TV and streaming uses different business models compare to the conventional industries in which you sell or deliver a product or service then the transaction is done. TV and streaming is a Software-as-a-Service in which you charge through subscription basis, pay-per-view, freemium, or advertisements. However, the most common approach to charge your customers is on a subscription basis.
Given the indirect way of charging users for your services, you need to look at vital metrics to assess the feasibility of your prospective venture. The Key Performance Indicators (KPI) assess the driving factors for revenues and growth of your business.
Let's take a look at these key metrics in assessing your TV and streaming service.
1. MRR/ARR
When you are charging on a subscription basis, you have Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR). MRR or ARR is a unique measure of your business that calculates the revenue from your customers. It also tracks new sales, upsells, renewals, downgrades, and churn.
Providing easy-to-use and navigate interphase of your website or app is a significant factor why customers continue to use your service. No one wants a complication to watch their favorite movies or series. Continue to upgrade your product offerings for your customers to have a lot to choose from.
2. Customer Acquisition Cost
To gain customers, you have to spend on marketing expenses. This way, you will reach out to your target audience through different marketing channels. Marketing expenses are divided by the number of active users to get the Customer Acquisition Cost (CAC). Also, it is noteworthy to note that it is less expensive to maintain the current customers than to spend for new clients. That's why it is crucial to take care of the existing customers and retain them.
To illustrate CAC computation, let's say you spend $50,000 monthly for marketing expenses, and you get 250 customers. It means that your CAC is $200.
3. Lifetime Value (LTV)
Lifetime value (LTV) is the average return per user for the duration of stay as a paying customer. Reducing the churn rate will significantly increase LTV. Meaning, per user renewal, will increase the customer lifetime value. On average, LTV: CAC ratio is 3:1, or you should earn 3x as much as the CAC for your business to be profitable.
4. Average Cost of Service
Aside from monthly recurring revenue, customer acquisition costs and lifetime value, the average cost of service is another meaningful metric to look at. The average cost of service is the cost you spend to provide service to your existing customers. These costs include technical support, hosting, R&D, and account management. By computing the average cost of service, you will be able to identify your fixed and variable costs and provide you with input on how to cut costs without sacrificing value to your customers.
5. Churn Rate
Churn rate is the percentage of subscribers who discontinued availing of your services. It measures how effective your services are and if the customers are still happy with your product offerings. If they don't find added value with your show offerings, they will eventually churn.
As you are starting, you will first attract loyal customers. But as your customer base is growing, so is the churn rate. Customer retention is established over time as the customers who find value in your service will stay.
Presented above are the key metrics affecting the revenues and growth of your TV and streaming. You must keep them in watch and take immediate actions if the metrics are out of the ordinary to check if your business is stagnating or losing money.
Financial models templates for TV and streaming are available in eFinancialModels. Experienced industry experts prepared these templates to aid in your financial planning tasks. You can check their financial model templates here.
Features and Cost to develop a video streaming app like Netflix, along with a brief overview on why it is one of the most popular apps on OTT platforms.Read More: https://www.prismetric.com/video-streaming-app-development-cost/
FuboTV brings you all the channels you love to watch in one place and at one fee.With the rise of streaming services, watching your favorite sport is easy, unless you’re constantly swapping between hosts.
FuboTV is your all-in-one sports destination.The service has over 100 channels bringing your favorite sports to your mobile device.
Channels you’ll find while browsing the app include CBS, FOX, TBS, TNT, and your regional sports networks.Thanks to the vast number of channels there’ll always be plenty for you to watch.
Between all these, you’ll find over 30,000 professional and college events to enjoy.
You can cheer for your favorite MLB team or Olympic athlete as you watch the games live.If sports aren’t all you want to watch, you can sit back and enjoy over 10,000 hours of on-demand series and movies.
This includes acclaimed series and blockbusters from AMC, FX, Showtime, and more.FuboTV comes with 30 hours of cloud DVR space that’ll store any shows you want to record from a channel.
Learn how to create a streaming service like Netflix.
Explore how to start streaming service with unique features.The creation of a streaming service doesn’t end with development.The process comprises of 9 main steps and a number of sub-steps:Finding a niche and USP - You shouldn’t think about how to create a streaming service like Netflix; think about how to start a streaming service with unique features instead.
Only this way your solution will have any chance for success.Creating a business plan - You can’t decide how to start a streaming service without having a strict business plan that will guide all your actions.Content licensing - Another significant part of preparation is making the business legal Aside from legal registration, content licensing is also an inseparable part of video streaming services creation.Finding a reliable app development company - Find app development companies on such platforms as Clutch, The Manifest, etc.
Check the reviews of shortlisted companies.Deciding on the video streaming app’s functionality - The number of features you decide to implement directly influences the complexity of mobile app development and development cost.UX/UI design creation - Create a unique style that will make your app different from the competitive applications.Choosing technologies - Understand which technologies go into the creation of such an application.
Building a streaming service with the right technologies is required for its proper functionality.Marketing and promotion - Marketing and promotion should become integral parts of your strategy.
Without a comprehensive marketing strategy, no one will know about your application.Feedback gathering and planning for growth - After the first version of your app is released, gather feedback from first users.
Want to develop on-demand Live TV apps like Hulu and Netflix?
Read this blog and know how to strategize your mobile app development for Live TV.
Netflix
Netflix is the world’s most popular subscription service for watching TV shows and movies on your preferred device. The Netflix mobile app and smart tv app is one of the best video on demand apps and delivers excellent user experience in online streaming. Get the free app as a part of your Netflix membership and you can instantly watch thousands of TV episodes & stream movies online on your mobile device.
Apple TV+
Apple TV+ is Apple’s original video subscription service which will be available from fall of 2019. It is undoubtedly a brand new home for the most creative artists from all over the world, showcasing many interesting and unique shows, movies and documentaries. This online streaming service will be available exclusively on the Apple TV video on demand app.
Apple TV+ vs Netflix
How does the new online streaming subscription service differ from the world’s most popular video streaming service, Netflix? Will Apple TV+ really surpass the number of users of its toughest rival? Will Apple TV+ be the new “binge watch”?
Music is ultimately the best healer and maybe that is why the music app industry is reaching its peak at this pace.
Definitely, Spotify is currently ruling the industry and but this doesn’t mean that it can’t be beaten.
Want an expert?
And if you are reading this then I guess you have already figured it out how to become the next big thing in the music streaming app industry.
Read on to know the steps involved.
