Starting a streaming service can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful streaming service.
Importantly, a critical step in starting a streaming service is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Streaming Service:
- Choose the Name for Your Streaming Service
- Develop Your Streaming Service Business Plan
- Choose the Legal Structure for Your Streaming Service
- Secure Startup Funding for Your Streaming Service (If Needed)
- Secure a Location for Your Business
- Register Your Streaming Service with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Streaming Service
- Buy or Lease the Right Streaming Service Equipment
- Develop Your Streaming Service Marketing Materials
- Purchase and Setup the Software Needed to Run Your Streaming Service
- Open for Business
1. Choose the Name for Your Streaming Service
The first step to starting a streaming service is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your video streaming service:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your streaming service.
2. Develop Your Streaming Service Business Plan
One of the most important steps in starting a video streaming service is to develop your business plan. The process of creating your plan ensures that you fully understand your video streaming market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your streaming service.
- Company Overview – this section tells the reader about the history of your streaming service and what type of streaming service you operate. For example, are you a music streaming, video streaming, or a live streaming service?
- Industry Analysis – here you will document key information about the video streaming industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your streaming service? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your own video streaming service make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Streaming Service
Next you need to choose a legal structure for your video streaming app and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the streaming service and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a streaming service together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a video streaming service include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a streaming service is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your video streaming service, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Streaming Service (If Needed)
In developing your streaming service business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a streaming service to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a streaming service that they believe has high potential for growth.
5. Secure a Location for Your Business
There are a few things you’ll want to take into account when choosing a location for your streaming service. You’ll need to consider the bandwidth required to support all of your users. Additionally, you’ll need to make sure that your chosen location has good internet connectivity. Finally, you’ll need to think about the cost of setting up and running your streaming service in that location.
6. Register Your Streaming Service with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your streaming service’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your streaming service to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits that are required to start a streaming service vary from state to state. In general, you will need a business license, a sales tax permit, and a tax identification number. You may also need other licenses and permits depending on the type of streaming service that you plan to offer.
10. Get Business Insurance for Your Streaming Service
The type of insurance you need to operate a streaming service depends on the scope of your operation.
Some business insurance policies you should consider for your streaming service include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Streaming Service Equipment
To start a video streaming business, you’ll need some basic equipment. You’ll need a computer to run the streaming software, as well as a microphone and webcam if you plan on doing any live streaming.
12. Develop Your Streaming Service Marketing Materials
Marketing materials will be required to attract and retain customers to your streaming service.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your video streaming service. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional video streaming website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your video streaming website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your own streaming service.
13. Purchase and Setup the Software Needed to Run Your Streaming Service
To run a streaming service business, you need software that can manage and monitor your streaming servers. You’ll also need software to encode and transcode your video content, and to create and manage your playlists. Additionally, you’ll need tools to help you analyze your streaming data and optimize your service. There are a number of software packages that can meet these needs, so it’s important to choose the one that best suits your business.
14. Open for Business
You are now ready to open your streaming service. If you followed the steps above, you should be in a great position to build a successful business and know everything you need to about how to start your own streaming service. Below are answers to frequently asked questions that might further help you with how to create a streaming service.
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How to Start a Streaming Service FAQs
Is it hard to start a streaming service?
No, it is not too hard to start a streaming service because there are many solutions available online that allow you to create your own streaming service like Netflix. White label services make it easy to set up and manage your streaming service, and they provide all the features you need to get started. Plus, they offer a variety of templates and themes that you can use to create a custom streaming service that fits your brand and style.
How can I start a streaming service with no experience?
If you're looking to start a streaming service but don't have any experience, there are a few things you can do. First, you can research the industry and learn as much as you can about it. You can also look for online courses or tutorials that can teach you the basics of streaming services. Finally, you can reach out to professionals from other streaming service providers for advice and guidance.
What type of streaming service is most profitable?
The most profitable video streaming platform is likely one that offers a wide variety of content, including recently released films, older films, and television shows. This type of business attracts both casual viewers and more dedicated fans, who are willing to pay for access to a large selection of programming.
How much does it cost to start a streaming service?
It can cost up to $1,000 to start a streaming service, depending on the features and quality you want. You'll also need to factor in the costs of marketing and advertising your new service.
What are the ongoing expenses for a streaming service?
The ongoing expenses for a streaming service can include costs for licensing, bandwidth, and customer service. For larger video streaming services, the costs for marketing and content acquisition can also be significant.
How does a streaming service make money?
Video streaming services make money by charging a subscription fee on their video streaming apps or movie streaming website. This allows them to maintain a library of content. In addition, companies may also sell advertising space on their platforms. Another way a streaming service can make money is by offering content on a pay-per-view basis. This allows users to purchase or rent individual titles rather than paying for a subscription. Finally, some streaming services generate revenue through partnerships with other companies, such as cable providers. By teaming up with these companies, the streaming platform can offer its content to a wider audience.
Is owning a streaming service profitable?
Owning a streaming service can be profitable because it may be accessed by a large number of people at any given time. This allows more people to be exposed to the service, which in turn can lead to more subscribers and revenue. Additionally, owning a streaming service with in demand content can help build brand awareness and loyalty, which can further increase profits.
Why do streaming services fail?
There are many reasons why streaming services can fail. One reason is that the companies that own the streaming services may not be able to keep up with the increasing demand for their service. Some streaming companies may also not have enough money to pay for the licenses to stream certain TV shows and movies. Lastly, sometimes there are problems with the technology that supports the streaming service, resulting in a poor experience for end users.