HOW MUCH DOES IT COST TO CREATE A STREAMING SERVICE LIKE NETFLIX, DISNEY+ OR TIKTOK APPS?
20 min
Dec 24 2020
Artem L How much does it cost to create a streaming service like Netflix, Disney+ or TikTok apps?
Artem LBusiness analyst
Alex K How much does it cost to create a streaming service like Netflix, Disney+ or TikTok apps?
Alex KTechnical writer

THE RELEVANCE OF CREATING A STREAMING SERVICE

Streaming applications have become the most in demand in 2020. These services increased the number of the audience with unique content. However, until 2020, many services were still unable to compete with cinemas and television in terms of sales. Not to mention the cases of piracy.
There was a surge in subscriptions to streaming services in 2018.
This was due to the fact that most companies have made the most convenient updates for mobile applications. Now it is even more convenient to watch movies and TV shows anywhere.
The next wave of subscriptions happened due to the COVID-19 pandemic. Video services have lost their competition. This made them in demand. When summer 2020 came, people didn't return to the theaters. Realizing all the convenience of watching movies and TV shows at home, many chose to stay on the services.
In addition, the signed subscription has become a motivation for people to continue using the services. After all, they received all the novelties of the cinema for almost one amount. At the same time, real cinemas are asked to pay for each movie.
The skyrocketing demand for streaming video will only grow, Digital TV Research predicts. By 2025, according to Digital TV Research, revenue from streaming services is expected to double. This could exceed $ 170 million in profit per year. All this data provides insight into the current niche in the application market.
The “Exceed Team”, being a development team, has collected all the necessary information and analytics related to the creation of a streaming service.

SUCCESSFUL EXAMPLES OF STREAMING SERVICE APPLICATIONS

To understand the capabilities of streaming service applications, you need to examine popular examples. Below we will take a look at the top video streaming services for 2020, with a different approach to video feed and monetization collection.
This overview will clearly demonstrate the difference between many types of streaming services.

1. Monthly subscription services

Market leader in streaming services. The service was able to achieve high results thanks to the unique content and the ability to connect to the account from many platforms and devices:
  1. Android
  2. iOS
  3. Web applications
  4. Apple TV
  5. Smart TV
  6. PS4
  7. Xbox
  8. TV set-top boxes
And many others. At the beginning of the transition to the Internet, Netflix's business model was based on communication with the audience. Communication with the audience allowed the resource to keep on the brink of collapse several times and eventually become the leaders in the streaming video market.
By providing a monthly subscription to the resource (for $ 9 \ $ 14 \ $ 18), the company gives the client the right to watch all the variety of video materials that are in the application. Over time, different subscriptions have appeared. They give the user various privileges:
  1. Create several from one account to use the subscription of family members.
  2. Payment for viewing the film before the rest.
And many other features of this service. Netflix became the most visited platform at the time of the 2020 pandemic (16 million new subscribers).
Serious competitor to Netflix. The online service was launched recently (May 27, 2020), but it is already popular. This is made possible thanks to unique content and a huge library of films and TV series. The last of the most striking projects of HBO Max is the animated series "Harley Queen". And in the HBO Max library, it is possible to find such TV series as Friends, Westworld and others.
The application can be used on the following platforms and devices:
  1. Amazon Fire
  2. Android / Android TV
  3. Apple TV
  4. iPhone, iPad, iPod touch
  5. PlayStation 4
  6. Samsung Smart TV
  7. Xbox One
The web app on HBO Max is only served in the United States. This prevents the resource from developing, but expansion in other countries is planned in the future. At the same time, Netflix has regional outlets where the service hosts not only original series, but also films from all over the world.
At the very beginning of the platform's appearance, the price was significantly higher than the existing competitors ($ 15 per month). Now, the price has dropped and is almost on par with Netflix ($ 13).
The emergence of this streaming service was expected. It was launched on November 12, 2019. Within a few months, the platform felt an influx of audience due to the COVID-19 pandemic.
  1. The Walt Disney Company
  2. Pixar
  3. Marvel Entertainment
  4. Marvel Studios
  5. Fox Kids
And many others. A distinctive feature of Disney + is the low price ($ 7 per month) and the ability to watch movies, cartoons and TV series in 4K format on their platform. The annual subscription to the service is $ 69.99.
The platform is supported on the following bases and devices:
  1. Amazon Fire TV and Fire
  2. iOS
  3. iPadOS
  4. Android / Android TV
  5. Apple TV
  6. Xbox
  7. PlayStation 4
  8. Sony Smart TV
  9. Samsung
  10. LG
Other. Each of the platforms provides very broad opportunities for consumers to use them in any format convenient for them. Returning to Disney +, they decided to go even further. Content that was created only for large screens was launched on the platform. In 2020, such a rental happened with the film "Mulan".
The problems that are known on the service are that a number of content does not fit modern devices in format (we are talking about old works of the company). Also, often in streaming service there are “problems” in the content line.
But in just one year of its existence, the streaming service Disney + has amassed 73.3 million subscribers. The corporation's recent announcement that the service expects the release of many new films and TV series in the Marvel Marvel universe, Star Wars and others only increases the attractiveness for customers.
This platform provides streaming service as a bonus for Prime subscribers. Free videos, movies, TV shows and books and food delivery are one piece of content that subscriptions can provide. If you sign up for a special subscription, then Amazon Prime Video provides access to HBO Max.
This service is supported on the following platforms and devices:
  1. Fire TV
  2. iPhone / iPad
  3. Chromecast
  4. Xbox
  5. PlayStation 4
  6. Smart TV
  7. Blu-ray players
  8. Apple TV
And many others. Amazon Prime is available to viewers for a monthly subscription for $ 12.99. However, a number of users say that it cannot be used on some devices, and also complain about the same “confusion” within the service.
But Amazon Prime is a serious competitor to all of the above sites because of the additional Amazon features:
  1. Books
  2. Food delivery,
  3. Music
  4. Library of films and TV series
And much more.
There are many more paid subscription services that differ slightly from the market leaders listed above. These services set the tone for all other streaming services and raise consumer expectations. However, this is not the only form of video streaming.

2. Services of free content (monetization from advertising)

We are talking about platforms such as TikTok, Instagram Stories, YouTube Premium and other sites that offer streaming content. To understand the specifics of these platforms, it is worth exploring them.
It is a streaming video application that is filled with content at the expense of users. TikTok works to show short videos one after another. Personalization provides a selection of the subject of videos to the user's taste, increasing the time of using the application.
Users themselves fill the social network with content. They also come up with more and more ways to make money within the service. From selling a popular account to donations, etc. The platform itself makes money through ads and paid subscriber opportunities, such as advertising for their profile.
At the moment, TikTok is set to launch a music streaming service for emerging markets. TikTok is supported on bases:
  1. iOS
  2. Android
  3. Web application (but with limited functionality, like Instagram)
As you can see, the possibilities of using this application on various devices are significantly less than those of services with a monthly subscription. But TikTok was originally created as a mobile platform that can fully work on phones and anywhere in the world.
TikTok integrates videos into a variety of social networks, allowing users to share their creations wherever they want.
TikTok is also subject to criticism. So, there is weak content moderation on the platform, which has already led to penalties for TikTok from different countries.
The latest high-profile scandal is connected with a video that was published by mafiosi from South America. This was the propaganda of a criminal lifestyle. This did not go unnoticed by TikTok, so there was a massive update in early December 2020 with improved content filtering.
Technically, the criticism of TikTok is that older phone models do not support its wide functionality and do not display many functions. Especially the application performance degrades on older versions of Android during massive updates. But with an active audience of 40 million people (2020), the platform remains one of the leading platforms in the world of streaming services.
The social network Instagram, positions itself as an application for posting photos. The Instagram Stories feature was introduced in 2016. It allowed users to add photos and videos of 10 seconds. (if the video is larger in format, then the application will split it). Unlike TikTok, this feature is not the main feature of the Instagram service.
Also, Stories disappears when 24 hours have passed after the moment of publication. It can only be viewed by the owner of the account in his archive. Re-publication is possible, but with a note that this Stories has already been published.
Anyone can watch the Stories of their friends or the "world feed". Instagram provides many forms of earnings within its platform, as for Stories, here earnings come from the following types of monetization:
  1. Commercials that are inserted between Stories.
  2. Promote the stories of the account that paid for it.
The platforms that support Instagram and the Instagram Stories feature are the same as for TikTok:
  1. iOS
  2. Android
  3. Web application (but with limited functionality)
In addition to Stories, Instagram has the function of publishing videos and dividing videos by subject, which are offered to the user in the “News Search” menu. With the help of personalization and automatic start of a new video, many users are willing to watch videos on Instagram.

3. Mixed services (advertising or subscription)

Everyone knows the most popular platform for watching and downloading videos of any length - YouTube. With the development of the platform, it became possible to watch films from large studios for a fee. YouTube Premium appeared In 2017.
What is YouTube Premium and why does the platform think it will be an argument to pay audiences?
YouTube Premium offers the issuer the following features:
  1. Lack of advertising;
  2. Background music playback (even when the user is outside the application or the phone screen is turned off);
  3. Offline mode (this allows you to save videos in the device's memory and watch them even without the Internet);
  4. Automatic subscription to YouTube Originals (a collection of TV series, films and live broadcasts from YouTube);
  5. Opens users to the use of YouTube Music Premium (listening to music, the ability to create playlists, download music, etc.).
These features cost $ 11.99 per month. YouTube Premium is available in many countries around the world. Its functionality is controversial. On the other hand, the platform for users who do not install YouTube Premium has increased the number of ads: 20 seconds, which cannot be missed and 10 seconds. which you can skip.
This action has increased the number of YouTube complaints from users around the world. But so far, the company makes changes only after criticism of their work from advertisers. Otherwise, YouTube Premium has become a popular choice in North America and Europe as it not only provides ad-free videos, but also access to a wide library of movies. Also, in these countries they take copyright law more seriously.
In general, with the appearance of YouTube Premium, this platform has become similar to subscription services, which is filled with content by users and various film companies from around the world.
These were the three main types of streaming services in existence. Perhaps their work will give you an idea for creating your own unique product.

HOW STREAMING SERVICE APPLICATIONS WORK

The examples given in the last paragraph of the article show that there are three principles of operation of streaming services:
The work algorithm is built depending on what kind of application you need.
If you are attracted by the Netflix option, then you need to build a personal application for the functioning of streaming videos. It should give you the safety of your films and give you a competitive edge.
If, however, you are attracted by the TikTok or Instagram Stories option, then you should understand:
  1. TikTok is a separate social network set up for publishing and creating videos. Its technical stack is completely tied to technologies related to cloud storage, video recording and effects for video processing;
  2. Instagram Stories is a plugin that serves the main application.
While each of these applications is different, they all share a common set of tools that allow them to work. Let's call these their basic functions:
All features are the standard set that 2020 consumers have come to expect from streaming services. At this stage, you need to decide what kind of streaming service is preferable for you.

STEPS TO CREATE A STREAMING SERVICE APPLICATION

To create a streaming service like Netflix, Disney + or TikTok, you need to follow a few steps.

Step 1. Strategy development

Any business is easier if you write down a phased plan.
Strategy development is the foundation that will help you understand what kind of product you want to see, what is its uniqueness and key points. To do this, you need to do the following:
If you choose the first option, then you should take a closer look at security policy. Also, this choice affects the development of tools for creating a video player, video editing system, etc.
If you choose the second option, then you will need to purchase licenses for films, TV series and cartoons. This way, you can legally show them to your audience without fear that your site will be classified as “pirated”.
When applying for a license, you will need to contact the film industry distributors. You need to contact those distributor companies where the film, TV series or cartoon you are interested in was created. We provide a list of distributors that work in several countries around the world:
Canada:
  1. Alliance Films
  2. Warner Bros
  3. Teletoon
  4. Astral Films
  5. Entertainment One
India:
  1. AA Films
  2. Fox Star Studios
  3. Ultra Media & Entertainment
  4. Yash Raj Films
  5. Zee Studios
United Kingdom:
  1. Aardman Animations
  2. 20th Century Fox Film Co.Ltd.
  3. Entertainment One
  4. Pathé
  5. Contender Entertainment Group
USA:
  1. Walt Disney Studios Motion Pictures
  2. STX Entertainment
  3. Warner bros
  4. Sony pictures
  5. 20th Century Fox
These are far from all the lists of distributor companies existing in these countries. You may have noticed that some companies are duplicated in different countries. This is due to the fact that large multinational film companies create regional content creation offices. So The Walt Disney Company is based and finances films in a number of European countries and even Russia.
When purchasing a license, you should be aware that there are different types of licenses. And before starting negotiations, you need to draw up the required package of documents. Then discuss all the details with the distributor company or directly with the film company. For example, you might want to show animated series on your platform. You may be given the rights to show all seasons of a given series at once, or they may only have one or even refuse.
In order for all these nuances to go right from a legal point of view, you must understand exactly how your service works and whether it violates the principles of the copyright law of a particular country (as well as world rules).
Also, this point of the strategy will help you at the stage of advertising your streaming service. It is best to do audience analysis and social media ad campaigns.
Top popular social networks for business advertising:
All of this top is aimed at helping you choose the most suitable social network for your ad placement. But the final decision in the marketing company for the application is up to you.
Many articles on the Internet recommend creating a website that will be similar to existing services. This makes sense, since the functionality and color scheme of an already familiar service will be familiar to the consumer and will inspire confidence.
However, if you want to develop your brand, copying will do nothing for you. Lots of trusted UI / UX designers are ready to take on your project. The problem is how to choose the right people. You can read about how to choose competent developers here.

Step 2. Monetization

In the first paragraphs of this article, you read about three types of streaming app monetization, categorized by content (subscription, ad, and mixed).
The streaming service functionality determines the type of earnings.
So, the Netflix application offers users a subscription and builds a pricing policy from this:
All this requires the provision of the following monetization algorithm:
If an application is created like TikTok, then its monetization algorithm looks like this:
The type of application will help you to determine the right monetization strategy that's right for you and your customers.

Step 3. Start Application Development - Technology Stack

The beginning of application development lies in the preparation of the project documentation. You could already write the first part by describing the details of the strategy that we reviewed above. Now, you need to describe the functionality of your applications.
In How Streaming Service Applications Work, you learned the basic features that make up any streaming service.
If you decide to focus on iOS and Android, then it is better to use Flutter.
If you are interested in one thing, then here are the most convenient options for developing applications like Tik Tok:
To speed up development, use the Wowza tool. It is a service software that is used to organize the playback of streaming audio and video.
These tools form the backbone of a streaming service to which you can add various plugins.
You will need the following programming languages:
To speed up development, you might find Kodi software (formerly XBMC) useful. Some tools are best used together to improve development efficiency.
Next, you need to secure your platform as well as to create high throughput. In order to understand which method of protection is best for you, decide on the video transmission protocols. The development team can advise you which of the many protocols is best for you.
If you are experiencing difficulties, then we advise you to contact the development team. How to find a reliable team that is capable of implementing your project, read here.

Step 4. Unique tools

Basic functions have already been discussed in the previous paragraphs of the article. But, there are also unique tools for the technical stack. They can provide a competitive edge.

Step 5. Development of the application

An experienced team of programmers should be entrusted with developing an application that satisfies all the features, ideas and preferences you choose. This will speed up the timeline for creating the application.
How to choose a decent development team and how to check their competence - we have revealed in this article.
Next, we describe the stages of your interaction with the development team, after drawing up the project documentation and signing a cooperation agreement.
This concludes the work of the web application development team. Next, you must implement an advertising campaign to attract an audience to the ready-made streaming service. How best to do this, we described in the paragraph "Step 1. Strategy development".

HOW MUCH DOES IT COST TO CREATE A STREAMING SERVICE?

There is no direct answer to this question. Each development team takes its own individual price. However, it is better to know how the pricing is structured. This will allow you to choose the most satisfying combination of price and quality.
If you look at the world map, then each of the continents is able to provide its top countries that are able to provide the highest quality application development services.
If you take a brief excursion, then the highest quality, but also expensive in terms of the cost of application development, are teams from North America - the USA and Canada. The fee can be over $ 100 per hour of work.
The countries of Eastern Europe are becoming more and more attractive every year for those wishing to create an application. Stand out in Eastern Europe for the ratio of low price and high quality, such countries as: Ukraine, Russia, Poland, Hungary, Belarus and others. For example, Ukraine on average charges $ 25-49 per hour, Russia $ 20-35 per hour, which is much more budgetary than the United States.
The countries of the Asian continent have a very strong leader in the production of software - China. The average hourly pay for those who want to contact Chinese developers is $ 24-35 per hour. India, on the other hand, has over 5 million developers providing their services for $ 18-25 per hour.
Also countries such as India, Philippines, Indonesia, etc. stand out in this market. In many of these countries, wages are even lower than in China or Eastern Europe. However, many note the problem of the quality of released applications.
Countries in South America and Africa are known to have variable quality levels (from very good to medium). Among these countries, there are market leaders in software development:
Prices for these countries range from $ 30-50 per hour (South America) and $ 40-50 per hour (Africa).
The development of such an application requires the creation of both a design and a service center that supports all the work of a streaming application. Also your streaming service needs to be supported. If support can be provided by a full-time team of programmers, then it is better to entrust the creation to professionals.

LET'S DISCUSS YOUR IDEA

This article is written by the “Exceed Team” so that anyone who wants to create their own application does not feel afraid of misunderstanding the structure of the application and can accurately formulate their idea.
If you want to know the exact cost of creating your streaming service - write to us. We will study your project and advise you on any questions that appear.
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