How Much Does it Cost to Develop an OTT Platform Like Netflix in 2022

February 18, 2022

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Starting an OTT streaming platform like Netflix has become the eventual goal of many media outlets. With an independent OTT platform, content distributors can release high-quality binge-worthy movies, videos, and series without adhering to any unnecessary restrictions.

And, since users have started to rely on OTT platforms like Netflix and Hulu for their daily entertainment dose, it only makes sense for media outlets to embrace this transition and launch their own OTT platforms. Now, when it comes to starting a video streaming service, the development cost is the biggest concern for the majority of business owners. How much would it cost to start a streaming platform like Netflix? How much would I have to pay to hire mobile app developers to get my streaming platform developed? Are there any overhead charges of starting a streaming platform?

These are a few questions that people struggle to answer while launching a media & OTT service. If you are looking for a quick answer, here’s how much you’d have to pay for getting your OTT platform developed in the USA and India.

CountryDevelopment Cost of an OTT Platform
USA$90,000-$150,000
India$25,000-$60,000

But, if you need a complete breakdown of the development cost, continue reading. In this article, we’ll explain different factors that could impact the cost to build a media & OTT application like Netflix.

What are OTT Platforms and How Netflix has Transformed the Entire OTT Market?

In simple words, OTT is a media service where the content is provided to the users through the Internet. Instead of using conventional broadcasting methods such as cable or satellite, OTT platforms allow content distributors to release their content over the Internet. As of today, there are hundreds of OTT platforms in the market and the majority of them have a strong customer base.

But, the success rate that Netflix has unlocked is practically unbelievable. Originally started as a DVD-rental service, Netflix has now become the most popular OTT platform across the globe. The video streaming platform is available in more than 190 countries with 209 million subscribed users worldwide. In 2020, Netflix generated revenue of $24.9 billion and witnessed a 23.8% year-on-year revenue growth.

This exponential increase in Netflix’s revenue has also propelled the growth of other streaming platforms like Amazon Prime, Hulu, Disney+, etc. Why? Because Netflix has encouraged users to transition from the conventional media sources (broadcasting channels, cable, satellite) and get their daily dose of entertainment right on their smartphones and laptops. As a result, users are always ready to subscribe to new streaming services that could provide them with high-quality binge-worthy content.

This is the reason why the overall OTT industry is sitting at a revenue of $121.9 billion, which is further projected to reach $1,039.03 billion by 2027, showing an annual growth rate (CAGR) of 29.4% from 2020 to 2027.

How Starting an Independent OTT Platform Can Benefit Your Business?

Now, the real question is – why would you want to launch an independent streaming platform when giants like Netflix and Amazon Prime are already ruling the OTT industry. The truth is starting an independent OTT platform comes with a multitude of benefits.

For instance, you don’t have to adhere to the policies and regulations of another streaming platform as you have complete authority over your content. As a content creator, you can launch your own movies, series, short videos on your custom streaming platform and provide viewers with quality content.

Not to mention, as the sole owner of the content, you will have complete authority over the revenue model as well. Another potential benefit of starting a dedicated OTT platform is scaling your business beyond a media outlet. With your own streaming service, you can step into this multi-billion dollar market and make money hand-over-fist.

Here are some of the additional reasons to develop your own streaming platform like Netflix.

  • You have complete authority over the content and its distribution
  • You can integrate different monetization models to generate good revenues
  • No need to follow the content regulations of another platform

How Does an OTT Platform Like Netflix Generate Revenue?

Now, before we dive into the cost of developing an app like Netflix, let’s first understand how these platforms work, more importantly, how do they generate revenue? In general, the majority of OTT platforms operate on the subscription model, i.e., the users have to pay a fixed or recurring subscription fee to access the content on the particular platform.

Giants like Netflix and Amazon Prime only rely on monthly subscriptions for their revenue. However, there are many service providers that also amalgamate other revenue models along with monthly subscriptions to make money. Some of these revenue models include.

1. Pay-Per-View (or TVOD)

Pay-per-View or TVOD is a revenue model for OTT platforms where the viewers pay for a particular piece of content – live or prerecorded – and get its access for a limited time duration. Pay-per-View is a ubiquitous choice for streaming platforms that broadcast sporting events such as Boxing matches or Mix Martial Arts (MMA) fights.

The reason being such sporting events occur at a certain duration (let’s say – once a month). So, instead of charging viewers a monthly recurring subscription fee, companies could simply charge them for the particular event. This type of revenue model also gives viewers the liberty of paying for content that they like.

2. AVOD (Ad-Based Video On Demand)

Ad-Based Video on Demand is the conventional advertisement revenue model that many streaming platforms use for their revenue. In this situation, the users have free access to the content – instead, the streaming platform charges advertisers certain amounts in return for playing their commercials in between the videos.

YouTube is one of the biggest video streaming platforms that rely on AVOD for its revenue. Even though YouTube has now released its premium version – which follows the subscription model – even YouTube used advertisements to generate revenue for more than a decade. Even today, the regular YouTube version runs ads in between videos and charges advertisers for their ads.

Essential Features of an OTT Platform Like Netflix

At this point, you are already familiar with the importance of starting a streaming service and different ways to make money in the OTT industry. Now, the next step towards understanding the development cost of building a media & OTT platform like Netflix is to get familiar with its essential features.

Of course, you can integrate as many unique features as you want into your OTT app to uplift its user-friendliness, there are a few core features that remain the same across all applications. If you aren’t a tech-savvy person, you can contact a media & OTT app development companystrong> to decide which features will best suit your OTT platform.

In the meantime, here’s a list of common features that you must integrate into your OTT platform to keep the viewers engaged.

1. User Registration and Profile Management

The user profile acts as the medium for a viewer to access the content available on a streaming platform and configure different settings to enjoy a personalized viewing experience. This is the most basic feature of any streaming platform and is considered the first step in the entire media & OTT app development cycle.

YouTube is one of the biggest video streaming platforms that rely on AVOD for its revenue. Even though YouTube has now released its premium version – which follows the subscription model – even YouTube used advertisements to generate revenue for more than a decade. Even today, the regular YouTube version runs ads in between videos and charges advertisers for their ads.

2. Video Player

The built-in video player is a necessary component of any streaming platform. Through the video player, viewers can watch a particular video and control different settings such as volume, streaming quality, and playing speed to enjoy a personalized experience.

3. Social Media Integration

As a service provider, it’s your responsibility to give viewers a hassle-free user experience. One of the ways to do this is to integrate social media support. This will allow the viewers to skip the traditional sign-up process and directly set up their profile using their social media credentials.

4. Watchlist

If you are planning to develop an OTT platform like Netflix, it would be crucial to add the ‘Watchlist’ feature to your app. Why? Through a watchlist, viewers will have the ability to add their favorite movies/series to a personalized playlist and watch them whenever they get the time.

5. Offline Downloads

In recent years, the ‘offline mode’ has become a necessity in streaming apps like Netflix. Your viewers aren’t going to be connected to the Internet all the time. With offline mode, however, they’ll be able to save videos offline and watch them whenever they want, even if their device isn’t connected to a stable Internet connection. It’ll also allow them to watch a video without buffering and enjoy an uninterrupted viewing experience.

6. Payment Support

Now, it doesn’t matter which revenue model you choose for your streaming platform, it would be necessary to integrate built-in payment support so that users can pay the subscription charges directly. There are many service providers that have designed ready-to-use payment gateways.

You can hire skilled app developers and let them integrate these gateways into your OTT platform. Each of these payment gateway service providers charges a certain amount for their integration that you can pay annually or monthly.

6. Payment Support

Now, it doesn’t matter which revenue model you choose for your streaming platform, it would be necessary to integrate built-in payment support so that users can pay the subscription charges directly. There are many service providers that have designed ready-to-use payment gateways.

You can hire skilled app developers and let them integrate these gateways into your OTT platform. Each of these payment gateway service providers charges a certain amount for their integration that you can pay annually or monthly.

7. Multi-Language Support

If you are planning to launch your OTT platform globally, you may want to add multi-language support for a better user experience. Multi-language support will allow users to configure their profile in their native language and navigate through different screens more conveniently.

8. Push Notifications

Push Notifications are one of the most useful features for any mobile application – even OTT platforms like Netflix. Every professional media & OTT app development company will suggest you integrate Push Notifications support into your application. This way you can send regular updates to users regarding new releases, payment reminders, and personalized suggestions.

9. Video Playlists

Adding the “video playlists” feature is an effective way to make your OTT platform more user-friendly. Users could create multiple playlists and manage their favorite content more conveniently. These playlists will allow them to find a particular movie/TV show right away.

10. Content Search

A platform-wide content search is one of the most crucial features for an OTT platform. When your streaming platform has a wide range of content pieces, it would be necessary to ensure that viewers could find a particular content easily. A dedicated content search bar will save the viewers’ time and find content without having to go through the entire media library.

Different Factors Affecting the Development Cost of an OTT Platform Like Netflix

Now, before we break down the development cost of a media & OTT platform like Netflix, let’s take a look at some of the other factors that might affect the cost to build your OTT application.

1. Preferred Development Partner

When it comes to developing a media & OTT platform, hiring a team of professional app developers is a necessity. You can’t expect to manage the entire development process on your own, even if you have an understanding of programming. With a dedicated development team, you’d be able to streamline the entire development process and divert your focus towards core business objectives. Not to mention, an expert team will bring technical expertise to the table that’ll allow you to develop a user-centric OTT platform.

Now, you can either hire the entire development team in-house or outsource the development task to a third party. Both these development approaches have their own advantages and disadvantages. For instance, if you execute in-house development, you have complete authority over the development process. You can decide each member of the team and even plan the entire development process. But, hiring an in-house development team is downright expensive, especially if you are from first-world countries such as the USA, Canada, and Australia.

Due to higher economies, the expected salaries of professional developers in these nations are relatively higher. And, since you’d have to set up an entire team of designers, developers, and QA experts, it will most likely take a toll on your pocket to manage the salaries. Apart from this, you would also have to manage other expenses such as office rents, daily operational costs, and subscription charges for the development technologies you use.

Fortunately, that’s not the case with outsourcing development to countries like India. When you outsource media & OTT mobile app development to third-party developers, you don’t have to bear any of these expenses. All you have to do is pay a certain amount (generally on an hourly basis) and get your app developed in a hassle-free manner.

Here’s a quick comparison between the hourly rates of Indian app developers and programmers working in the United States.

CountryDevelopment Cost of an OTT Platform
USA$120-$170
India$30-$50

Due to this vast difference between hourly development rates, outsourcing mobile app development to developers in India is a comparatively cheaper and more convenient choice for small-scale businesses and startups.

2. Targeted Platforms (Native vs Cross-Platform)

While launching an OTT platform, you would also have to decide the mobile platforms you want to target. As of 2022, Android and iOS are the only mobile platforms dominating the entire mobile industry. And, since both these platforms possess over 99 percent of the global market share, it only makes sense to launch your OTT platform for both these platforms. To do this, you can either develop two separate applications for each platform individually or hire a team of cross-platform app developers to launch a hybrid application.

The development cost to build your media & OTT application will be different in both cases. For instance, if you want to develop two native applications for iOS & Android separately, you would have to hire dedicated iOS app developers and hire Android developers separately. In simple words, native app development would require paying for two separate applications.

Cross-platform apps, on the other hand, promote the idea of code reusability, which means the same developers could write a single codebase and use it to deploy an OTT app on both platforms. Consequently, the cost to develop a hybrid application is relatively lower than two separate native apps.

So, here’s a quick breakdown of the overall development cost (inclusive of all the cost-related factors) of an OTT application like Netflix

 TimeDevelopment Cost (India) $50 per hourDevelopment Cost (USA) $140 per hour
UI/UX Design80 hours$4,000$11,200
MVP Development230 hours$11,500$32,200
Features Integration530 hours$26,500$74,200
Testing120 hours$6,000$16,800
Total960 hours$48,000$134,400

Conclusion

Devising an estimated development cost for an OTT platform like Netflix is not easy, mainly due to different factors affecting the price. But, we tried our best to pen down different factors that could decide your OTT platform’s development cost and the right way to plan the budget for your application.

If you still need any assistance, contact our media & OTT app developersa> and they’ll help you compile an estimated budget for your OTT application based on your specific business requirements. In case you want to speed up the entire process and launch your custom OTT application right away, you can also avail our ready-to-use media & OTT platform. At RV Technologies, our developers have built a fully customizable OTT solution. Based on your target audience and content distribution methods, our team will customize the OTT platform, resulting in an accelerated time-to-market.

About the Author Ranjit Singh is the Chief Executive Officer (CEO) at RV Technologies. In the past 10+ years, he has focused on helping clients to expand their business through the best digital solutions. Leading a team of 100+ employees, he knows how to implement the best market practices to transform a client’s business growth and help him achieve dedicated goals.

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