While we're not in the business of app development, Amagi has been delivering video content to apps, channels, and OTT platforms since its inception.
During that time, we've seen many apps succeed and fail. The difference between them often comes down to how content owners approach video streaming app development.
In their desire to become the next Netflix of their content genre, many content owners jump into app development haphazardly and prioritize the wrong things. They invest too many resources into developing unnecessarily complex features and pay for user experiences that don't translate into ROI.
Successful app producers take an analytics-first approach to app development and distribution, meaning they:
- Understand how and why their audience consumes content so they can prioritize the right devices, platforms, and features.
- Develop apps that provide an enjoyable user experience while reducing costs and maximizing revenue.
In this article, we break down key strategic decisions that lead to successful video streaming apps, including:
- How to develop an app development and content distribution strategy that maximizes ROI
- What you'll need to build and launch your app
- Which app features actually matter.
Amagi is a cloud broadcasting platform that enables you to host, deliver, manage, and monetize the content on your app, in addition to any other platforms you deliver to — all from one ucontact us now.nified location. If you want to reduce costs and increase revenue from your app,
Four app strategy questions to help you maximize ROI
If your app is to succeed, then you'll need to use data about how your audience consumes content to:
- Develop an app that's good enough to convince them to use it (read: has compelling content and user experiences).
- Develop a distribution strategy that targets the platforms you need to maximize ROI.
You should begin by doing the one thing that many content owners who build failing apps don't do: Evaluate your app's potential to determine whether it has a viable path toward success or whether you should stick to delivering on existing video streaming platforms.
The following questions can be used to both evaluate your app's potential and develop a winning strategy.
1) How big is your content catalog?
According to a PWC survey, the second most important factor that attracted consumers to video streaming apps was: "I know I'll always be able to find something to watch." (35%)
Likewise, when asked what factors influenced them to continue using a video streaming app, the size and availability of content were cited again and again.
- A larger library of movies. (54%)
- A larger library of classic TV shows and movies. (39%)
- New content that is refreshed at a faster rate. (38%)
Bottom line: the larger your content catalog, the better.
If, for example, you want to build a subscription-based app that attracts and retains viewers, you'll need to have a content library large enough to consistently supply them with something to watch. And, you'll need to produce or acquire new content regularly. If you don’t have that, then a different monetization model might work better for you.
If you plan on offering linear content on your app, how long can you play your content before you have to loop it? Viewers will quickly notice repetitive content and abandon your app unless it’s intended for background listening.
NOTE: If you determine that you don't have the content or resources to create a viable app, you can still use Amagi to deliver your content to other OTT platforms (including the most popular social platforms). Plus, Amagi can help you identify and connect with platforms that your content will perform well on.
The format of your content will also affect how you build your app and the tools you'll need. For example, if you want to support linear content in your app, you'll need a linear playout tool and scheduling tool that can create programming schedules, both of which increase the costs and complexity of managing your app.
Need a playout provider for your app? Amagi can handle video hosting and playout for live, linear, and video on demand content. Plus, you can also use Amagi to schedule playout, insert ads dynamically into your content, and more. Contact our team to learn more.
2) What are the distribution rights on your content?
In our experience, this is one of the most commonly overlooked questions.
If you're licensing content for your channel, can you distribute it everywhere as you please, or are there requirements attached to your distribution rights?
When you're licensing content from multiple sources with different distribution agreements, you end up with different pieces of content that have different restrictions on when and where they can be played (including mobile vs connected TV (CTV) devices). That can create a web of scheduling complexity that's difficult to navigate and requires more staff to manage (increased costs).
This can then lead to promotional and monetization challenges as well.
Imagine that you're limited exclusively to distribution in the U.K. for three of your most popular shows. You'll have to promote your app differently in the U.K. vs. elsewhere. Do you have other content that's popular enough to attract and retain subscribers outside the U.K.? Or, if you’re monetizing through ads and those three shows are your best ad revenue generators, will you be able to generate enough revenue outside the U.K.?
While navigating complex distribution rights doesn't eliminate your chances of creating a successful app, it's something you should consider ahead of time so you can optimize your distribution strategy.
Note: You can use Amagi to track distribution requirements automatically. We’ll make sure your schedules and playout conform to your licensing agreements, no matter how complex.
3) Which monetization method is best for your content catalog and target audience?
While there are several ways to monetize your app, the two most common methods are subscriptions and ad revenue. To maximize ROI, you need to determine the optimal monetization strategy for your app based on the type of content you'll offer and the size of your audience.
Niche content has the potential to generate more revenue from both subscription and ad monetization, depending upon the niche. You'll have an easier time convincing people to subscribe to your app if your content is in a niche they're really passionate about. For example, many lovers of classic anime are willing to pay the $4.99/month cost of RetroCrush, a streaming service devoted to vintage anime.
Or, you may have more success with ad monetization. If, for example, you have an app for fishing enthusiasts with content all about fishing, your audience will be more likely to buy fishing products. Companies that sell fishing products will perceive your app as a more lucrative advertising channel, and you can charge a higher CPM for their ads (especially if those ads generate conversions). You can even strike deals with companies that sell fishing products so you can sell their products in-app and earn affiliate revenue.
If your app contains varied content (such as Netflix or Hulu), then getting subscriptions and ad revenue may be harder. You'll have to give viewers a reason to choose your app over the many other options available and justify the subscription price, usually by:
- Having a content library large enough to convince viewers that your app is worthwhile (i.e. they'll always have something to watch).
- Having popular content (tv shows, movies, etc.) that they feel compelled to watch (and, ideally, can't watch anywhere else).
You can also take the route that many new app creators take: Offering a free version of your app with ads and charging a subscription for ad-free viewing. This may be a good place to start, as it enables you to gauge the potential of each revenue source. It's also a solid monetization method for apps with a smaller content library and audience (like RetroCrush).
4) How can you best reach your target audience?
Developing a clear picture of your audience and their content consumption behavior is at the heart of app development. You'll use this info to:
- Identify the platforms and devices your audience uses and that your content is best suited for so you can offer your app there.
- Use audience data, like geolocation, to optimize content distribution.
On what platforms (Android, iOS, Roku, Apple TV, Amazon Firestick, Vizio, and so forth) does your target audience consume content? This will determine which platforms and devices you should prioritize during app development.
Almost every platform has a unique set of requirements and will require its own dedicated developer (one of the largest expenses in app development) who specializes in that platform's operating system and framework. The more platforms you build on, the greater the expense.
Start by prioritizing the platforms that give you the greatest potential to reach your audience so you can minimize expense and maximize ROI. Later, you can expand to other profitable platforms as you see fit.
The type of content you offer can also affect the devices and platforms you build on. For example, short-form content generally performs better on smartphones, while long-form content performs better on connected TV.
Location is another important audience data point. Certain content performs better in certain locations than others (depending on the preferences of your audience in that region).
The locations you distribute your app to will also necessitate certain tech capabilities. In the U.S., for example, your content is legally required to include closed captions for people with disabilities. And in Europe (where many different languages are spoken), you'll need subtitles that match the languages of the different countries that receive your broadcast. If you know that your audience in a certain region has, on average, access to a great internet connection, then you might choose to deliver video content in higher quality resolution, high dynamic range (HDR), etc.
Because we've delivered content to thousands of apps, OTT platforms, and TV channels, Amagi customers can leverage our insight to optimize distribution and content scheduling decisions. We can help you identify the platforms that will enable you to reach your audience effectively and where your content will monetize best. For instance, according to the Amagi Global FAST report data, your documentaries library has better chances of performing in the EMEA and APAC region on CTV devices than other regions and devices.
Amagi can also support the caption and subtitle requirements of any market and uses speech-to-text software to dynamically generate captions for live TV and sports events.
What you'll need to build and launch your app
Once you've developed a clear picture of your app distribution and monetization strategy, you'll need to:
- Determine how you'll approach application development (hiring dedicated developers or an app development company).
- Acquire the tools you need for hosting your app, delivering your content, and completing other necessary tasks.
- Acquire the tools you need to monetize your app.
Platforms and developers
As we stated earlier, every app-distribution platform is unique. To properly build an app on any platform, you'll need expertise in the platform's programming language, SDK (Software Development Kit), API (Application Programming Interface), backend, and so on.
Unless you find an app development company that works with all of your desired platforms (more on that later), you'll probably have to hire a different developer for each platform you build your app on.
1) Dedicated developers
App development is a highly specialized skill. Developers are usually experts at just one to two platforms, and may even specialize in creating certain types of apps (e.g., live streaming app development, VOD app development, etc.). For each platform you plan to build on, you'll need to hire one developer with a proven track record of building apps on that platform.
Salary for a competent developer in the US is around $75K - $80K for a junior developer and up to $250K - $300K for a senior developer, though prices vary depending on location. Developers in California are more expensive than developers in Kansas, for example, due to cost of living differences.
2) App development company
App development companies will walk you through the entire app development process, from selecting platforms, to building your feature set, to launching your app. And instead of just one developer, you get the expertise of an entire development team at your disposal.
Like individual developers, some app development companies only build apps on certain platforms. So you should find a company that has a proven track record of building the types of apps that you want (for example, live video streaming app development, mobile app development, etc.) on your chosen platforms.
If you work with a company that can build your app on all the platforms you want, then it'll probably cost less than hiring a single developer for each platform.
3) App development software
Alternatively, there are turnkey app development tools, like Builder.ai, you can use to build your app. App development software is popular with startups and companies with fewer resources, as they offer:
- Easy-to-use interfaces that enable you to build apps without using any code.
- App-hosting and scalability (so you only pay for the cloud resources you use).
- Specialists to help you design your app.
- SaaS based pricing models (operational expenditure vs capital expenditure).
Apps built with app development tools will satisfy most business needs but often restrict you to limited (or templated) user experiences or do not support the full spectrum of functionality that will help promote your content (universal search, for example). If you want more advanced or specific features and functionality, you'll need to work with an app developer or development team.
You'll also need to research the app development tools that can create the type of applications you want (e.g., mobile applications, live streaming applications, etc.), for the platforms you want to deliver to (i.e. can build apps using the programming language of your desired platforms), and can create the app features that matter to you (e.g., push notifications, payment processing, etc.). In the end, you may need to use multiple tools to build and host your apps on various platforms, which increases the total cost of ownership.
While many app features and capabilities can be programmed into the app during development, some will require you to use other tools.
The following is a list of tools you'll need for the most basic online video streaming app capabilities:
1) App hosting
Unless you want to host your app on your own servers or cloud-based infrastructure (which is very expensive), you'll need to use an app hosting provider.
There are many app hosting providers you can use, like AWS (Amazon Web Services) or GCP (Google Cloud Portal). Some are less expensive than others. But with reduced costs usually comes reduced performance, uptime, security, etc.
You should choose an app host and hosting plan that fits your budget and needs. Consider how many people will be using your app, how much processing power your app will need, etc.
2) Content storage & delivery
You'll need tools for storing and delivering your app content. Many smaller content owners use cheap or free video streaming solutions for storage and delivery to save on costs. But if you want to deliver high-quality content in your app, we recommend you invest wisely here.
While many problems can arise from cheap storage/delivery tools, one of the biggest is slow content delivery speed. When a viewer plays your content, the content needs to be retrieved from a server. The farther away the server is from the viewer, the longer it will take to retrieve and play — which can create loading/buffering issues, harm the viewing experience, and result in viewer attrition.
Good content storage and delivery tools use CDNs (content delivery networks) to ensure that viewers can retrieve your content from a server that's close to them. For example, Amagi has a global network of CDNs across 40+ countries, ensuring optimal content delivery wherever your viewer is.
And rather than using separate tools for storage and delivery (which increases the complexity of your operation), Amagi CLOUDPORT manages your content library, including cloud storage, and delivers content to your app in addition to any other OTT platform, cable channel, or vMVPD you want to deliver to. That way, you can manage storage and delivery for your entire content distribution operation from a single platform.
3) Linear/live playout and scheduling
Many app creators want to create apps that include VOD content, linear content, and live content.
If you plan on delivering linear content on your app, you'll need tools for handling linear playout and creating content schedules weeks in advance. Many playout software providers don't include content scheduling tools, forcing you to buy and manage two separate tools for your linear channels. But Amagi's linear scheduling tool (PLANNER) integrates easily into our linear cloud playout tool (CLOUDPORT), so you can easily manage both operations in one place (as well as for any other platform you deliver linear content to).
If you want to broadcast live content on your app, you'll need a playout tool that handles live broadcasting. When evaluating live playout tools, you should consider issues such as:
- Video quality: Can the tool stream live video at your desired quality level (SD, HD, 4K, etc.)?
- Latency: Latency is the delay between when your live video is captured and when it reaches your viewers’ screen. You may require low latency for content like live sports and news broadcasts.
- Graphics: Many playout tools don't include native graphics capabilities. If you want to insert graphics into your live content (like promos for your social networks, countdown timers, ‘Up Next’ banners, etc.), you'll need to buy and manage a separate graphics tool.
Amagi LIVE is a UHD-ready, cloud-based, live orchestration platform you can use to produce broadcast-grade live channels in your app. It includes native graphics capabilities and can be used to manage a single live channel or multiple live channels with different ads and graphics playlists. It reduces costs by managing your entire live content orchestration in one location and reducing the need for multiple live operators for events. And if you only want to stream a limited number of hours of live content, you have the flexibility to bring up the cloud resources only for those specific hours — which increases operation efficiencies.
4) Subtitles and closed captions
As stated earlier, there are regional requirements regarding subtitles and captions that you'll need to comply with. You'll need a tool for inserting subtitles and closed captions into your content.
Amagi can not only handle your subtitle and closed caption needs, but — since we have experience delivering content in many regions across the world — we can ensure your content complies with regional requirements.
You'll need tools to handle your chosen monetization method(s).
If you monetize your content with ads, you'll want an SSAI tool that stitches ads into your content stream. You'll also need to work with an ad network that your SSAI platform will source ads from.
Amagi THUNDERSTORM is an SSDAI (server-side dynamic ad insertion) platform that can be used to insert hyper-relevant ads into your content. It can be personalized based on:
- Content type: Ads that match the type of content the viewer is watching ( e.g., ads for cooking products on a cooking show).
- Content genre: Ads that match the content genre (e.g., family-oriented ads, such as toy ads, on family-oriented content).
- Viewer location: Ads that are relevant to a specific location (e.g., a local real estate agency).
- Targeted ad-decisioning: If you notice ads for a certain product perform well in a certain location or with a certain audience segment, you can send more ads for that product to those locations/people.
- Cutting-edge ad tactics: Some Amagi customers can test newer advertising capabilities, like nonlinear and interactive ads.
Further Reading: Boost ad revenue with dynamic ad insertion for linear tv
The more relevant your ads, the more conversions they'll get. When ads perform better on your content, you can charge advertisers more for impressions and increase ad revenue.
If you choose to create a subscription-based app, you'll need to either manage it yourself or license subscriber managment software.
If you manage subscription monetization yourself, you'll need your developer to create the infrastructure for your paywall in your app and manage PCI compliance, data protection, payment workflows and processing, transaction fees, etc.
- It may be easier to just work with a subscriber and billing management tools, like Recurly (used by Sling), Cleeng, MPP Global, Evergent, and more. These tools can create secure, compliant paywalls and manage payment processes for you.
Choosing app features that actually matter
Many content owners take a flawed approach to choosing the best features for their video streaming application. They see app features as more of a branding opportunity and develop complex user experiences in order to differentiate themselves and engage their audience (like having a video thumbnail spin or pop when the viewer hovers over it).
The problem is that those bespoke development efforts may look "cool", but they're expensive, and they don't have a significant impact on ROI. Arbitrary features aren't going to convince viewers to choose your app over a competitor’s app.
Rather than shelling out extra money for special features that don't move the needle, focus on app features that enhance the viewing experience by:
- Understanding how your audience consumes your content.
- Creating features that facilitate their consumption habits.
While the features you choose will be determined by your audience, here are a few things to keep in mind:
Focus on the basics first
Start by focusing on the basic ways that people consume content on video streaming apps to create an app that provides the fundamentals of a good viewing experience.
Some basic viewing experience features include being able to:
- Create a playlist.
- Mark their favorites.
- Perform searches that return the results they want.
- Browse by category.
- View VOD content offline.
- Have continuity among devices. (i.e. If someone subscribes to your app, they should be able to use it on all available devices without having to buy separate subscriptions. And if they start streaming content on their connected TV and switch to a mobile device, they should be able to pick up where they left off.)
Use viewer data to inform feature decisions
After your app is launched, you can collect data about how your audience consumes content on your app and use it to inform feature decisions.
Netflix provides a good case study in this regard. After learning that many of their users spend lots of time searching for content on their platform, Netflix created the "Play Something" button that automatically picks something for viewers to watch based on their viewing history.
So if you're going to add special features to your app, they should be informed by viewer consumption habits and aimed at improving the viewer experience.
Minimize discovery time
In the PWC survey we mentioned earlier, consumers stated that always being able to find something to watch was one of the most important factors that attracted them to video streaming apps. To satisfy viewers in that regard, video streaming services not only need to offer lots of content, you'll also need to make it easier for them to find content they enjoy.
Based on your audience and content catalog, you might consider adding features aimed at providing targeted content suggestions to viewers, like:
- Recently added content.
- Popular or trending content.
- Suggestions based on other content the viewer watched.
- "Your friends are watching" (requires you to connect to viewers' social media profiles).
Use Amagi to give your app the edge it needs to succeed
While we're not an app development company, Amagi's suite of tools can help your app succeed in several crucial ways:
Amagi is one of the oldest content delivery platforms in the game, and we are the global leader in FAST solutions with the largest distribution network in the space. Because of our extensive experience helping clients deliver content to their apps and other platforms, we've collected massive amounts of data and insight into how content is consumed, who consumes what kinds of content, viewership and ad metrics, and more.
You can leverage Amagi's data and insight to:
- Identify the best platforms and devices to distribute your app on.
- Build a distribution and monetization strategy that generates enough revenue to offset the cost of your app and turn a profit.
- Identify geographical areas where your content will monetize best.
- Create content scheduling decisions (for linear playout) that enhance the viewing experience for every viewer and minimize churn.
Reduce costs and complexity
Amagi provides a unified location for handling many of the functions your app will need, enabling you to minimize the costs and complexity of managing your app:
- Use Amagi CLOUDPORT and Amagi ON-DEMAND to ingest and deliver live, linear, and VOD content to your app (as well as any other platforms you deliver to).
- Use Amagi PLANNER to create linear content schedules that integrate directly with CLOUDPORT for easy playout.
- Use Amagi THUNDERSTORM to insert personalized, server-side ads.
- Use Amagi to perform other capabilities you may need, like graphics, subtitles, and closed captions insertion.
Amagi helps you increase app revenue by reducing costs and…
- Delivering targeted ads: Amagi THUNDERSTORM offers SSDAI that can be used to deliver ads that are targeted to each viewer (location, demographics, etc.) and each piece of content (type, genre, ad decisioning, etc.) in order to maximize ad revenue.
- Optimizing your ad strategy: With THUNDERSTORM analytics, you get access to real-time ad metrics you can use to optimize ad performance
Want to power your video streaming app with Amagi? Contact our team today