Quantitative Literacy And Strategic Analysis Of A YouTube Channel

The purpose of Assessment Task 2 is to have students undertake a strategic analysis that demonstrates quantitative literacy. Quantitative literacy is a required Graduate Capability for this subject.
Quantitative literacy will be assessed within the following sub-tasks:
1)  Creation of a numeric dataset;
2)  Interpretation of that numeric dataset;
3)  Creating a synthetic model using a known dataset as a base;
4)  A discussion of the strategic relationships between the channel of choice, Patreon, and PayPal..   
The quantitative literacy Assessment Task requires at least five (5) in-text references from peer-reviewed academic journals to demonstrate engagement with the body of knowledge.
General rules:
1)     Engagement with the Body of Knowledge: No academic journal article may be referenced more than twice;
2)     There must be at least five (5) academic journals referenced in the text of the submission;
3)     The subject text book must be referenced at least once.
 
The Framework:
It is proposed students engage with YouTube as the initial medium for the acquisition of the numeric dataset for this study. Students should assume they are in the role of a strategic advisor for a client seeking to create a revenue generating activity using YouTube. In this case, students should assume their examiner is their client.
Method:
Students should select a YouTube channel for investigation and then model the potential revenues for that channel based on user views. The channel of choice should have linkages with Patreon, PayPal and any other revenue medium, or service (or vector).
1)     Students should synthetically model the revenues of the channel-of-choice and consider strategic relationships between the channel of choice, Patreon and PayPal.
 
1.Diagrams and tables will be essential for this item.
 
2)     Students should assume their examiner is NOT an accountant or a data-analyst and must provide written explanations for each table and model.
Task Response Structure
You are to provide in approximately 1500 words (+/- 10%):
1)               An introduction and background to the synthetic study inclusive of a table numerically demonstrating the value of the channel;
2)               A diagrammatic representation, tables, written interpretation and explanation synthetically modelling the gross revenues of the channel-of-choice with consideration for strategic relationships between Patreon, and PayPal.
3) A discussion of the strategic relationships between the channel of choice, Patreon, and PayPal.
4)              Conclusion and a bibliography for references used;
 

Quantitative literacy is the ability to understand, predict and control routine events in people’s lives using mathematical concepts and skills (Karaali, Villafane, Hernandez and Taylor, 2016, p.2). This paper seeks to employ quantitative literacy in analyzing the economic relevance of investing in a YouTube channel. This study explores the Extra Credits YouTube channel that takes historical snapshots and presents them as animated shorts which are made available for everyone to watch on YouTube. The channel was created in September 2008. Extra Credits is a channel that is linked to Patreon where patriotic viewers can support the channel by depositing contributions to encourage continued production. The channel’s first production, Extra History series, the channel got 600,000 views in a month’s time. Extra Credits has made acknowledgments that Patreon empowered them to make productions comfortably. Their link with the channel has assisted them in getting funds for outsourcing resources and leveraging better videos. The channel is managed by 12 employees who include 8 animators, 2 hosts, a writer, and a media director. By September 2018, the channel had a total of 4,113 patrons. The channel has 1.6 million subscribers, 391 videos and 18,766,345 views.  According to Extra Credits, the average monthly earning of the channel through Patreon is $13, 827. Table 1 records the value of Extra History.

Table 1: The Value of Extra Credits

Asset	Quantity
Videos	391
Employees	12
Patrons	4,113
Subscribers	1,600,000
Views	18,766,345

From Table 1: it can be deduced that Extra Credits has four types of assets including Videos, Patrons, Employees, Subscribers and Views. These assets correlate in running the channel as a business. The 12 employees are strategic assets comprising of 8 animators, 2 hosts, a writer and a media director. The videos as assets are useful as the centre of viewer attraction. The videos are classified into series that attract viewers from different educational faculties. Patrons are a valued asset of the channel as they are responsible for contributing to the video production. The channel subscribers improve the popularity and rating of the channel by YouTube. Having subscribers totalling to 1.6 million makes the channel get a Cost Per View of $ 0.050 which increases the revenue of the channel on advertisement.

According to Dey,(2018), gross revenue is the cumulative total of the sales which are recognized at the reporting period before any deductions are made. The gross revenue usually indicates the business’ ability to make sales but not profit. Extra credits earns revenue from Patreon contributions and YouTube advertisement. It earns revenue From YouTube by playing preview advertisement before the channel's videos.  YouTube makes payments to the channel per advertisement viewed. The channel has also cited a link to its Patreon page where viewers interested in the channel's content and are willing to give financial support can make cash transfer transactions.

Table 2: YouTube Advertisement Cost per View

Age Range	Cost per View	View rate
18 - 24	$ 0.042	27.0 %
25 - 34	$ 0.046	27.1 %
35 - 44	$ 0.046	27.3 %
45 - 54	$ 0.050	28.8 %
55 - 64	$ 0.051	30.0 %
65 +	$ 0.049	28.8 %
Unknown	$ 0.034	29.5 %

  Table 2 displays a dataset for the age groups that are targeted by a video channel, the amount a vlogger is paid per view and the view rate. From the table, keynotes on channel videos can be deduced from the target age range. The targeted age range is seen to affect the cost per view and the view rate where the 55 – 64 age range has the highest view rate of 30.0 % and the highest cost per view of $ 0.051. It is also notable that a channel with videos that target an unknown age range will have a relatively good view rate of 29.5 % but its cost per view will be lowest at $ 0.034. This dataset can be used strategically to maximize the revenue gotten from YouTube advertisements. A good strategic plan ensures a concrete broad customer base is established for a ready market, reliability, consumer trust, and customer loyalty (Bricci, Fragata, and Antunes, 2016, pp.175). A strategic plan to ensure a channel maximizes its revenue from YouTube ads would involve leveraging videos that spanned a wide age range – since the age range determines the cost per view and view rate, a wide age range would increase the rates of viewing that which would increase revenue.

The revenue model for Extra Credits YouTube channel. The channel offers videos on the YouTube platform that attract viewers. The videos offered are educative videos addressing History and video gaming. The company has since released video series in many education faculties including Extra History – a series with 190 videos that teach on the American, European, Asian and African history, and Extra Sci-Fi – a series with 87 videos that educate on software development. Strategically, these videos attract viewers from all age ranges hence increasing the view rate of the channel. A high view rate rises the views thus increasing the revenue paid to the channel by YouTube.

Extra Credits utilizes Paypal and Patreon services for supporter contributions. Extra Credits has lured its viewers and subscribers to join its Patreon team and generously offer monetary contributions to support the production of video content for the channel. Paypal and Patreon are quick and safe ways for money transactions. Both money transfer systems can be connected with bank accounts. This significantly reduces the turnaround time making the contribution transactions as patrons can make transactions without affecting their schedules. Extra Credits utilizes the Patreon’s platform resources to communicate with its supporters while giving supporters chance to vote for the topic of interest.

Extra Credits utilizes online services to generate revenue. In the strategic planning of the channel, it has ensured that the companies it transacts with also offer their services online. Patreon allows supporters of YouTube channels to make contributions online while Paypal is a worldwide online money transfer network. Dependent businesses operating in the same environment present the omnipresent aspects of the setting to the customers (Bah and Fang, 2015, p.165). The patrons of Extra Credits can find everything they need on the same browser device. The choice to associate with PayPal and Patreon is advantageous to both Extra Credits and its customers. The channel benefits as potential contributors make imperative payments conveniently. The channel benefits from a worldwide contribution span since Paypal and Patreon are global platforms. These platforms help Extra Credits manage its account from a centralized point. Cybersecurity is another benefit that the channel benefits from these platforms. Online money transfer platforms have invested heavily in cybersecurity and have a dependable shield against cyber-attacks. An association between the channel and these platforms would provide grand transactional security for the channel's funds.

Patreon is a platform that began with the aim of supporting vloggers on YouTube. The strategic step to associate the channel with Patreon opened extra opportunities for financial support. The channel has obtained 4,113 patrons and boasts of earning $13, 827 per month from Patreon. Patreon has empowered the channel and made the production of new video series possible and affordable. Patreon also proves to be fantastic to work with as they are open to customer feedback. Patreon gives support to their customers and takes feedback positively and regularly update their software. It is possible to negotiate a better rate with Patreon’s payment processors where the savings shall be passed along. Customer support ensures satisfaction and full exploitation of the potential of a product (McLean and Wilson, 2016, p. 605).  As a source of revenue to the channel, Patreon gives payouts to Extra Credits. Patreon system records all pledges offered by patrons and disburses them to the channel every end of the month. The automated pledge collection is a state of the art advantage which makes the platform dependable.

Patreon is a growing community. There is an average of 50 new projects launched on Patreon daily. This shows that the discoverability of the platform is on the rise. A popular platform will be advantageous to the channel as marketing benefits will arise and a high number of Patrons will be an advantage to the channel.

In conclusion, investing in a YouTube channel is a viable venture. One should consider a wide age range as the audience to the channel’s videos since it increases the view rate. To increase the revenue of a YouTube channel, it is important to associate the channel with helper platforms like Patreon and Paypal which give subscribers an opportunity to support the vlog.

Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in Africa. Journal of Development Economics, 114, pp.159-171.

Bricci, L., Fragata, A. and Antunes, J., 2016. The Effects of Trust, Commitment and Satisfaction on Customer Loyalty in the distribution sector. Journal of Economics, Business, and Management, 4(2), pp.173-177.

Dey, S., 2018. Predicting Gross Movie Revenue. arXiv preprint arXiv:1804.03565.

Karaali, G., Villafane Hernandez, E.H. and Taylor, J.A., 2016. What's in a name? A critical review of definitions of quantitative literacy, numeracy, and quantitative reasoning. Numeracy, 9(1), p.2.

McLean, G. and Wilson, A., 2016. Evolving the online customer experience… is there a role for online customer support?. Computers in Human Behavior, 60, pp.602-610.