How to Start Your Own Video Streaming Service 

Over-the-top (OTT) streaming services like Netflix are becoming more popular due to their extensive content selection, exclusive shows, and flexibility.

Considering the demand, starting your own streaming service can be a great way to make money online. However, creating a successful streaming business requires proper planning and technical preparation. While a complicated project to begin, having the right knowledge can make all the difference.

To help you get started, we will cover the steps from determining your ideal niche to creating an effective marketing plan to attract viewers. By the end of this article, you’ll be fully equipped with everything you need to know.

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How to Start a Streaming Service

This section will explain how to research your market to implement marketing strategies and acquire customers.

1. Do a Market Research and Choose a Niche

Market research is crucial for understanding the type of video content your target audience wants. It also provides insights into potential viewers’ preferences, allowing you to tailor your service based on their needs.

Studying the video streaming market also involves assessing existing competitors’ strategies to determine which approach is working. For example, you can identify their brand positioning and messaging.

After understanding the opportunities, let’s choose a niche – the user segment you want to serve. Focusing on a specific area helps you create an efficient strategy and become more competitive.

To choose one, ask the following questions:

  • Can I offer new services in this segment? 
  • Is this niche sustainable and provides room for growth?
  • Do I have the experience, expertise, and passion in this topic?
  • Are there too many established players and too few competition opportunities?

For example, education, sports, and fitness are excellent niches for new streaming services. These segments have a potential audience and are relatively untapped.

Conversely, a general segment like entertainment is highly populated and has many established platforms. While it offers a high growth potential, competition is very tight, making it difficult for newer streaming businesses to be seen by their target audience in the first place.

2. Develop a Unique Value Proposition

A unique value proposition sets you apart from competitors. Establishing a clear selling point helps attract potential customers to your service.

To create a compelling proposition, understand your audience’s demographics and their needs. For example, determine their preferred features in streaming platforms, their pain points in existing services, and the type of content they enjoy.

Then, identify the gap in the market and position your service accordingly. Your video streaming business should offer solutions tailored to your potential customers that competitors don’t have.

For example, a lot of existing video streaming services in the cooking niche aren’t interactive and don’t feel personal. An ideal value proposition is to offer a service with engagement features like Q&A and highly personalized content recommendations.

Remember to communicate your unique value proposition clearly in the marketing materials and across your website later. Avoid using jargon and technical terms since they might be difficult to understand, potentially causing potential users to miss your selling points.

Pro Tip

You can create multiple unique value propositions to answer several users’ pain points. Also, this selling point can change and improve over time as you understand more about potential viewers’ needs.

3. Choose a Business Model

A business model helps you identify how to make money from your business while keeping it profitable. This plan is crucial to ensure your business can be sustained for a long time.

Choose Revenue Stream

Choose revenue streams based on insights gathered from previous market and audience research. In addition to offering what potential clients prefer, you can provide solutions that competitors lack.

For example, if your target audience’s main pain point is the lack of free options, include freemium content or a trial period.

Plan Your Distribution Channels

Moreover, you must decide on the service distribution channels – using a website, application, or set-top box platform.

We recommend a website or web application because they are more easily accessible across different devices. Moreover, you can add various features to enhance the user experience.

Depending on their complexity, video streaming app development might also cost more. For reference, check out our tutorial about the cost of building a website.

Determine Business Expenses

Next, determine your business’s one-off and recurring expenses. With this information, you can set the ideal pricing to ensure your service is financially sustainable. In this step, you can also consider incentives like offers and discounts.

Recurring expenses for an online video streaming business include technology subscriptions and website maintenance. Meanwhile, content acquisition, marketing, and development service fees belong to the one-off costs.

When creating a streaming service business plan, also identify potential partnerships and vendors for your service. For example, look for web developers, marketing agencies, and content providers. You can then negotiate the prices before finalizing your expenses.

After calculating the expenses and considering the tax, set your pricing structure. To make your business more attractive, avoid setting your margin too high. It is normal to hit the break-even point and make up for the loss later.

4. Monetize Your Streaming Service

Based on the pricing structure, let’s set up the monetization strategy. Subscription video on demand (SVOD) is a popular method for a streaming service. It grants users access to the entire content library for some time.

Alternatively, you can use transactional video on demand (TVOD), which uses the pay-per-view method. The ideal method depends on your target audience’s preferences and market trends.

For new streaming businesses, we recommend offering a free trial period or free content to entice audiences. For example, users can enjoy the first two episodes of a new show while the rest are subscribers-only.

You can also enable video ads or promotional overlays on the free content. However, it requires an extra step since you must pitch your partnership proposal to potential brands to get sponsorships.

Pro Tip

If you are live broadcasting your content, there are different monetization models.  Check out our article to learn more about different methods to monetize your live streaming business.

To appeal to different audience needs, create multiple subscription plans with different lengths and premium perks. For example, higher-tier users can enjoy up to 4K, ad-free streaming, while the basic ones can only watch 720 HD content with mid-roll ads.

Remember to price the plans according to your business strategy and review them periodically to stay competitive. Also, leverage multiple monetization models to diversify your income source for optimal financial sustainability.

Now, decide whether you want to create original content or acquire it from third-party sources. It is important since the legal and copyright considerations may differ. Let’s have a closer look at the options.

Original Content

If your streaming platform uses original content, you can freely use, distribute, and display it. You don’t need to worry about legal matters except when registering it for license and copyright to protect it from unauthorized usage.

Note that creating original content requires more time and resources. In addition, you must market the content to increase awareness and attract potential audience.

Outsourced Content

Alternatively, you can outsource content from production houses, publishers, distributors, or creators. You may not need to market this content since users might already be familiar with it. However, third-party content licensing requirements are more complicated.

Depending on the content provider, you might need to comply with different agreements. For example, they might charge a one-off fee, want recurring royalty, or prefer revenue-sharing. Some parties might also impose additional obligations for usage, distribution, and monetization.

To avoid legal issues, carefully review the content usage policy and copyright laws before pushing content to your platform. Also, regularly check regulations in your jurisdiction to ensure compliance.

We highly recommend consulting with legal experts before acquiring content to avoid potential disputes. For example, you can ask them to help clarify the agreement, negotiate the deals, and plan a risk management strategy.

6. Choose the Right Streaming Platform

Now that we have finished creating the business plan, let’s set up the broadcasting platform. You can use a pre-built streaming solution like DaCast or configure your own host server.

A pre-configured platform is simpler since it includes all the necessary software. However, a custom host is generally more affordable, flexible, and compatible with extensive streaming tools. These customization options enable you to tailor the platform to your business needs.

A VPS is a popular solution for deploying an on-demand streaming platform. It provides excellent performance, isolation, and scalability, suitable for resource-intensive applications.

We will use Hostinger VPS hosting because it supports various streaming software and utilizes a powerful infrastructure to ensure a reliable broadcasting platform. It also has 24/7 customer support to guide you during the setup and maintenance process.

Moreover, our plans offer various features that help simplify server management and application deployments. For example, beginners can connect to the remote system via a web browser using our Browser Terminal and generate instructions with the VPS AI Assistant.

After purchasing a plan from Hostinger, complete the onboarding process to set up your VPS. Once finished, decide on how you want to build the streaming website:

  • Development methods. Decide if you will develop the streaming platform yourself or outsource developers. 
  • Distribution channels. Choose how you want to distribute your content, such as through a website, mobile application, or both.
  • Features. List the features you want to include based on your business plans, which might include subscription, download, and comments.
  • Streaming tools. Compile all the tools you want to use to enhance your streaming platform, like the Mux data analytics software.

Carefully consider these aspects since they will impact your budget and timeline. For example, hiring freelancers to build your video streaming app is more expensive than doing so manually, but the development process is faster.

To lower costs, include only essential and basic features for streaming purposes, like a playlist. We also recommend creating a web application as the distribution channel since it is usable on both desktop and mobile.

7. Build an Infrastructure for Streaming

After creating the blueprint, let’s set up your video streaming server. From this point onwards, the process becomes more technical as you will configure the components for the platform’s infrastructure. If you need help, we recommend using our VPS AI Assistant.

The components of a streaming infrastructure vary. Commonly, it consists of the host server, encoder, content delivery network (CDN), media player, and monitoring tool.

Host Server and Back End

Your VPS will act as the streaming platform’s host server, storing your content and serving it to users. You will also set up most of the infrastructure components in this system, including the web application and video streaming technology.

The host server will also contain the back-end components of your platform, including the database that stores user data and enables dynamic content. Examples of this software include MySQL and PostgreSQL.

To accept and process users’ requests, your VPS needs web server software like NGINX. It must also have sufficient storage, CPU power, and RAM capacity to handle the load from a large traffic.

Encoder and Streaming Protocol

Encoder software breaks down your videos into smaller data packets and sends them to the viewers. Upon receiving them, users’ media players will then decode the information to display the delivered content.

Since there are various encoders with different features, check their features before deciding. For streaming on your VPS, we recommend installing FFmpeg since it offers high performance and comprehensive features.

This tool lets you change various video settings, like bitrate, codecs, and resolutions, to compress your media files without losing their quality. Fine-tuning the video quality is crucial to ensure stream responsiveness and optimal viewing experience.;

In addition to an encoder, you need to set up a streaming protocol to enable data transmission with clients. Real-time streaming protocol (RTMP) is a widely used option because it is compatible with various media players. You can install it by enabling the rtmp module in NGINX.

Content Delivery Network

A content delivery network (CDN) is a collection of servers spread across multiple geographical locations that cache your hosted content.

This service helps improve your streaming service responsiveness by serving user requests from the caching server closest to their locations. In addition to reducing latency, it offloads the traffic from the host system to maintain stable performance even during high traffic.

In addition, CDN helps safeguard your VPS from cyber attacks like distributed denial of service (DDoS). Cloudflare is a popular provider of this service, offering a free plan that is sufficient for a smaller web application.

Front End and Media Player

To stream video content, users must access and interact with your platform’s front end. You can create a website using a content management system (CMS) like WordPress or develop an application from scratch.

If you develop your application using frameworks like Laravel or Django, ensure your server supports it. Hostinger offers a one-click installer for these applications using the VPS templates to speed up the deployment process.

Within the website or application’s code, add the media player function to load videos from the back end. You will also need a domain name, which helps users discover your streaming platform more easily.

Monitoring Tool

While not essential for functionality, a monitoring tool is a crucial component of your streaming platform infrastructure.

Tracking server performance metrics like uptime and resource utilization ensures your platform’s responsiveness for optimal user experience. Popular tools for this purpose include Prometheus and New Relic.

However, you must set up these tools manually, which can be time-consuming and complicated for beginners. If you want a simpler solution, use our built-in monitoring feature in hPanel.

In addition, set up a monitoring tool for metrics like concurrent viewers, conversion rate, and bounce rate to gain insights into your current business strategy. You can do so using solutions like Mux Data and NPAW.

8. Develop a User-Friendly Interface

Implement a user-friendly interface to your streaming website or application to ensure optimal usability. This will improve user satisfaction, retention, and engagement, which are crucial for video streaming success.

In addition to applying web design best practices, creating a user-friendly interface involves adding features that enable visitors to use your platform and enjoy content seamlessly. Here are several considerations:

  • Personalization. Provide users with content recommendations based on their viewing history, preferences, and behavior. It helps them discover videos they like more easily, potentially improving retention and engagement. 
  • Playback control. Include additional features like playback speed, closed-caption toggle, and quality selection. They give users more control over how they watch videos on your streaming app.
  • Responsive design. Employ responsive design principles to ensure your video streaming website or application remains usable on mobile devices. Otherwise, the interface might not display properly, harming user experience.
  • Content explorer. Add features that help users discover content more easily, like a search bar, category tags, filters, and a sorting system. 
  • Accessibility features. Enable closed captions, image alt-texts, keyboard navigation support, adjustable text size, and customizable contrasts to ensure all users can use your platform seamlessly.

To determine whether your online video platform is user-friendly, conduct a usability assessment, create a survey, or use a heatmap analytics tool. Also, run an A/B test after you apply changes to see if clients like new additions.

9. Marketing and Promoting Your Streaming Service

Now that your streaming business is online and ready let’s market it to attract new customers. The steps involve coming up with a strategy to increase brand awareness, reach your target audience, and attract new paying subscribers.

To start, determine your marketing funnel – a visualization of a customer’s journey from discovering your service to becoming a loyal follower. Since users have different preferences depending on their current stage, creating this plan is crucial to ensure you use the right strategy.

Then, consider these effective streaming service marketing strategies to promote your business via different channels:

  • Content Marketing. Create blog posts, articles, videos, or interviews related to your streaming service. For example, you can write coverage and synopsis about an upcoming series on your platform.
  • Social Media Promotion. Connect with potential customers and share related content about your business on social media, like Instagram, Facebook, or X. Leverage multiple platforms to broaden your reach.
  • Influencer Partnership. Collaborate with creators, actors, or experts in the streaming industry. It allows you to create insightful content and tap into their fan base to promote your streaming platform.
  • Newsletter. Send promotional emails to signed users about updates, promotions, and upcoming releases. This marketing technique is ideal for nurturing free users into paying subscribers.
  • Search Engine Optimization (SEO). Optimize your streaming platform by adding keywords, meta tags, and backlinks to improve its ranking on the search engine results page. It helps make your website more easily discoverable for users searching related queries.
  • Paid advertising. Use advertising services to promote your streaming business on popular websites like Google, Facebook, Instagram, and YouTube. Experiment with different targeting strategies to optimize ad effectiveness. 

Efforts like SEO and content marketing are best for generating organic traffic, but they require a long time. Meanwhile, paid promotion and endorsement add extra cost but are effective in drawing leads to your funnel quickly.

What To Do After Launching Your Streaming Service

Now that you can start streaming online media, consider the following best practices to ensure your business’s relevancy and sustainability.

Secure Your Infrastructure

A video streaming platform contains copyrighted materials and collects users’ personal information, like their email addresses. Applying robust security practices to its infrastructure is vital for data safety, service reliability, and legal compliance.

To safeguard your streaming platform from cyber criminals, follow VPS security best practices:

  • Install secure sockets layer (SSL). Issue a free SSL certificate on your VPS using Certbot or purchase one from a third-party provider like KomodoSSL. It encrypts connection between users and your server to enable secure data transmission.
  • Set up a firewall. Configure firewall rules to filter malicious traffic and avoid DDoS attacks. You can do so using Linux’s iptables, Ubuntu’s uncomplicated firewall (UFW), or Hostinger’s integrated firewall on hPanel.
  • Scan for malware. Run a malware scan periodically to detect and remove malicious software on your server. Hostinger users can use the built-in Monarx malware scanner via hPanel.
  • Update all software. Regularly update all software in your VPS to ensure you install the latest security and bug patches. We recommend creating a cron job to automate the task. 
  • Check logs and permissions. Audit server logs and all user permissions to identify unauthorized access to your server. Hostinger users can also check the activity logs from hPanel.
  • Back up your server. Regularly back up your VPS files for easy restoration in case of issues. To simplify the task, Hostinger users can use the automatic weekly backup feature.  

Evaluate Strategy

As your streaming business grows, you should adjust your strategy to adapt to the new competition, market demands, and focus. For example, your current business model focuses on attracting leads, but you must start generating income since you already have a large audience.

To maintain your service relevancy, create a comprehensive marketing strategy by applying these best practices:

  • Track key-performance index (KPI). Regularly assess metrics indicating your business health, like viewer counts, subscriber growth, and monthly income. Compare the numbers periodically to identify your strategy’s weaknesses based on your current goal.
  • Keep up with market trends. Look for new demands or trends that you can leverage for your business’s growth. For example, acquire a highly anticipated show or set up a new popular pricing scheme.
  • Analyze financial conditions. Check your pricing schemes, cost structure, and profitability. This will help you identify opportunities for cost reductions and revenue diversifications to maximize return on investment.
  • Develop long-term focus. Determine your business’s future goals to ensure longevity and profitability. Remember to set actionable plans for each objective to ensure it is tangible and measurable.

Scale Your Platform

To cater to the expanding user base and fulfill their content demands, scale your platform infrastructure. It enables your streaming service to remain responsive when many viewers are accessing it simultaneously.

Upgrade your VPS storage space if you plan to add more content. Meanwhile, switch to a system with a higher CPU core count and RAM capacity if your streaming website lags during traffic spikes.

At Hostinger, our VPS hosting plans are easily upgradable anytime with little to no downtime to ensure seamless scaling. You can upgrade to up to KVM8 with 8 CPU cores, 32 GB of RAM, and 400 GB of SSD storage, sufficient for a high-traffic streaming platform.

You can also scale out your infrastructure by creating multiple application servers on different VPS instances. Then, set up a load balancer – an intermediary system that evenly distributes traffic between hosts.

It helps avoid overloading the main host with traffic, which can cause significant performance degradation or downtime.

Moreover, you can host your database, application, and web server in different VPS instances to optimize hardware usage. Focusing resource utilization on a particular component improves your video streaming platform’s stability.

Enrich Content Variation

In addition to attracting a new viewer base, expanding your streaming service’s content helps retain existing subscribers. Consistently offering new shows keeps users engaged, preventing them from switching to another platform with more options.

While you can enrich your streaming service library with content beyond your niche, staying in your segment can also be beneficial. Depending on the uniqueness of your segment, it can give a competitive advantage since users can’t find such content on other platforms.

Here are several content diversification strategies to consider:

  • Explore international shows. Acquire content from different countries, provide content localization services, and add subtitles in various languages to cater to the global audience.
  • Invest in original content. Create original content to differentiate your service from others in the market. This is especially effective if you operate in a small niche with a small third-party content pool.
  • Establish exclusive partnerships. Collaborate with production houses, studios, video creators, or publishers to secure broadcasting licenses for exclusive content or upcoming shows.
  • Evaluate user preferences. Track popular categories and expand them to leverage the demands. Also, create surveys and ask questions on social media to identify the type of content your audience wants to see more of.

Remember that expanding your library through video curation or creation incurs additional costs. Choose the content carefully to avoid loss and optimize return on investment.

Conclusion

Starting a streaming service is a great way to make money online, banking on the platform’s popularity. To start this kind of business, conduct market and audience research and identify your ideal niche.

After identifying user preferences in your niche, develop your value proposition to distinguish your platform from competitors. Then, plan your business structure, including the pricing scheme, distribution channels, and content acquisition strategy.

Based on your distribution plan, create the streaming website or application. To create the platform, purchase a VPS hosting plan from Hostinger, which offers all of the needed features to make the process smoother.

To ensure optimal user experience, follow best practices and include interactive navigation features on your streaming platform. Once the infrastructure is ready, set up a subscription model to monetize your content and market your business to attract customers.

How to Start a Streaming Service FAQ

In this section, we will answer several questions about starting a streaming service. 

How Much Does It Cost to Start a Streaming Service?

The cost of starting your own streaming business depends on your VPS plans, software, and extra services. For a self-developed platform, you only need to pay for the hosting. At Hostinger, a VPS subscription starts at ₱299.00/month, while a domain costs $0.99/year at the minimum.

What Technical Infrastructure Is Required for a Streaming Service?

To create a streaming platform, you need a host server. You can use a Linux VPS hosting plan from a provider like Hostinger. Within the system, you also need encoder software, a web server like NGINX, and a database to deliver the requested video content.

How Can I Acquire Content Licenses for My Streaming Service?

You can acquire content licenses by contacting the production houses, distributors, or creators. Since they have different agreements, we recommend consulting with legal experts to ensure copyright compliance. 

Author
The author

Aris Sentika

Aris is a Content Writer specializing in Linux and WordPress development. He has a passion for networking, front-end web development, and server administration. By combining his IT and writing experience, Aris creates content that helps people easily understand complex technical topics to start their online journey. Follow him on LinkedIn.