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Profiting from social media

Sunday, December 6, 2015

When Paula Drakes created a YouTube channel three years ago and started posting videos about how to crochet baby hats and socks, she never imagined that this would one day evolve into a viable business. 

Drakes had inherited her love of crocheting from her grandmother who was renowned for the quality of her handmade products and unique designs. She started posting videos on YouTube as a way to share this dying craft with a wider audience in the hopes that others might be attracted to a hobby that she was passionate about. 

The fact that she was now getting paid to post videos about something she loved doing was just icing on the cake as far as she was concerned. Achieving a personal milestone of attracting 1,000,000 viewers to her videos had planted the idea that she could turn her hobby into a career. 

An article she had read about other entrepreneurs who earned millions of dollars annually from their YouTube channels inspired her to seriously consider quitting her job and focusing on making home videos. 

The main question in her mind, however, was: did she have what it takes to become a YouTube star? 

Entrepreneur profile and background

Drakes grew up never knowing her father since her parents divorced when she was two years old and he migrated to Canada. Most of her childhood was spent living at her grandmother’s house while her mother worked to support her and her three siblings. This is where she had developed her lifelong interest in crochet. 

After graduating with an undergraduate degree in management, she got a job as a sales agent at a large furniture retailer and also started a small business selling scented candles. She had started this business as a way to supplement her income and enjoyed modest sales over the first year of operations. She recently decided, however, to close this business after she realised that the income she was earning did not compensate her adequately for the effort she was putting into getting the business off the ground.

She had never abandoned her love of crocheting and, while browsing through YouTube videos for ideas on some new techniques she wanted to try for a baby hat she was working on, she realised that the videos currently available were relatively poor in quality and provided limited information. This inspired her to produce her own instructional videos. 

What made Drakes’ videos stand out was the high quality of the camera work and the detailed instructions that she provided for every step of the process. She also starred in each video and tried to portray a fun enjoyable experience while working on each project.

She posted her first video to YouTube in May 2012 and initially uploaded at least three videos a month lasting between three to four minutes each. 

As she became more skilled at videography she started posting a new video every week. She promoted the video by providing a link on blog sites where she contributed comments and sharing it on craft Web sites that she visited. She also asked her friends and relatives to watch her video and share it with their friends on other social media sites such as Facebook. 

The videos also featured prominently on Drakes’ personal Facebook page.

Business opportunity 

The response to the videos was very enthusiastic and she quickly began attracting a loyal following with many visitors commenting on the video quality. 

While she had originally started posting videos with the intention of helping people interested in crocheting, she quickly realised that there was an opportunity to earn money from the audience she was attracting. This led her to join YouTube’s Partner programme which allowed YouTube to embed ads in her video and compensate her each time someone subscribed to her channel or viewed one of her videos. 

She earned roughly 45 per cent of the revenue generated by ads embedded in a video, which on average meant about $5 per 1000 views. 

Becoming a YouTube Partner not only allowed Drakes to generate income from her videos but she also gained access to a set of tools that provided her with the ability to track her audience and manage the performance of her videos.

One of the hallmarks of her channel was the close interaction she had with her audience. She responded to many of the comments posted about her videos and occasionally developed and posted videos related to viewer comments and questions. 

She also made it easy for visitors to find her videos by using descriptive names and tagging her videos with popular keywords.

Future plans

Drakes was excited by the opportunity to convert her YouTube channel into a full-time career opportunity but recognised that to do so she would have to attract a wider audience. She was also unsure about how many consumers would be willing to pay for the content she provided given the abundance of free videos, albeit of lower quality, available on the Web. She had identified three opportunities for future growth.

1. Start producing videos about other arts and crafts and upload those on her existing channel. She estimated that at least 30 per cent of her current audience would be interested in videos showing how to create tie-dye jerseys and jewelry at home. The challenge with this approach was there were many channels already devoted to these types of crafts and she worried that not enough viewers would be willing to switch to her channel to make it profitable.

2. Open a physical retail store where viewers of her videos could purchase products that she demonstrated making. This would further establish her brand credibility which she had established online and supplement her income. She knew, however, that in order to cater to her worldwide audience she would have to facilitate online sales and she was uncertain whether she would have the time needed to manage the store and continue creating the volume of videos that were needed to maintain her YouTube viewership.

3. Provide workshops and individual training to viewers who saw her video but wanted a more hands-on experience in crocheting. Several viewers had, in fact, contacted her requesting such training but she had declined since she felt that the volume of clients in the local market was too low to justify such a venture. She was also concerned about visiting people in their homes given the current crime situation in the country.

While Drakes was pleased about the large number of individuals who had viewed her videos and subscribed to her channel (she currently had 5,000 subscribers) she was unclear about how best to monetise her online presence. 

She was confident, however, that with the right strategy, the videos she created could provide a financially rewarding business opportunity.

Discussion questions

1. What factors have contributed to Paula Drakes’ success?

2. What strategy should she pursue in order to grow the business?

Dr Barney Pacheco is a lecturer in the Department of Management Studies at The University of the West Indies, St Augustine.


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