The Business of streaming

A brief guide on the business models attached to the streaming world

Any streaming platform usually requires contents to popularise itself among the populace and drive itself into the mainstream. Most of the platforms offer paid subscriptions to be able to view the content the platforms has to offer. But some of the services have in-built space for advertisers to promote other products and generate revenues from the ads. Usually, how the second model with the advertisements work is that the platform offers the customers to access a standard variation of the platform and the platform also offers a premium subscription that is ad-free. 

These platforms depend heavily on the level of interaction with the customer. The level of customer interaction is directly proportional to the success of the platform. The most efficient way to increase the level of customer interaction is to make the content diverse. 

There are two ways to go about it- an aspiring business with substantial financial backing can get the rights to a diverse base of content to attract the customer base. But a lot of companies that have just started might not have the required capital to invest in a wide array of content. And here comes the second model where the platform offers a standard service free of cost but has advertisements to compensate for the lack of revenue generated by the customers. The second model is the best option when there is not a fixed customer base to start with, this works exceptionally well to attract prospective subscribers who will later turn into loyal customers. 

The factor that propels a platform into the devices of every human and that is uniqueness. Although the streaming platform is relatively new, the competition is at an all-time high these days. Multimillion corporations are already grappling among themselves for eyeballs. To enter a market that is already booming is never easy. A  business has to stand out and show the customers that they are offering something to the customer which already established companies cannot. 

Therefore, any business trying to establish themselves at the video streaming platform scene should be careful and not make rash decisions. Here are some factors to keep in mind while developing the business model:

  1. Target audience- No service should come into the picture and try to attract every demographic there is out there. Start small, attract a loyal base of customers and expand from there. For example, Xcine offers a large variety of content for the German market.
  2. Type of Content- This is probably the most important aspect of setting up a streaming service. Most of the companies starting out will not have the major financial backing to buy all types of content out there. Therefore, choosing the best content for the target audience is crucial. 
  3. Correct business model: As mentioned earlier, there are two well laid out models to follow while setting up a streaming service. The first is the ad-free and subscription-only platform where the customer has to pay in order to view any content on the platform. The second is the one which offers a standard version free of cost with ads, the customer can go premium to have an ad-free experience. 

So, there is no clear-cut answer to what business model to choose when setting up a video streaming platform. It depends on individual requirements and budget. The only thing that can be said with certainty is that any business just starting out has to be unique and come up with a service that offers features and applications that services already in the market do not offer. It’s a long and arduous process but a highly lucrative one if it comes together.

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Christophe Rude

Christophe Rude

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