The AtoZ Guide to OTT App Development Like Netflix

Gone are the days when the only source of entertainment was limited to TV sets, or if you wanted to watch the latest movie, you had to wait for it to be released on cassettes or DVDs. But things have completely changed now, and so have the user’s viewing habits. It is actually the era of OTT apps like Netflix, Amazon Prime, and Hulu. The uptrend in demand for online video streaming services has led to businesses' growing interest in investing in OTT app development like Netflix. 

Netflix continues to be the leader of on-demand video streaming service providers, not just in the US but worldwide. Although it is challenging to compete directly with such an industry giant, the video streaming market is massive, and new players can still thrive. Who knows, your OTT apps might be the next big hit in the industry. If you’re creating a Netflix alternative, you probably need answers to a few questions, such as, What makes Netflix so successful? How is it different from other streaming services? Most importantly, what is Netflix's business model?

Well, these questions need to be addressed before heading forward. So, to help you out with your growing curiosity and make things easier for you, here’s a detailed guide on How to build an application like Netflix. This is a complete roadmap that will introduce you to literally everything you need to get started in the video streaming industry. So, let’s get started! But first, we will look at the key statistics on Netflix and the OTT market. 

Key Statics Showing Market Dominance of Netflix and Other OTT Apps

• Netflix is the most subscribed OTT service, with over 260 million active subscribers around the world, followed by Amazon Prime with over 200 million subscribers. (Source: Uscreen)
• Both Netflix and Amazon Prime Video are the most popular subscription video-on-demand (SVOD) services in the US, each having a 22% market share. (Source: Statista)
• About 24.7% of the total UK population has a Netflix subscription. (Source: Uswitch)
• Netflix’s largest revenue share comes from the US and Canada, which account for about 44% of the total. (Source: Business of Apps)
• An average American spends about 21 hours per week watching OTT content. (Source: Uscreen)
• An average OTT user spends $50 monthly to stream their favorite content, majorly on Netflix. (Source: Cord cutting)
• SVOD remains the primary source of revenue for OTT services, expected to reach $127 million by 2029. (Source: Digital TV Research)

The statistics mentioned above, as well as the market overview of OTT services, are enough to make you believe how profitable this industry can be. So, let’s move forward to understand more about Netflix’s business model, monetization strategies, and other crucial information before grasping the crucial steps, i.e., the OTT app development process itself. 

Understanding Netflix’s Business Model

Netflix's business model isn't just about making money; it's also about connecting with its audience. This model is built on a scalable ecosystem that can grow over time. The platform operates on a subscription-based model. This approach, combined with its global reach, allows the company to expand quickly and steadily.

Netflix's value proposition includes four key elements:

• Accessibility: Netflix provides video content across various operating systems, platforms, and devices. This strategy helps the company reach a wide audience. Subscribers can stream their favorite video content on literally every device, including tablets, mobiles, desktops, and other devices.
• Original Content: Netflix offers exclusive shows and third-party content. Additionally, it produces in-house shows that aren't available on any other platform.
• No Ads: Ads are only shown to users with free accounts. Premium subscribers enjoy an ad-free experience, which encourages more users to opt for a subscription.
• Recommendation Algorithm: With thousands of TV shows available, Netflix uses a recommendation algorithm to suggest content based on user preferences, enhancing engagement with the platform.

How Does Netflix Make Money?

Netflix generates revenue primarily through a subscription model, where users subscribe to monthly or yearly plans to access a vast collection of movies, TV shows, and original content. These subscription plans come in different tiers, each offering various features and video quality options.

The platform uses this money to purchase streaming rights for films and to create Netflix's own original content. Additionally, Netflix earns significant income from content licensing deals, which allow it to stream content produced by other studios and license its original content to other platforms.

The company also makes money through partnerships, merchandise sales, and ad-supported plans. This business model depends on continuously growing its subscriber base and producing or acquiring engaging content to keep viewers interested.

Here’s a graph showing the annual revenue of Netflix year-by-year:

Apart from this, you can use the following monetization models for your OTT app: 

• Subscription Video on Demand (SVOD): Users subscribe to monthly or yearly plans to access the entire content library. This model provides uninterrupted streaming without ads.
• Advertisement-Supported Video on Demand (AVOD): Users can access the content for free, but ads are shown during playback. The primary revenue source remains the advertisements.
• Transactional Video on Demand (TVOD): In this model, users pay for the content they want to watch without subscribing to the entire plan. 
• Freemium: This model combines free and premium offerings. Users get basic content for free but need to pay a subscription or one-time fee for premium content or features.
• Hybrid Models: This approach blends two or more models. For instance, users might pay a subscription fee but still see ads unless they opt for a higher-priced, ad-free version.
• Affiliate Marketing & Partnerships: Streaming apps can earn commissions by partnering with other companies or platforms. This involves promoting products or services within the app to drive sales or sign-ups.
• Sponsored Content: Brands pay the streaming platform to feature their content, subtly promoting their products or services.
• In-App Purchases: In addition to accessing content, users can buy virtual items, additional features, or digital goods within the app.

So, now that you have understood the monetization model for your OTT app, let’s look at the essential features that will make it stand out from competitors. 

10 Core Features of an OTT App Like Netflix

Netflix's features and functionalities make it a big hit in the OTT industry. Understanding key features and purposes is essential for creating a successful OTT app and for providing a smooth and user-friendly experience.

User Interface

The user interface is the first point of contact between the app and its users. A well-designed, intuitive interface enhances the overall user experience and boosts engagement. A simple and quick sign up and login process is crucial. Allow your users to sign up via email or social media accounts can greatly improve their initial interaction with your app.

Search Bar

With a vast amount of content available, users need an efficient way to find what they're looking for. A good search bar is a must-have feature for any video streaming service. It helps users quickly and easily find their desired shows or movies, which is vital for increasing user engagement and satisfaction.

Video Quality Control

Since internet speeds can vary among users, having a video quality control feature is essential. This allows users to adjust the video quality based on their internet connection, ensuring a smooth and enjoyable viewing experience for everyone, regardless of their bandwidth.

Content Management

A good content management system is crucial for any streaming app. Users can easily find what they're looking for by organizing content into different categories and genres. Adding parental controls is also important, as it lets parents manage what their children can watch, providing them with peace of mind and enhancing the overall user experience.

Video Player Integration

A versatile and high-quality video player is essential for a streaming app. A good video player can handle different video formats, ensuring smooth and efficient playback. This feature is crucial for delivering users a reliable and high-quality streaming experience.

Personalization Features

Personalization is a crucial element in boosting user engagement. Allowing users to create profiles, save their preferences, share favorite content on social media, and receive push notifications can greatly enhance their experience. These features help users feel more connected and involved with the platform.

Content Recommendation Algorithm

Artificial intelligence (AI) has proven to be helpful in improving the user experience in streaming apps. By using AI to suggest content based on what users have previously watched, the app can offer a personalized and engaging experience, which helps keep users coming back.

Payment Gateway

With the growing importance of data privacy and security, integrating a payment gateway is a smart move. Offering various quick payment options can reduce the chances of users leaving the app or website without completing their purchase.

Social Feature

Sharing new discoveries on social media has become a common habit. By linking your platform with social media accounts, users can share what they're watching in real-time. This enhances their experience and also markets your app across different social media platforms.

Screen Mirroring or Screen Casting

Screen mirroring or casting allows users to display their phone or tablet screen on a TV while connected to the same Wi-Fi network. This feature lets users enjoy content on a larger screen, making the viewing experience more immersive.

Required Tech Stack for OTT App Development Like Netflix

Creating a high-quality streaming app, much like a skilled musician crafting a masterpiece, requires the right set of technologies and tools. Let's explore the various technologies that are essential for developing an app similar to Netflix.

How to Build an OTT App Like Netflix?

Now that you have understood a lot about Netflix, including its business model, monetization model, essential features, and required technology stack, it’s time to put this knowledge into practice. 

So, here’s a detailed OTT app development process to build an app like Netflix: 

Step 1: Identify Your Niche

Building an app that tries to appeal to everyone often ends up appealing to no one. Therefore, it's crucial to define the specific niche you want to target with your video streaming service. Every digital tool should be designed with a particular audience in mind. This niche doesn't have to be small—for instance, Netflix has over 223 million subscribers.

Knowing your target audience will help you decide the type of content you want to offer. Alternatively, if you already have specific content in mind, you should identify the audience that would be interested in it. This step is essential at the beginning of your video streaming app development, as it will guide you throughout the entire process.

Initially, Netflix focused on Hollywood and indie films. As its user base grew, Netflix expanded by investing in original content such as TV series, stand-up specials, and documentaries, which helped it stand out in the market.

Step 2: Choose the Right Business Model

When developing an app similar to Netflix, it's important to understand that it may take several years to see profits. Initially, you might spend more than you earn, but with time, you should be able to break even and eventually make a profit.

Before investing in OTT app development, consider the overall value of your video streaming service. Think about the lifetime value of your customers, as this will help you maximize the platform's overall value. It's also crucial to monitor user behavior and respond accordingly. The more time users spend on your app, the more likely they are to commit to a long-term subscription.

It is important to set aside a budget for marketing activities and choose the best monetization strategy. You could offer monthly, bi-annual, or annual subscriptions, but don't forget to include a free trial. This is an excellent way to attract new customers and convert them into regular users. 

Step 3: Create and Organize Your Video Content

After identifying your niche, the next step is to start creating your video content. This includes preparing subtitles and ensuring you meet various regional regulations, which are important depending on where your users are located.

Once your video content is ready for streaming, it's crucial to organize it in an attractive way. A well-organized catalog can boost user engagement, drive more business, and improve retention. Consider categorizing videos by relevant themes, offering multiple filtering options, and using appealing thumbnails along with catchy titles and descriptions.

Additionally, it's important to regularly update your content, maintain high video quality, and ensure your stream is consistent without interruptions. These factors will enhance the user experience, which is essential for the growth of your video streaming app.

Step 4: Choose the Right Tech Stack

When developing a video streaming app similar to Netflix, it's crucial to select the optimal tech stack. This choice will enhance user experience and maintain service stability, even with varying traffic levels. 

Additionally, you want your streaming service to be scalable. Achieving these objectives requires a robust architecture backed by the appropriate tech stack.

Step 5: Customize Your Video Streaming Service

It's clear that replicating an existing app or website exactly is not beneficial. To stay competitive, personalization is what all you need. Focus on your target audience and strive to make your app more attractive to them through design and content.

You can be innovative in your personalization approach. Common methods include offering curated content (such as themed playlists or selected pieces like Barack Obama's summer playlist), data-driven content (like Spotify's Wrapped campaign), providing relevant recommendations (which are continually improving), or promoting new content that might interest the user, their friends, or listeners with similar tastes.

Step 6: Select Your Target Platforms

To maximize accessibility, ensure your OTT app is available on different devices. This includes PCs, laptops, tablets, and smartphones as well as smart TVs, gaming consoles, Blu-ray players, and set-top boxes.

Initially, you might focus on the most popular devices and then analyze usage data to better understand your audience. This will help you decide if expanding to other devices is worthwhile.

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Step 7: Promote Your App

Marketing your video streaming service is as crucial as developing it. Your platform's success will ultimately depend on its audience. Develop strategies to attract new users through relevant channels, such as offering discount codes, and plan how to retain them. 

The type and frequency of content you add to your platform are also important. Use your app's usage statistics and user behavior insights to guide your content strategy.

How Much Does It Cost to Develop an App Like Netflix?

It is obvious that developing an app like Netflix requires significant time and resources. The overall cost will depend on the features you want to include and the development team's expertise. 

Here's an approximate breakdown of the development costs for different levels of complexity:

Basic Streaming App

• Development Time: 3-4 months.
• Features: Basic video playback, user registration, search functionality, and a simple user interface.
• Cost Estimate: $15,000 to $40,000, depending on the region and the development team's expertise.

Moderately Complex OTT App

• Development Time: 5-8 months.
• Features: This includes all the features of the basic app, plus content categorization, user profiles, comments and ratings, basic analytics, and some integrations.
• Cost Estimate: $40,000 to $100,000, considering the additional features and extended development time.

Advanced Streaming App

• Development Time: 9-15 months or more.
• Features: Advanced functionalities such as live streaming, machine learning-based recommendations, multi-device synchronization, offline viewing, multi-language support, advanced analytics, third-party service integration, and robust security measures.
• Cost Estimate: $100,000 to $500,000 or more, depending on the specific requirements and the project's complexity.

Conclusion

So, that’s it in this detailed guide to OTT app development guide to build an app like Netflix. We tried to cover each crucial information required to start a video streaming service business. However, before you start, you will first need inspiration from Netflix’s business and monetization model, and you should know better about the features and functionalities that would make a big difference. 

So, whether you’re building an app like Netflix, Amazon Prime Video, or any other OTT platform, we at Mtoag Technologies stand by your side as your trusted partner. We have over 15 years of experience in the mobile app development domain and will be beneficial to this partnership. So, book a free consultation with our expert mobile app developers today!

FAQs

How Do I Create an OTT Platform App?

To create an OTT platform app, define your target audience and content strategy. Develop the app using a robust tech stack, ensuring it supports high-quality video streaming. Integrate features like user authentication, payment gateways, and content management. Finally, test thoroughly and deploy on various platforms.

Is Netflix an OTT App?

Yes, Netflix is an OTT (Over-The-Top) app. It delivers video content, including movies, TV shows, and documentaries, directly to viewers over the Internet, bypassing traditional cable or satellite TV providers.

What Framework Does Netflix Use?

Netflix uses various frameworks and technologies. Its backend services primarily use Java and Spring Boot, while its frontend development relies on Node.js and React.

Is Netflix Built on Java?

Yes, Netflix's backend is predominantly built on Java. Java's scalability and robustness make it ideal for handling Netflix's extensive data processing and streaming requirements.

What is the Tech Stack of Netflix?

Netflix's tech stack includes Java, Python, Node.js, React, MySQL, PostgreSQL, Amazon S3, Amazon EC2, Apache Kafka, Apache Cassandra, and Apache Spark. This tech stack ensures efficient data processing, storage, and seamless content delivery.

What is the Backend of Netflix?

Netflix's backend is powered by a microservices architecture, using technologies like Java, MySQL, Gluster, Apache Tomcat, Hive, Chukwa, Cassandra, and Hadoop. This setup allows for scalable, reliable, and efficient content delivery and user management.