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How to Create a Streaming Service Like Netflix

So, Do you remember those days when family members argue about what to watch next? Here, those days belong to the past. Well, With online movie streaming services, you can watch anytime, anything, from any device. Further, the global video streaming market is estimated to be worth over $125 billion by 2025. Also, if you want to join the party, this is the right time. 

Below, you’ll find Netflix’s success story and tips on how to start a streaming service. 

Let’s begin. 

Netflix Value Proposition

This Netflix value proposition includes four essential elements, such as: 

  • Accessibility: This company delivers video across different platforms, operating systems, and devices. So, By using this approach, Netflix maximizes its fan base. So, Subscribers watch their favorite video content via browsers, tablets, and other devices. 
  • Original content: The Netflix broadcast exclusive programs and third-party publisher’s shows. Aside From this, the service offers some in-house shows which are not available on other platforms. 
  • No ads: The Netflix shows ads only to free account users. However, we all know how irritating ads are when you are watching your favorite series. So, At the same time, premium subscription owners enjoy online streaming without ads. In that way, the service motivates users to buy a subscription. 
  • Recommendation Algorithm: The Netflix has thousands of T.V. shows available for streaming. This recommendation algorithm gathers relevant content and increases engagement with the platform. 

This recommendation algorithm analyzes user data from different sources. Netflix machine learns recommendations for ranking, ratings, searching similarity, and much more. Netflix works with groups of various tastes. Hence, each subscriber fits into many groups that affect recommendations. 

How does Netflix Make Money?

This essential Netflix revenue source is subscriptions. So, Users can choose from the following three subscription monthly plans: 

  • Basic Plan at $7.99 per month. So, With this Plan, users can watch movies and T.V. shows on laptops, T.V., phones, & tablets. This Plan does not include high-definition viewing, and users can only watch videos on one screen at a time.
  • Standard Plan at the cost of $10.99 per month. At this charge, users can watch H.D. videos on two simultaneous viewings.
  • Premium plan costs $13.99 per month. After paying this subscription fee, users can watch 4K videos on four screens simultaneously. 

Well, As for the target audience, Netflix has three main business segments:

  1. Domestic streaming. This platform revenues come from monthly fees paid by U.S. subscribers.
  2. International streaming. So, Monthly membership fees came from subscribers outside the United States.  
  3. Domestic DVD. Income generated by U.S. subscribers who pay DVD-by-mail monthly subscription fees. 

Here, let us look at how to start a business like Netflix and estimate the apps development cost. 

How to Create Your Streaming Service App

The remarkable development of a Netflix-style business is not as hard as it seems. So, To achieve this, you need to go through several steps as described below. 

Find your Niche

The greatest thing to do is to decide what content your app will stream to users. To provide you a clue on profitable steaming niches, we have gathered several ideas below. 

  • Entertainment. So, Netflix and HBO show us that entertainment streaming services are very profitable. Some audience is big enough to accommodate a new streaming provider. 
  • Fitness. Fitness is a different perspective niche for VOD services. People would like to pay for a subscription to have access to fitness-related videos anytime. Additionally, you can add various video categories, dance training, like yoga, or a healthy diet, to enhance a wider audience.  
  • Education. People are more likely to watch the “How to” videos rather than instructions & reading tutorials. Furthermore, you can choose from many sub-niches, cake making, like magic tricks, or even origami, to attract a specific audience. 
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Decide on the content availability.

Because the content is the basis of your on-demand streaming service, you need to determine what your content will be. 

  •     Would you utilize videos from other distributors? 
  •     Or, would you need to create your video content? 

Suppose you want to cooperate with video distributors. So, You need to get a license for public performance. There are 2 ways to deal with that:

  •     Renting a movie from the approved distributor with licenses
  •     Communicating the copyright holder 

Both opportunities are legit, and the choice depends on your business goals. Suppose you choose the first option, and you might contact one of two leading authorized distributors or movies & T.V. series in the USA: 

As for the second possibility, you need to get in touch with the studio, which is the rightful holder of certain content. 

Choose the monetization model:

For your advanced on-demand video service, you can choose between three methods of video monetization:

  • Pay-Per-View is the standard, straightforward pricing scheme, which means the user pays for each video to watch. You can utilize this model to develop a platform to broadcast concerts, conferences, trade shows, or sports events, like boxing and MMA.
  • Advertising: You can credit other companies for running video advertisements on your platform. However, this monetization strategy would only work if your venue will become famous among users. 
  • Subscription: Because you remember, Netflix uses this exact monetization strategy. Additionally, the subscription model is operated by a third of professional broadcasters. Well, Subscribers are charged a monthly fee to receive access to a content library. You can utilize this monetization technique if you will regularly release new content on your platform.  

Netflix Monetization Model

Read the video streaming app requirements For your video to perform well, you require to balance the following performance characteristics:

Internet Speed

Internet speed affects the platform’s ability to stream on-demand videos. Some minimum internet speed to stream standard definition movies is more than 2 Mb/s (megabits per second). But to broadcast H.D., 3D, or 4K, your Internet speed must be much higher. Now, let us check the Netflix example. 

Cloud hosting and computing architecture

As keeping video content, we recommend using cloud hosting platforms since cloud hosting has the following advantages:

  1. Cloud hosting platforms are flexible & increase the amount of space automatically. 
  2. The before-mentioned platforms allow quick access to video content 
  3. And, Cloud hosting platforms are cheaper than hard drives

It is An on-demand video platform that requires complex architecture. As your business grows, the complexity of your architecture will only increase. Consequently, it would be great if you thought about your platform scaling from the very beginning. In that way, you can avoid complex data migrations.  

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Furthermore, you can use cloud computing capabilities for many operations, including: 

  •     A\B testing
  •     Search engine
  •     Streaming service
  •     Caching architecture 
  •     Recommendation system

Freshly, we developed a cloud dataflow for the Nanopore DNA Sequencing app. We explained the data transfer speed issues by using data processing and subsequent storage of incoming data. To get out more, read CASE STUDY: REAL-TIME DIAGNOSTICS FROM NANOPORE DNA SEQUENCERS.

Network Connectivity

Also, if your online streaming platform doesn’t multiply, consider that it will scale up in the future. To complete this, you need to integrate a content delivery network into your service. This content delivery network (CDN) broadcasts videos to subscribers via a server network. So, CDN turns your streaming app into a scalable system to handle significant traffic.


It would be best if you viewed content protection from unauthorized access across customer devices. To assure that your video streaming service is secure, consider the following:

  • First, Network background provides 24/7 monitoring and content availability in the case of server failure.
  • Then, Token security prevents access to the videos of a 3rd-party source without your approval.
  • Next, Domain restriction locks content to a specific domain. Thanks to that feature, other users cannot see the embedded link in the source code and insert it into another platform or site.
  •  Now, Geographical restriction excludes specific locations due to licensing agreements.
  • Lastly, Watermarking provides an extra level of live stream security. So, you maintain the rights to your content.

Develop an on-demand streaming service MVP 

The latest part of our guide on starting an online video streaming business is the development stage. Throughout this stage, you must clarify functional and non-functional requirements, set timelines, think about the design, and so on. 

So, Pay extra attention to your proposed platform design since a seamless user experience is a key to Netflix’s success. This platform needs an intuitive user interface. Hence, users can easily navigate films and shows, create “lists,” search by genre, director, actor, and so on. 

Gather feedback 

Following the MVP launch, you need to gather user feedback from your platform. Initially, it would be best if you found out how they like the existing features. Next, you can ask them what features they would like to add to your on-demand video service. This step will assist you in understanding the experience of real users with your service. Here, You can gather user feedback in several ways:

  1.     Pools. 
  2.     Social media. 
  3.     Email survey.

Final Word

Ago 1997, Netflix has become one of the media industry’s leaders. Among the subscription-based model, the company continues scaling and investing in technological innovations. 

While developing a video streaming app, let the industry leaders, such as Netflix, be your successful example. In that way, you can adapt their business strategy for your video service. Suppose choosing a niche and technology stack for your online streaming app. Additionally, take into account specific industry-specific requirements, such as complex cloud architecture. So, Once you have a clear picture of your project, you can hire mobile app developers to bring your idea into reality.  

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