functionality

Have an understanding of how to start a streaming service? Chosen the type of content? It’s time to get in touch with a developers’ team and start discussing the app’s functionality. 

Cloud storage

Cloud storage allows us to create a video on demand applications. A cloud storage network is a set of servers distributed worldwide that collectively store big data. Third-parties usually provide them. 

To host data from 50 TV channels and hundreds of on-demand videos, Hulu uses cloud architecture from AWS. Cloud solutions are less likely to fail under high peak load activity and provide easier scaling (you can seamlessly connect more servers regardless of their physical location). 

Recommender systems

Recommendation systems that help users discover more interesting content to watch is a must because all your competitors have them. How to start a streaming service using recommender systems?

There are four types of recommender systems:

• Content-based. Such a system can analyze what people watch and compose a list of criteria (genres, tags, words). A simple example of a content-based recommendation system is when we advise videos based on user likes.
• Collaborative filtering. These are systems in which recommendations are based on the ratings of other users. 
• Knowledge-based. These systems use some knowledge that was already gained somehow; most often, this data was collected and sorted manually.
• Hybrid. This type of recommender system combines several approaches. Modern recommendation systems usually combine more than one way of providing valuable recommendations.

Several payment systems

If you create a local video streaming service, then you have to add the payment systems that are more common where you live. For example, Stripe that is common in the USA, is not supported in some countries (for instance, Russia). The same goes for Bitcoin and other cryptocurrencies. If your app is international, you can add more ways of payment that are popular worldwide. 

What you should do is allow users to pay by card. You can also allow your users to subscribe via AppStore or Google Play, enable Apple Pay and Android Pay. Remember that your reputation depends on how trustworthy your transactions are. If you use third-party services such as Stripe and Braintree, SSL certificate and HTTPS that are necessary for additional security are already integrated in the services.

How are you going to make money?

Monetization strategy describes how you will make money. Here are popular ways to drive profit:

Subscription

The subscription can be monthly or yearly. After the user has paid, they access the content based on their plan. Users subscribe to streaming services because this way, they get quality videos and avoid ads. You can extra motivate them to subscribe:

• Free trial. If you work by subscription, the users cannot get your app’s touch before they pay. This feels like a black box since the user doesn’t know what they are paying for. According to marketing research, it is much easier to convert a person into a client after letting them get the hold of a product before paying. Offering a free trial may increase sales.
• Premium. You can motivate people to switch from free to subscription by providing extra bonuses. For example, you can differentiate the videos’ quality: 360 for open access and 4K for premium users.

Ads

You can also make money from placing advertisements. Companies will pay you for displaying their services and products if you manage to collect a large and active audience. In that case, access to all the materials is public, but users have to watch an ad. Youtube sticks to this type of monetization. 

What about user experience?

Now you are entitled to contemplate meaningful gimmicks that will make your app even more attractive for potential users:

• Casting to big screens. Many people switch to a video streaming service because they want to watch quality content on a big screen. Enable the opportunity to display content on a smart TV or home movie theater.
• Subtitles. If you have content in foreign languages, enable subtitles. Many people watch movies in a foreign language to learn and will love this option. 
• Autocomplete and autocorrect. Automate formatting when filling in forms or searching for movies is a convenient option that improves user experience.
• User Feedback. The users want to get feedback about their actions. For example, if they conduct a payment, reassure them with green check marks and other positive icons that they are doing everything right. Otherwise, inform them in a clear and friendly manner what they are doing wrong.

How much does it cost to create a streaming service?

The larger the project is, and the more team members work on it, the more it will cost. Luckily, at Purrweb, we know how to start a streaming service saving time and money to our clients. We apply React Native to the development of native-like video streaming mobile apps like Netflix quickly for both iOS and Android. We also develop web apps for any operating system.

Leave your email in the form below to get an estimation of the project:

Every project is different and the final price can only be named after we agree on the future app’s functionality, team size, and project size.

Conclusion

The video streaming market grows fast so it is a profitable place to begin your startup in 2021. During quarantine, the demand on new entertainment services has increased. If you have been thinking how to start a streaming service, start now. We will be happy to help.