With extensive digitalization and technological advancements, the media and entertainment sector has undergone tremendous changes in the past decade. It has completely transformed the way people consume entertainment and has changed the distribution models giving way to video on demand service and video streaming platforms. The industry is projected to grow to a market volume of $40,095 million by 2024.
Advancements in technology and internet infrastructure have made anytime, and anywhere viewing a scalable reality. With the launch of over the top (OTT) services like Netflix and Hulu, video on demand has been at the forefront of revolutionization in the media industry.
How Netflix has been able to experience such a tremendous rate of growth and changed the way people watch TV, that too in an irreversible way. The greatest characteristic of Netflix that contributed to its success was the ability to adapt in a world of rapidly changing technologies and preferences.
How to run a successful online video streaming business?
Considering the popularity of video streaming services, it is not surprising that more and more businesses are entering the industry. However, with Netflix, Hulu, Twitch, Amazon Prime, etc. ruling the industry, it is not quite easy for a new business to make space. If you are thinking about how to start a business like Netflix, gaining a competitive advantage in the VOD industry is the key to success. Here are some effective ways to gain a competitive advantage in the video streaming industry.
A quest for global domination
If you want to be a global video on demand brand, make sure you offer your products and services worldwide. Present in 190 countries, Netflix is easily accessible from anywhere in the world regardless of your location. Even if it’s available worldwide, the content isn’t the same everywhere. The video library varies according to the individual countries and regions due to the norms of international television trade. Netflix is seeking global rights to its originals so that it can make its content library available to all subscribers across the globe.
Additionally, Netflix doesn’t simply distribute shows produced for a particular audience. But it develops original series for subscribers in a different country that are also available to audiences in different countries. This strategy helps to reach a truly global audience.
Position your brand efficiently
When you are learning how to start a business like Netflix, the first and foremost step is to devise a business strategy to position your brand in front of your audience in the best way possible. The best way to gain a sustainable competitive advantage is to position your VOD brand in the user’s mind. There are 2 ways to do it.
- Becoming a leader in a specific niche or category
- Becoming first in any niche or category
If you plan to create a new niche, then the conventional wisdom is to search for a niche market. The general rule to find a niche market is to start small. Find and focus on particular user needs, work around it, and make your products and services dominate the niche market. If the segment is small, it is easy for you to focus on customer preferences, needs, and interests. Once you establish yourself as a leader in the niche category, you can expand and grow your business.
Content is king
To gain a competitive advantage in the industry and to rise up as a top-quality entertainment platform, it is important to have a unique variety of content offerings. In order to optimize the content portfolio, your video on demand website must make smart decisions about the shows and programs you create or acquire. Video on demand offers a wide selection of video programming, including movies, TV shows, feature films, entertainment, sports, educational videos, etc.
Curate the best foreign-language shows from across the globe and if required, re-edit them to align closely with your content format. Netflix features a vast library of licensed content including originals. In a crowded industry, hosting a couple of popular programs might not be enough. Ramp up your content portfolio to suit the interests and preferences of your target audience.
Exceptional recommendation algorithm
Video on demand platforms like Netflix don’t feature channels and all programming is streaming at the viewer’s leisure. Creating an algorithm for your video streaming service is the most significant part as it is much more difficult than people might assume. When creating the recommendation algorithm, you have to consider the general popularity of programs and interests of your users and their viewing history.
This is particularly important because when two users with different viewing histories browse a specific category, they will see a different list of program recommendations. It doesn’t end with creating the best recommendation algorithm, it is critical to continually test the algorithm and make adjustments whenever required. The recommendation algorithm of any video streaming service must be flexible enough to be shaped by the changing interests of users. The recommendation engine of your streaming platform must be really good at predicting what type of shows your audience wants to watch.
Match or exceed TV network quality
It is not enough to offer a different way to watch traditional TV, it is important to exceed the quality of traditional TV programming. For instance, Netflix has churned out a number of TV shows like Unbreakable Kimmy Schmidt, and House of Cards that sets the bar high when it comes to quality. Each of their best TV series can be measured against the best of any other network, making for an outstanding lineup.
Unique value propositions
One of the primary reasons that video streaming services like Netflix have become so popular is, they are so good at offering users exactly what they need. The core values of any video on demand platforms must aim to deliver entertainment and make users happy. The key to deriving value propositions from core values is by understanding the needs and interests of users. For example, if you consider Netflix, the major difference is in offering greater value to users by offering a blend of customer’s user experience, extraordinary convenience, instant access, and a comprehensive content selection at affordable prices. Similarly, every VOD platform must give more freedom to users by allowing them to construct their own experiences. If you are looking for different ways on how to start video on demand business, work on any value proposition like an automated movie recommendation program to offer a personalized solution for every user, thus enhancing the customer experience greatly.
The business model is important
When there are a lot of video streaming services, how Netflix, Hulu, Amazon Prime, etc. manage to remain at the top? It is because all of these streaming services have chosen the best revenue model. The great secrets for running successful video streaming platforms lies in the business model you adopt. When chosen carefully the revenue model of a business can be a powerful tool that drives business success. If you are creating your video streaming platform using a Netflix clone script, you can choose to integrate the monetization strategy that suits your business.
Back in the old days, satellite TV networks made money by selling their user base to advertisers. However, most popular video streaming platforms today, including Amazon Prime and Netflix are subscription-based services. Viewers pay a fee to gain access to their vast library of content and watch it on demand. If you are adopting the same business model as Netflix, ensure that you have enough programs to entertain viewers so that they find the service worthy of their monthly subscription fee.
Facilitate user engagement
To gain a competitive advantage in the VOD industry, take an effort to facilitate customer engagement through social media platforms. Conduct campaigns on social media to customize your brand voice for your customers. Additionally, focus on creating a close customized relationship between your brand and target audience. Netflix follows an emotional branding approach that caters to the desire of users to be entertained. When users encounter positive emotions by using a VOD service, that helps to build trust and loyalty.
Think strategic partnerships
Strategic partnerships and brand collaborations can be a win-win situation for all participating brands. For example, you can partner with any set-top box providers to form an effective strategic partnership so that both brands can benefit from it. Video streaming services can benefit from the huge user base of set-top box providers and the provider can offer their users rich entraining content in an easy way.
The best quality content delivered with a focus on user experience is set to become the cornerstone of success for any video on demand service. With user experience being a key differentiator, technology will play a significant role in the coming years. Emerging technologies can help brands create a competitive advantage by offering transparency to users that enable them to build stronger and long-lasting relationships.
With many people choosing to cut cords and subscribe to streaming services, there is a high potential in the market. Even with the tight competition in the VOD industry, the high demand makes video streaming a lucrative industry for new players.