How To Start a Streaming Service Like Netflix and How Much It Costs?

Today, building a streaming platform has enormous potential due to the outstanding popularity of video streaming and services like Netflix. According to a study by Statista, online videos recorded an audience reach of almost 92 percent among Internet users worldwide. Additionaly, DemandSage, data reporting and analytics solutions provider, discloses some interesting statistics which shows that:

• About 47% of Americans prefer Netflix to other services
• Netflix has 232.5 million subscribers in early 2023
• Netflix users spend 3.2 hours each day on average consuming content
• Netflix's revenue for 2022 was $31.61 billion

Netflix is an SVOD service (subscription video on demand). It is the largest video-on-demand service with an enormous database of cartoons and films. Having paid a monthly fee, clients get access to unlimited content. Netflix can function on many gadgets and run on various operating systems like Smart TV, iOS, Android, Windows, Mac OS, etc.

Users can download and use this app for free during the first month. Then automated subscriptions and purchases are integrated into the app. For example, if you are subscribed via iTunes, payment is made via your iTunes account.

Netflix is constantly adding new content. But its features are rather wider than it may seem at first glance:

• You can list the content in the already existing library or use an integrated search feature
• With the help of the CineMatch system, Netflix can offer you new TV shows and films according to your preferences
• The app makes it possible to create up to five separate profiles in a single account
• It offers a lot of streaming videos

Various profiles allow your friends or family members to have their own personalized Netflix experience that is built on the basis of their preferences. You can also add your search categories to your service. You should rate films viewed, then the app will sort out films you like more precisely.

Follow these steps to build your Netflix-like streaming service:

• Step 1. Follow the right strategy to start Netflix-like app building 
• Step 2. Prepare your business model 
• Step 3. Use tech stack to create streaming service like Netflix 
• Step 4. Add MVP features to build the skeleton of your service 
• Step 5. Consider all important requirements to keep up with 
• Step 6. Keep up with useful hints to make your service successful 

Now let's explore how to build a streaming service in more detail.

We will list the main steps you should undertake to start a business like Netflix.

Haste makes waste, so you don't need to build your own streaming service quickly. First, you should determine the type of your streaming specificity. Video streaming service on demand is a general concept; you should understand what niche in this area you choose. What types of movies or TV programs your website or mobile app will contain, you plan to build a streaming service for kids, and it will include cartoons and developing TV shows.

It is essential to make your choice. Of course, you can create your own streaming service like Netflix, that will cover all potential viewers, but a personal specificity of your service may become your punch line.

When you plan to find out how to create streaming service like Netflix, you should determine what your content will be. Because content is the foundation of video streaming services and it depends on content how attractive the service will be.

First, you should choose how often you will update your content - daily, monthly, or weekly. Will you add part of the TV series or everything at once, as Netflix does? Will your content be partially available for free, or will it be necessary for subscribers to pay to watch?

There are a few important issues with content you should pay attention to, keep it in mind. 

Of course, you need to follow all guidelines and rules, and we all should abide by law. That is why you need to get licenses for all types of content you plan to stream. How can you do it?

First of all, you have only two ways to get the license for public performance:

• You may rent the movie directly from a distributor that is authorized to grant such licenses;
• Or you may contact the copyright holder directly.

Both options are appropriate, everything depends on your opportunities and individual particularities each of this option has. If you plan to rent a a movie or TV series from an authorized distributor, there are two major distributors in the USA: Motion Picture Licensing Corporation (MPLC) and SWANK Motion Pictures.

If you chose a second option, you need to contact a studio that is a right holder of a specific content, and negotiate with them.

Note: Keep in mind that there are different types of licenses. For example, one studio will sell you right not for the whole TV series but only for one season. It can be even more convenient since if you see that this TV series is not popular on your website, you will remove it and won't extend licensing for the next season. Also, it is important to know that some movies or shows can be under exclusive distribution rights and you won't be able to purchase licensing anymore - it means only one service has exclusive right for streaming and public performance. Besides that, licensing may be restricted to specific regions, and you won't find a licenses for content distribution in your region. So consider all these challenges.

As for expenses, if you plan to start your own streaming service as Netflix, you will need to spend billions of dollars on content licensing. For example, the company typically spends less on content licensing and production than they earn, so everything is paid off. However, of course, you will need to start small and monitor the development of your business, and if everything goes well, you will be able to buy popular films and TV shows that are usually expensive.

Here you should make a decision on what design and general style your website or app will have. You have two ways to create a style of your service:

• Use a style similar to Netflix, find some ready-made templates and offer software development company to use them in your service;
• Create your own style from scratch with professional designers. UI/UX designers at software development company you cooperate with will build a unique style for your future streaming service.

As you understand, the second way is preferable. It is much better to have your own personal style than copy existing models. Netflix has it's own design, so you'd better keep up with this model as well. 

You will find information below regarding platforms you should choose to create your own video streaming service, but we will discuss it in more detail. If you plan to build a website like Netflix, you should also keep in mind to create a mobile app. We don't need to provide you with statistics, everybody knows that the majority of users spend more time using their mobile devices rather than PCs.

It means that a mobile version of your service will be preferable for such users. You may think a responsive or adaptive website version will be enough, but it is a big mistake. A native mobile app on iOS/Android gives users a more personalized and convenient experience.

And the next step in this strategy is to find your target audience. You can do it in a few ways:

• Social media. Popular social networks like Facebook, Twitter, Instagram, etc. Share videos of your service on these social media to promote your service and find the right target audience.
• Use YouTube. This service is a very powerful engine for brand promotion, so use YouTube to build a trustful attitude towards your product.
• Arrange newsletters. Send your potential customers a letter with a detailed description of your product, but mind making a letter presentable and attractive.

Thus, you will find your audience quickly. And then you can proceed to business model you should keep up with to understand how to create a movie website like Netflix. 

To start a streaming service, choose a professional software provider with expertise in developing media solutions. When selecting a technical partner, you should consider the company’s location and hourly rate, customer reviews on platforms such as Clutch and GoodFirms, and check the company’s portfolio with previously created media streaming solutions.

An experienced software vendor can help you not only build your own streaming service but can also provide Discovery Phase services, upgrade outdated software, etc.

The main part of your cooperation with an IT provider will be building a streaming platform upon your requirements. As a rule, developers work on software in several stages, designing and building each part of the application. Also, the process of creating a streaming service is accompanied by QA (quality assurance) and testing. After the development part, QA engineers perform some additional tests to ensure all the platform’s features work correctly.

Once you launch a TV streaming service, focus on gathering user feedback. Based on that, you can decide how to improve your platform further. Moreover, once you have gained a particular customer base, you can create a more feature-rich streaming platform that will allow you to increase your audience and grow your profits.

Launching a new business resembling the Netflix model does not guarantee immediate astonishing success. Of course, it will take time until you start earning money, at the very beginning, you will scale gradually. If you aim to become a competitor to Netflix and make your own streaming service like Netflix, you must be ready to spend at least a few years making your business profitable. If you want to know how to write a technology startup business plan, read our detailed article.

First, you need to create a Netflix-like service - unique content. Nobody wants to pay for content that is come-at-able. But you should obtain the license for content distribution and then begin to develop your new business.

Monetization of the video platform is performed based on the subscription model, so you can propose variable plans for your viewers. For example, you can charge a monthly, quarterly, or annual fee. But you shouldn't forget about free trial versions in Netflix-like apps for a month or more. You can either propose to subscribers all the video library or only its part. It allows you to control monetization.

That is you must anticipate the following: 

Furthermore, you should consider a multi-currency support and integration with several payment gateways to allow subscribers to pay with their local currency.

There are several ways how to make a movie streaming app profitable:

• Subscription Video On Demand (SVOD). You can ask users to purchase a subscription to access content for a month or a year.
• Transactional Video on Demand (TVOD). By implementing this model, you can offer users the ability to watch videos on the pay-per-view basis.
• Hybrid. You can combine SVOD and TVOD models to reach a wider audience.
• Memberships. This model is similar to SVOD but it gives you an opportunity to provide viewers with additional benefits.

We’ve done a small research to define what monetization models different streaming services use most of all. Here’s what we’ve learned:

To make a streaming service profitable and efficient, you should monitor metrics and maintain the efficiency of your platform. For example, among the KPIs for a Netflix-link service are:

• Subscriber growth. This metric allows you to analyze the increase for the selected period compared to a previous one of the same length, allowing you to conclude the popularity of your service.
• User retention rate. This indicator estimates the number of users using your application after installation.
• Viewer engagement. This metric allows you to estimate how engaged and interactive visitors are with your platform.
• Customer acquisition cost. This indicator is vital from an economic point of view and allows you to calculate the cost of customer acquisition.
• Customer Lifetime Value (CLV). This metric is the total income a business can expect from a customer over the entire relationship period.
• The average revenue per user. This metric is one of the critical indicators of success and allows you to estimate the average revenue per customer. The higher this indicator, the more successful your platform is.

Here you will find the list of the main tools that should be used for building a streaming platform. Underneath, we’ve listed an approximate list of technologies you and your team can use to start your own streaming business.

It’s not a secret that many companies use third-party services to speed up development and get a good-working MVP version. We’ve collected the most widely used third-party technologies to help you define how to create streaming service from a tech perspective.

Many third-parties are paid. It’s especially true for streaming gigabytes of data. That’s why we’ve also collected pricing of each of the services above:

As you can see, there is a large set of tools that can be used to start your own streaming service, and developers at Cleveroad have enough experience to deal with all featured tools. 

Netflix falls under the app category of databases that require a heavy backend for processing streaming data transfer. The total OTT application development cost for starting your own streaming service like Netflix depends on the number of features it will have. The more features it has, the more expensive it is. So for the beginning, it is better to add the main features only into the first app version, to reduce its cost. Additional features can be added later when the app and website become popular.

If you’re wondering how to start a streaming service and how much it may cost, we’ve prepared a short estimate of the MVP features needed for such streaming platforms. The prices below are approximate and only made to help you better understand the budget range.

The final price is calculated based on the $50/hour rate. This is an average software development rate in Central Europe.

Our expertise: Pay attention to the app like Netflix that we enhanced and improved this year. This is a video on demand platform, called Blockbuster, designed for video streaming targeted at Danish market. We haven't built it from scratch, but our team has fixed bugs and changed the app architecture. It took about 3 months for our specialists to improve the architecture and they added also one feature like movie downloading that took 140 hours for them totally.

There is no substantial difference between an mobile app development services considering iOS or Android. But it is better to choose only one OS to start for the minimum viable product. However, if you want to involve as many users as possible, you should consider the development of the app for both mobile OS versions. Besides that, you should also build an SVOD website since streaming services are often used in web versions as well.

Hard-to-use apps definitely alienate users, and people are unlikely to use such apps in further. Therefore, simple design is very important in other apps like Netflix. It will allow users to receive the necessary information in a blink of an eye.

Now let's discover the essentials features to build a streaming service.

User registration

The first feature that cannot be ignored is registration. Registration via email and social networks will make it very convenient for potential users.

Payment gateway

There is no need to integrate your own payment gateway into your app if you are going to use an operating system from Apple or Google. Android and iOS have their own mobile payment systems that allow making purchases in the App Store and Google Play just with one click of a button. The only thing users need to make payments is to register their accounts. Apple and Google offer special frameworks for using their APIs. All operations are performed in Google Play Store and Apple App Store. But it is worth considering that these companies charge 30% of all purchases total amount in an app.

If you are intended to create a streaming website as well, in this case, we advise you to use payment gateway for like Stripe or Braintree. Each payment service shall have PCI-DSS compliance. And such gateways providers as Braintree and Stripe PayPal also offer their native libraries for both Android and iOS. 

User profile

Here users can add their favorite movies or something like that. Also, it is possible to add more people to your account in order for they can watch their own content in a Netflix-like streaming service.

Content search

Selection of genres, selection by user reviews. You can check what your friends watch and what films they like.

Chat and comments

Give users the freedom to interact with each other and share impressions from watched movies and TV series. You can achieve this by implementing features like chats and allowing them to leave comments.

Push notifications

These notifications are an extremely useful feature to stay in touch with users. For example, you can notify them once a new TV series or show is released.

Settings

Selection of audio track, subtitles on/off, play/pause, rewind, volume control, etc. Settings will provide your subscribers with a better user experience and increase their satisfaction.

Multiple language support

The user base is the key to success for this kind of online service. The more languages the Netflix-like app will support, the more users you have.

Admin panel

It should be available obligatorily since you, as an admin, will have access to all content to manage videos and users, edit videos, block users if necessary, and so on.

We mentioned features of the minimum viable product, where all of them are an integral part of your future streaming service. Creating your own streaming platform like Netflix is impossible without the above features. But if you want to enrich your new app and website and add more exciting features, here are some to integrate into your new product.

Let's now take a look at possible features you may add to product after releasing MVP or even before the release.

• Social sign-in. Capability to share news and reviews via social media.
• Reviews and ratings. You can rate a television program or movie, forming your own rating based on your portal users' opinions.
• Live streaming video. Live broadcasting of specific TV programs, shows, sports events, etc.
• Content recommendation algorithm. Netflix has the CineMatch system that provides users with content that is more interesting for them. You can integrate something similar into other services like Netflix.
• Geo-blocking. Due to different restrictions in separate regions of the world, some of the available content in your app can be forbidden in these regions. So if you want your app to be available in as many countries as possible, you should consider this feature.
• Download feature. Users can save content on their tablets/smartphones/PC to watch it even when there is no Internet connection available.
• Video quality. According to the client's requirements and the technical features of his/her gadget, they can choose a quality rate.

You already know how to create a streaming platform with basic features and how much it costs. It’s time to show you estimates of streaming services like Netflix, Hangout, Instagram Stories, and TikTok with extended functionality. The final price is calculated based on the $50/hour rate. This is the average software development rate in Central Europe.

How to build a streaming platform like Netflix? You should know that your streaming service should keep with some important requirements that ensure the proper functionality of the service, and, respectively, it directly impacts users' engagement.

Stable storage. Today cloud hosting is fairly considered the most reliable storage for any type of content. All your videos should be stored on a good and well-tried hosting to provide users with seamless content delivery and a trustful experience.

Good network connectivity. Mind to apply Content Delivery Network (CDN) to create stable connectivity and prevent servers overloading, give users a shorter request time, and so on. If you need to know what CDN is better to choose, our specialists will give you a useful hint about what is preferable in your case.

High bandwidth. The combination of reliable video streaming protocol and CDN will ensure high bandwidth and a low probability of lagging. Adding video in 4K resolution should equip your service with a stable and high bandwidth.

Security. You should protect your service from any unwanted intrusions from third parties. Here are some safety precautions you can count on:

• Token security prevents access to unauthorized third-party sources
• Domain restriction blocks content for specific domains and avoids inserts into another platform
• Geo-restrictions allow you to block content for certain areas and protect copyright
• SSL encryption provides secure transmission of data between the server and users
• Watermarks help you protect your copyrights

Choose your video streaming protocols. There are many streaming protocols like WebRTC, HLS, and RTMP, and each has its benefits and drawbacks that should be considered. Developers can help you choose an acceptable video-streaming protocol in your specific case.

What actions should be undertaken to succeed when creating a streaming service like Netflix? We can help you with this issue since our experience is rather rich. Furthermore, we can advise you to become a prosperous owner of other movie apps like Netflix.

• Product determination. Proper estimation and planning during the development will surely lead you to success.
• User experience. Pay attention to the way your audience is immersing in your content, starting from menu structure to player design. Users want to log into the system and make online purchases as simply as it is possible. Also, they need a large list of content where they can add bookmarks of films to watch in the future.
• Personalization and big data. Development of various recommendation models on the basis of various analytical information, A/B testing.
• Planning of ad strategy. Capabilities of audience growth, income increase, advertising strategies.
• Security. Content security provision so as to avoid legal problems.
• Analytics. On the basis of data analysis and data collection, you can improve your rates, determine which features confuse users, what is necessary to modify to draw more customers or increase loyalty for existing customers.
• Quality of service (QoS). It can refer to many app components whether it be user experience, streaming speed, transfer, delivery or playback of the content. The ad is an important part of customer's experience, it shall be effective and it shouldn't alienate users.
• Multiplatforming. You must choose the platform you find the most applicable in your case. Furthermore, you should take into account that users are expecting to watch content on various gadgets, and many of them want to see the 4K resolution.

As you can see, it can take a lot of time and resources to make a website like Netflix or a mobile app. But the cost of the final product will depend only on how many features will be added to the app. Of course, if you make a decision to create such app, the cost may seriously vary, but we will show an approximate total development cost of the Netflix-like app. 

Important note! Please, take into account that all costs are rough and the final price of your streaming service may vary. Everything depends on your specific requirements. Moreover, to the indicated price we also include meetings and code documentation processing. 

Design should be both attractive and easy-to-use. It is a guarantee of success. So for the development of the TV app like Netflix development cost may be the following for MVP version:

If you’re wondering how to start a streaming service with extended functionality, you should be ready for greater expenses.

Thus, according to the information above, you can easily imagine how to start a video streaming business and how much it will cost. And it can become profitable if you are intended to follow the correct marketing strategy and ready to invest the required sum amount.

But for proper development of the app itself, you should trust the high-skilled development company that can implement your ideas accurately within your requirements and desires. So please get in touch with us anytime, we are always at your disposal!

We have extensive expertise in creating streaming applications for various businesses. Recently our portfolio was replenished with a project that digitalizes the popular movie rental service - Blockbuster.

Our customer is the TDC Group company, the largest Danish telecommunication service provider. In 2013, the enterprise acquired the rights for Blockbuster, an iconic US company known for video and game rentals, to launch a video streaming platform in the Nordics. The company wanted to transform the current business model and create a video-on-demand platform to deliver movies and TV series via the Internet on a paid basis. The client approached Cleveroad as an experienced media software development company to:

• Receive a comprehensive video-on-demand platform, localized for the Nordic region, that allows viewers to buy and rent video content within the TVOD (or pay-per-view) model.
• Replace the outdated Android and Android TV apps to recreate a core business process and satisfy end-users expectations about the new product solution.
• Get a responsive on-demand video platform ensuring consistency across devices and optimizing the media experience for everyone.

As a result, our client got a high-quality TVOD streaming platform that allowed the enterprise to digitize the traditional video rental business and offer on-demand video services online. The service has hundreds of thousands of subscribers in Denmark and is rapidly increasing a solid client base across Sweden, Finland, and Norway. Within six weeks, 10,000 people subscribed to the service.

Now let us introduce our company and tell you more about IT services we provide.

Cleveroad is a high-tier technical company specializing in developing various technical solutions for businesses of all industries. For more than ten years on the market, we have helped hundreds of companies find modern technologies and custom software to boost their performance.

By cooperating with us, you can get many benefits, such as :

• A team of specialists with extensive expertise in the media domain: media and entertainment software, Video-On-Demand, live streaming platforms, VR/AR-based apps, and more
• Practical expertise in implementing media streaming integrations, such as Vimeo, Agora, Twillio, and others, to offer a more comprehensive streaming experience to end-users
• Flexible cooperation with several models for you to choose from: staff augmentation, dedicated team, time & material, etc.
• In-depth analysis of your product’s requirements from our Senior Business Development managers and help in planning, implementation, and launch
• Experienced developers and QA specialists able to provide robust, quality, and fault-tolerant media streaming service

If you want to create your own streaming platform and you're not sure where to start, contact us! Our experts will advise you on media streaming service building and help you to develop a solution for distributing your media content at low latency to viewers worldwide.