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Long gone are the days when we all had to huddle around a big box. Netflix has now become the biggest online TV shows/movies online binging zone. Currently, everyone is thanking online streaming platform such as Netflix. People can survive this Covid pandemic at home— binge-watching.
Although, do you know how it all started?
Netflix started as a DVD-by-mail delivery company and reached on to become the biggest streaming platform in the world. Well, there are certainly many reasons for its success.
|Company Name||Netflix Inc.|
|Founder(s)||Reed Hastings, Marc Randolph|
|HeadQuarter( HQ)||Los Gatos, USA|
They kept making rapid technological changes to match pace with the fast-moving world. Simultaneously, they also kept changing the business model to remain in the race. Yet, their aim is the same since its inception. Netflix even now provides ‘entertainment from sitting at homes. But the company grew exponentially because of its foresight. They improvised and delivered movies and shows online.
In the Year 1997, the company made a humble start by providing physical copies of TV shows, movie shows, and other forms of media like video games, etc. After that, the revenue kept surging with the rise in households owning DVD players.
The biggest change in their business model was to turn its pay-for-use model into the subscription model. Through means of this same business model, they are still gaining huge profits.
Here are 3 reasons why:
Netflix releases some exclusive in-house movies and shows. They are available only on the app itself. People always get this as an extra choice as well as a reason to buy a Netflix subscription.
Advertisements always ticked us. That is one thing that TV shows have in abundance and we don’t like it. This is where Netflix played smart. They show no ads on buying a basic subscription plan.
Streaming content over your smartphones wasn’t easy. Neither that popular, until Netflix decided to create an ‘All of Netflix in your pocket’ deal. People with less money to spare on entertainment were also able to watch Netflix’s collection of movies and shows.
Netflix has very acutely researched the masses. With almost 100 million+ subscribers and an estimated worth of over 125 billion dollars, it is ruling the streaming world.
Their secret lies in extensive market research. Netflix has very keenly researched the masses. Thereafter, they designed a business model canvas to lure them.
The following 5 features set the Netflix OTT platform apart from its competitors.
Firstly, they made sure to include as many varieties of shows as possible. The show range had fictional shows, non-fictional shows, and documentaries. And they were all collected from around the world. A massive variety of genres, types of shows are made and uploaded on Netflix frequently. Thus, attracting subscribers to make their accounts on Netflix.
Secondly, they made their original shows and released them worldwide. The best part is that it is easy to watch for even the laziest of people.
The learning curve is as linear as possible. The User Interface(UI), has contrasting colors. In addition to that, the home page contains a recommendation section where specific genres that subscribers select, are present. Hence, It is friendly and almost flawless.
They have particular midnight, Pacific time at which they bring new updates and releases. You can even check the new releases lined with the dates till the next month. This way, the viewers will never lose interest. In fact, they have an ocean of options to choose from!
Netflix has an easy-to-use UI. The consumers of this video streaming app find it easy to navigate through. The color set used in their branding is also visually attractive.
Amazon Prime is the next biggest competitor in line. (And there are more OTT apps in competition to Netflix). However, Netflix has easily beaten it. Very tiny details could also beat your competitors at it. Netflix has a responsive search. It has a set algorithm that offers you a collection of similar shows and movies that you’re looking for. On the other hand, on Amazon Prime, you have to get an extra click to find the same results.
Storage space management is indeed a thought-sparing process. These all applications on any Android device, IOS or Windows eat up a lot of space. Next thing we know— our phones and laptops are hanging.
Accordingly, Netflix took out a smart solution for it. They delete the TV shows, movies, series, etc from the list as soon as you finish the whole video. In the same way, they also download the next episode in line, in advance.
Considering the popularity of Netflix amongst youth and every demographic of people, it can be concluded that Netflix rolls out huge profits.
Looking at the income in the first quarter of 2021, they earn an estimated 7.16 billion US dollars!. Though they captured the market world over, their biggest revenue comes from the USA, Canada, and Scandinavia.
To sum up their revenue structure, here is a list of the cost they bear to create and maintain the platform:
Netflix has a vast number of resources. Together, they have formed this humongous entertainment mogul.
Netflix has made sure to create shows, movies, and other forms of entertainment while keeping in mind all kinds of subscribers.
Offering different types of shows and movies to cater to the needs of kids, youngsters, middle-aged and even old-age people.
With so many viewers in mind, they often create and release Netflix’s original movies and shows that are family-friendly.
The software development team with Netflix keeps doing constant changes, bringing out-of-the-box ideas.
Constant innovations with the UI, overall user experience, and simple applications make Netflix shine. A great software development company and the team can bring out the best of any idea or app.
Nowadays, with so many services available. Anyone with a unique idea can make their on-demand applications.
Subscribers and all users of Netflix can select different channels to select genres of their choice for movies and shows.
What are those channels?
Only a few but with many subscribers to all these channels:
Three different market prices for monthly subscriptions in the US market:
Initially, Netflix was a DVD-by-mail delivery service. Up until then, Netflix had an approximate income of around $997 million per year. Thereafter, their income surged dramatically.
Let’s look at how and what strategies favored Netflix and benefited the company:
Building an entertainment empire would require some important partnerships. Netflix has at least 35+ different partners across so many different media houses. Netflix showcases several different types of genres for its subscribers. All this, to enrich their Netflix experience and built a trusting subscriber base. To name a few, here are some companies:
Image Source: Statistica
Looking at the last year’s collection, region wise:
There are so many online platforms such as Netflix in the market. However, some of them are more famous than others:
It is undoubtedly the second-largest online streaming platform after Netflix. Amazon has as many as around 150 million subscribers and could easily beat Netflix and bet the first position. The number of original and quality content produced by Amazon has increased substantially. This means tough competition.
Hulu got a great kickstart when Disney and Comcast signed a deal. Disney bought stakes worth $5.8 billion of Hulu from the Comcast Corporation. In the same year that the deal was made(2019), Hulu managed to get 30.4 million subscribers.
Disney has a rich library consisting of sets of movies of Pixar, Marvel, features of Start Wars creations, and some NatGeo program options. Not only this, but Disney also has the right to broadcast all the seasons of a very popular American adult cartoon show— The Simpsons, and the 21st Century folx films.
Together, all these companies give fierce competition from Netflix. Though, the ever-rising need and frenzy around online streaming platform such as Netflix and Disney+ are not stopping any soon.
Netflix has risen further after the pandemic. If you too are dreaming of creating your own online streaming application. Now you know the strategies that Netflix devised!
The best way is to prepare a framework for your app. And then outsource it from a good app development company. There are myriad steps that go into the development of such a mobile app. Here is a detailed step-by-step guide to video streaming app development.
The right strategy to create an online streaming platform such as NetflixIf you want to know the basic steps that go into the creation of such apps, here is a brief outline:
1: Finding the niche
On-demand streaming services are a popular niche. But online streaming can also have a separate platform with some content that is still not available on the already existing platforms. What could they be? They could be anything ranging from a collection of your favorite 90s cartoon shows or live streaming of all sports tournaments.
An online streaming platform such as Netflix, that can also be operated offline on IOS, Android, and Windows. What a deal, right? Choosing the right app development company is a must. Because they can be trusted with your idea and bring out the best in it. We at Idea Usher believe not only in building strong web applications for you but also in winning the trust of everyone we work with.
Different online streaming apps have different monetizing strategies. Some of them we have discussed above. But there are many more which are still used by other online streaming apps:
Content Distribution has a huge profit margin. All creators of the content would mind if you don’t buy it from them. So, getting the content either:
Buying exclusive streaming rights is also a big thing. If some content is only available on your platform, people will buy it.
Listening and replying actively to viewer’s feedback gives you a chance to reiterate your strategy. This way, you can find what areas can be improved.
Their business model is the same from the beginning. Only, the options have increased with the advance in technology. Netflix is the perfect epitome of ‘uberization’. They delivered your movies and shows in 1997 via DVD-by-mail option. Now, they are delivering the same set of content. Except only, the medium has changed.
Creating an ecosystem
Viewing the progress of Netflix from outside will only show the four walls built around the entertainment giant. However, scrutinizing the inside built will portray the true picture. Their focus lay not only on single-handed monetization.
The profit of stakeholders and alliances also created an ecosystem of growth. They brought so many individuals and organizations into the picture. Inclusion of technology stacks, producers, social media influencers, actors, writers, etc. They planned to bring together the masters of all the fields, and win a bigger game.
Netflix, with its new generation-based shows and strong branding, has become one of the greatest symbols of current generation trends.
Like Television, it has become the necessity of every working-class person.
Competitors of Netflix are also on the rise. Therefore, it is pivotal to keep an eye on the shifting market trends and audience interest.
The other trick up their sleeves was to find benefits even in issues. For instance, some movies and shows belonging to other production houses were only licensed for a fixed period. After which, their broadcasting rights can be bought by other online streaming platform such as Netflix, and also say, Amazon Prime, Hulu, etc. To put a curb on this rising competition, Netflix started producing its shows and movies.
Another intelligent move that Netflix made was to promote an ‘ad free binge experience’. But, why cut out on that profit that every other firm is leveraging? Because this ad-free idea became the USP( Unique Selling Proposition) for the company. And to top it all, they also give a free trial month to the delight of every movie lover on this planet.
Still, swiftly, Netflix does enjoy commercial advertisement earnings. Remember how two characters from the series ‘Stranger Things’ worked in a shop of ‘Baskin Robbins’? Well, they ad a cross-promo deal with the brand.
While the brand was given an important placement in the show. Consequently, Baskin Robbins created some unique ice-cream flavors based on the Stranger Things theme.
It was the same as hitting two targets with one arrow. Not only did it helped the company in promoting its show. They also spread a positive environment with the production people. Creators were not forced to show unnecessary product placements in their shows. This provided creative freedom to the writers and directors of the shows.FAQs
1. How Netflix’s recommendation system works?
Surprisingly, they have great algorithms which work on minute details like:
Netflix launches a number of movies, shows, documentaries, and also anime. They keep finding the latest trends and include them in their list. If you look at the latest June releases, they have so many shows in life.
All shows are from different genres, cinema including Korean dramas, anime, horror, thriller, romance, etc. Some of the latest releases in the list could be names as American Outlaws, Black Hole, Sweet Tooth, etc.
Firstly, the Covid pandemic had hit the whole world hard. People are working from home and trying to find sources of joy and entertainment. Netflix is an American brand. Naturally, several Americans have bought its subscription. A study conducted on American audiences suggests that on average, Americans were streaming 8 hours a day during the lockdown.
Nothing is impossible if we have the will to do it. And, fortunately, you have landed on the right doorstep! Idea Usher has a plethora of highly qualified team of software developers, UI/UX designers, and high-tech development experience. To know more about how to make an online streaming platform such as Netflix, contact us here.
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