Netflix is, by far, the most popular streaming platform available in the market. With over 192.95 million paid subscribers from all over the world, it is definitely leading the market of OTT apps. So it makes sense when questions like how to make an app like Netflix pops into an entrepreneur’s mind, like yours.
In this article, I will be talking about different aspects of how to make a streaming app like Netflix. I have covered both the business & technical sides of creating a streaming app like Netflix. The topics covered in this article are:
- How Netflix Makes Money – Revenue Model
- The USPs of Netflix
- Tech Stack of A Streaming App Like Netflix
- How Much Does It Cost To Make A Streaming App Like Netflix?
How Netflix Makes Money – Revenue Model
The first thing that comes to the mind of any entrepreneur when creating an app like Netflix its revenue model. How will your streaming app like Netflix make money? To answer this question, let’s look at the revenue model of Netflix and how it has changed over the years.
Netflix was initially launched in 1997. So it is obvious that over time it had to modify its business model according to evolution in tech and market demand. In its initial years, Blockbuster – a provider of home movie and video game rental services was the biggest competitor of Netflix.
This is how Netflix looked like in its beginning years.
So, the revenue model of Netflix, even in its beginning years, was a subscription-based model. Over the year, Netflix has aced predicting its market which has made it a successful $195 billion dollars company within just 23 years.
From just a per-DVD subscription-based model, Netflix evolved its revenue model to a monthly subscription – from $15.95 per month with late fees to $19.95 per month without late fees.
The current revenue model of Netflix is also a subscription-based model. The three streaming plans Netflix offers are – Basic ($8.99/ month), Standard ($12.99/ month), and Premium ($15.99/ month). Note that the premium plan that Netflix currently offers is almost the same as its initial monthly subscription plan, back in 2000.
Keep in mind that the cost of these subscription plans changes for different countries and demographics.
The idea of showing the revenue model of Netflix and how it has evolved through the years was to tell you that the understanding of your target audience plays a key role in defining the revenue model when creating a streaming app like Netflix.
Currently, the app has built a huge user base by spending on quality content to operate profitably just on its subscription-based model. According to analysts, Netflix will spend over $17 billion on its content in 2020. Besides this, there are multiple other things that Netflix spends on – marketing, server costs, production, etc.
Having said that, you cannot spend a huge amount of money on content when creating an app like Netflix, at least not initially. You can solve this problem by combining two or more business revenue models when creating an app like Netflix – such as the Freemium + Ad-based model, Or Subscription-based model combined with any other revenue model.
The USPs of A Streaming App Like Netflix
The second most important thing when creating an app like Netflix is to decide its Unique Selling Points (USPs). The current streaming app market, like most of the markets, is highly competitive. So, what would be the USPs to focus on when creating an app like Netflix?
Most of the competitors of Netflix are apps owned by big enterprises. A few alternatives of Netflix are Amazon Prime Video – owned by Amazon, Hulu – owned by Walt Disney Direct-to-Consumer & International, and HBO Max – owner by HBO.
So, when creating an app like Netflix, the USPs of your app must be well-defined to stand out in a highly-competitive market. Some of the Unique Selling Points (USP) that make Netflix one of the most used streaming apps in 2020, and that you can adopt from when creating an app like Netflix, are:
Ads are high-paying but, to be frank, are annoying to your users. We all have experienced this with YouTube. Netflix operates successfully without showing any ads to its users because, well, it has a different revenue model altogether.
You can use this when creating an app like Netflix too. When making a streaming app like Netflix, you can start with the Freemium Model with ads for a limited amount of content. This will ensure that you get paid for streaming on your app while incentivizing & thus, increasing your paid subscribers.
Ease of Usage
The UI/UX of Netflix is simple and yet, looks & feels quite elegant. Even if a user has just installed Netflix and even has never used a streaming app before, they can quickly learn how to use it.
This is another learning that you should take into account when planning to create a streaming app like Netflix. Invest in UI/UX design of your streaming app. It definitely pays off!
Netflix is available on all platforms – iOS, Windows, Android, and web. It is accessible across all platforms.
So, when creating a streaming app like Netflix don’t just limit your content to just your app. Make sure that it is available across all platforms.
When planning to create an app like Netflix, its recommendation algorithm is something worth spending your money over.
The recommendation algorithm of Netflix is super-strong. If you finish watching a series or a movie, it starts playing another movie/series that you might like, right away. Besides, if you search for a movie or series that isn’t currently available on that platform, the app recommends similar movies/series. This is something you should include when creating an app like Netflix.
The recommendation algorithm is an important area to invest in when creating an app like Netflix. It plays a crucial role in defining & increasing the average session time per user. For instance, Cindy Holland (VP, Content Acquisition / Original Series at Netflix) said in a 2019 interview that Netflix subscribers spend 2 hours per day watching content on the app!
Unique & Quality Content
Netflix understands the importance of quality content and how to keep users hooked. It spends a fortune on quality content. As mentioned earlier, Netflix will spend over $17 billion on content for its platform.
When planning to create an app like Netflix, it is important to build a well-defined strategy on the type of content you want to stream through your platform. The better the content, the higher will be the growth rate of paid subscribers.
Development Architecture & Tech Stack of A Streaming App Like Netflix
Now that we have covered most of the business aspects of making a streaming app like Netflix, let’s look at its technical side. People love talking about Netflix shows and web series. But what most don’t realize is how strong its tech stack is.
According to a survey, users view 140 million hours of content on Netflix per day. This comes to around 15% of global bandwidth. Imagine doing this for high-quality video/audio, without delay, and at fast loading speed. Well, Netflix is doing that.
If you are planning to create an app like Netflix, you have to pay extra attention to its technical specifications. A low-performing tech stack for your streaming app like Netflix can undermine your app’s reputation and seriously damage its user base.
In this section about the technical aspect of creating an app like Netflix, I’ll list down the technologies, frameworks, business tools, and DevOps that Netflix uses.
Netflix to Cloud – The Use Of Microservices
At the beginning of it all, Netflix had a monolithic tech architecture. In simple terms, the functionality of the entire streaming app depended on a single (large) codebase with multiple different modules.
A Monolithic Tech Architecture has a single deployment binary. This basically means that to do even a minor change, you have to keep in mind on how it will impact other aspects of the mobile/web app and modify other aspects as well to run successfully.
Netflix started the cloud migration of its entire platform from 2008 which finally completed in 2016. Most people didn’t even think that moving completely to the cloud was even possible but Netflix did it. This journey also brought another transition in Netflix – moving from Monolithic Architecture to Microservice architecture.
Currently, Netflix runs on 1000+ microservices – each of which controls the functionality of different parts of its platform. It is now impossible that the entire Netflix platform stops functioning at once!
When planning to create an app like Netflix, you can take such cues and implement what Netflix has implemented to make its platform completely seamless.
Today, most big companies you know have moved to the cloud and the use of microservice architecture has played a significant role in it. Well, remember that Netflix started it!
Cloud Services like AWS will play a significant role when creating a streaming app like Netflix.
For Application & Data – Tech Stack of Netflix
Netflix offers seamless streaming and a great UI/UX to its millions of subscribers because it uses the right development frameworks and technologies. And you should too when creating an app like Netflix!
You need a similarly strong tech stack in your streaming app like Netflix because it’s 2020 and the attention span of users is significantly low. Even a sec delay in the loading time of the web & mobile app will account for poor UX and can put off thousands of users!
Here are a few major technologies you will need when creating a streaming app like Netflix for its application & data.
- Python – Flask
- MySQL & PostgreSQL
- Amazon EC3 – Cloud Hosting
- Amazon RDS and Amazon DynamoDB (Database)
- Pig – For analysis of large data sets
- winjs by Microsoft – UI Toolkit for browsers
DevOps – Tech Stack of Netflix
DevOps plays a significant role in aligning development and IT operations when creating an app like Netflix. To ensure constant communication and delivery of changes at a fast pace, Netflix uses the following for DevOps.
- Git & GitHub – Version Control & Collaboration
- Jenkins – Continuous Integration Server
- Sumo Logic & Apache Mesos – Cloud Log Management & Server Management
- Crittercism – Mobile App Performance Management (APM) for iOS, Android, HTML5, and Windows Phone 8
- AWS CloudTrail – For Recording AWS API Calls & Delivering Log Files
These are just a few DevOps tools used by Netflix. You can choose your own DevOps tech stack when creating an app like Netflix as per your organization development culture & methodologies.
Business Tools – Tech Stack of Netflix
When making a streaming app like Netflix, you need business tools for better management and organization. Here are a few business tools that Netflix uses that you can adapt from when creating an app like Netflix.
- G-Suite – Team Communication & Collaboration
- Ping Identity – Identity Management Platform
- Confluence – Team Communication & Collaboration
- HubCommander – Identity Management Platform
Business Tools allows your team to communicate, manage, & collaborate for efficient & productive development, maintenance, or upgrade when creating an app like Netflix.
Besides using these tech stacks, Netflix is known for tech innovations for streamlining content delivery and thus, improving user experience. For instance, Netflix announced, back in 2018, the usage of Dynamic optimizer – AI-powered perceptual video encoding optimization framework which reduces memory usage without sacrificing on video/audio quality.
How Much Does It Cost To Make A Streaming App Like Netflix?
When making a streaming app like Netflix, it is important to create elaborate documentation of key features you want in your app. The cost of developing an app like Netflix depends on the features & integration you want in your app.
Here are a few features a typical streaming app like Netflix has.
- Access Control – Using OTP, Email ID, Social Media
- Basic Features – Content Search, Newsfeed/Activity Feed (Continue Watching, My List, etc.), Settings, etc.
- External Features – OTP Reading, Secure data Travel, Third-Party APIs
- Payment Gateway Integrations
- App Interaction – Deep Linking, Social Sharing, etc.
- Advanced features – Data Sync, Geolocation, Push Notifications
- Interaction with Cloud
- Admin Panel for User Control, User Analytics, etc.
Now the development & integration of each of these features come with a cost. An expert mobile app development company can give a rough estimate if you approach them with your app features. The MVP development of making a streaming app like Netflix will cost you around $70,000 (including 2 native apps for iOS & Android and server cost).
Final Words: Creating Your Own Netflix
A streaming app is more than just a mobile app. You are offering a streaming experience to your users in a competitive market. Every aspect of creating an app like Netflix – from market research to development, testing, & launch must be on point!
Now that you have a basic outline of how to create an app like Netflix, what are you waiting for?
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