The global entertainment industry is growing quickly due to the phenomenon of Over-The-Top (OTT). With theatres not open everywhere amidst the Covid-19 pandemic, Netflix has grown from strength to strength. The American platform allows millions of users to stream movie shows and TV series anytime and anywhere. Today, Netflix has a rock-solid brand reputation and always gets a lot of eyeballs when it releases a new flick. It covers around 190 countries which is a key factor behind its huge revenue and massive user base. Entrepreneurs aiming to dominate the online entertainment sector can establish a Netflix clone app. They can connect with a proficient app development company and discuss their business objectives.
lucrative business model of a Netflix clone
Different Revenue Streams
Exclusive partnership with filmmakers – Netflix recently struck a multi-movie deal with Steven Spielberg, an Oscar award-winning director, Steven’s production company, Amblin Entertainment. Obviously, the American streaming platform would have paid a huge amount to get the broadcasting rights of Spielberg’s upcoming flicks.
Subscription Plans – The Netflix platform pocketed a humongous revenue of $7.34 billion in the second quarter of 2021. A majority of its earnings came from its lucrative streaming plans. Users can choose from 4 plans (Mobile, Basic, Standard, and Premium) as per their requirements and viewing habits.
There is a difference in the number of devices and the resolution (HD and Ultra HD) from one subscription plan to another. Accordingly, movie enthusiasts can select either monthly or yearly streaming packages. Additionally, they can cancel or change their subscription plan anytime.
Sale of online merchandise – The American streaming giant has come out with its own online store, named Netflix Shop. Likewise, customers can purchase high-quality merchandise sold by leading artists and designers.
For instance, users can buy branded caps, cushions, hoodies, pillows, and T-shirts. Later, they process transactions via Google Pay and Shop Pay.
Entrepreneurs can consider introducing an e-commerce platform on their Netflix clone app. They can sell limited-edition collections and boost their Gross Merchandise Value (GMV).
Transaction processing charges – Users execute online transactions while purchasing a Netflix subscription plan. Hence, they must pay a small fee while processing payments via American Express, Diners credit card, Mastercard, net banking, and Visa.
Netflix Clone – Cost Structure
Importantly, Netflix incurred an expenditure of $8 billion for purchasing content in the first 6 months of 2021. Further, it will spend a whopping $12 billion this year for buying the international streaming rights of various movies and TV series.
Likewise, techpreneurs need to spend money for different purposes when they own a Netflix clone app. It comprises costs like
- Mailing of DVDs to the customers. These movies are not available for online streaming. Therefore, shipping costs are incurred depending on the user’s location.
- Maintenance of the Android and iOS mobile apps and the web-based streaming platform.
- Managing heavy video traffic through a modern Content Delivery Network (CDN). Techpreneurs can use OpenConnect ( a software for linking to VPNs). This will help Internet Service Providers (ISPs) to distribute movies and TV series efficiently.
- Implementation of digital marketing campaigns across social media platforms like Facebook, Instagram, and Twitter. It involves hiring content writers and copy editors. They will post updates about new film releases and other upcoming collaborations.
- Offering discounts like coupons and promo codes to attract new users. Furthermore, this ensures an affordable movie streaming experience for users.
- Producing or co-producing a new TV show under “Netflix Originals”. This one-of-the-kind content will not appear on any other Over-The-Top (OTT) platform.
- Undertaking extensive research to understand the preferences and tastes of users. For instance, Netflix spends heavily on technologies like Artificial Intelligence (AI) and Machine Learning (ML).
- Paying salaries to the employees and interns depending on the nature of their work. For example, interns at Netflix research multiple areas like data analytics, computer vision, natural language understanding, personalized sharing of recommendations to users, and reinforcement learning.
- Re-release of cancelled shows after a certain period. Generally, entrepreneurs can reduce their operating costs by producing only 1 or 2 seasons. They can also stream it only across a few regions depending on their target audience. Owners of a video streaming app like Netflix can also team up with TV channels to revive old movies and shows.
- Spending on cloud platforms to ensure safe storage of all the movies and TV series. Netflix uses Amazon Web Services (AWS) to ensure a high level of reliability and scalability.
Top 5 features of a Netflix clone app
- A dedicated Help Centre for offering 24×7 technical assistance. Movie buffs can resolve glitches and queries related to the cancellation of subscription plans, device compatibility, payment processing, and streaming.
- A Download option for cinema lovers. They can easily watch their favourite movies and TV series offline on their devices.
- Multi-device compatibility is a special aspect of the Netflix like app. Accordingly, users can utilize their laptops, smartphones, tablets, and TVs. Further, they can access the online streaming platform through Apple TV, Blu-ray players, PlayStation, and Xbox.
- Sharing of real-time notifications with members. They receive the latest updates related to new releases and upcoming episodes or seasons.
- A Social media login option is present for users. They can sign in to a video streaming app like Netflix through their Facebook, Google, Instagram, and Twitter accounts.
Wrapping Up
Above all, Netflix is constantly innovating. The American OTT platform is also planning to earn revenue from video games in the future. It will focus on adding more subscribers in the future. Generally, it gets around 25 to 30 million new customers every year.
Importantly, the demand for content on a top-notch platform like Netflix will continue to grow. Moreover, filmmakers and producers are directly releasing their movies on the streaming platform. Therefore, it helps them to reach a global audience which is not possible in the case of a theatrical release.
Finally, entrepreneurs can move forward in the global live streaming industry by commencing Netflix like app development. Accordingly, they will witness an increase in daily user activity and revenue soon.