6212020EQ0014_SOW_FINAL.pdf

SBAHQ-16-Q-0068

Data Collection Investigating the Impacts of New Technologies in Small Business

Statement of Work

Type of contract: The government anticipates awarding a firm-fixed price type award.

Location of Work: To be completed by the contractor off-site (not at SBA headquarters) Period of Performance: Not more than one year from the award date Clearance Required: None

1. Introduction The U.S. Small Business Administration’s Office of Advocacy examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues. For more information on the Office of Advocacy, including past research projects, visit http://www.sba.gov/advocacy/847

2. Purpose The Office of Advocacy is commissioning a data collection to investigate the impact of media sharing technologies on existing and emerging small businesses. The overarching objective is to a provide dataset to the Office of Advocacy which identifies the role of media sharing platforms in small business growth.

3. Background

3.1 Economic Relevance

May 5th, 2016 YouTube CEO Susan Wojcicki declared:

On mobile alone YouTube now reaches more 18-to-49-year-olds than any network — broadcast or cable. In fact, we reach more 18-to-49-year-olds during prime time than the top 10 TV shows combined.

In addition to attracting large audiences, YouTube serves small businesses. Nine percent of small and medium-sized firms report using YouTube to promote their businesses according to a 2015 poll commissioned by American Express1. While a small proportion of these businesses, such as specialty chefs and cosmetic surgeons, directly promote their services through informational videos, the majority pay for advertising space alongside entertainment shared on YouTube.

1 Polling performed by Ebiquity. See link for details.

http://www.sba.gov/advocacy/847 http://www.emarketer.com/Article.aspx?R=1012348 http://www.emarketer.com/Article.aspx?R=1012348

Beyond providing venues for business promotion, media sharing platforms enable the emergence of new small businesses in media industries. Previously, traditional media’s high costs of production, dissemination, and monetization presented insurmountable barriers to small businesses. Sharing platforms dramatically reduce these costs, creating opportunities for small businesses to compete directly for ad revenue. These new entrants represent a rapidly expanding share of the $92 billion Motion Picture and Sound Recording industries. 2,3 Indeed, YouTube alone generates $9 billion in ad revenue and pays out over $5 billion to content creators annually.4

3.2 Objectives

3.2.1 Two Analyses

The commissioned dataset will consist of two parts. The first part will provide statistics on YouTube Channels. The second will provide statistics on iTunes Podcasts.

3.2.2 Business Classifications

The Internal Revenue Service (IRS) uses nine principles to distinguish business income from hobby income for tax assessment purposes. Entities do not always want to be considered businesses. To provide a uniform basis for identifying non-business entities, small businesses, and large businesses within the universe of YouTube channels and iTunes podcasts, the researcher must incorporate the following guidelines, based on IRS Title 26 of the U.S. Code § 183(d) and the US Census Bureau’s definition of non-employer businesses

i. YouTube channels or iTunes podcasts earning imputed revenue greater than $1,000 for at least three, not necessarily consecutive, years shall be defined as businesses. 5,6 All others shall be treated as non-businesses.

ii. Roughly 8,000 large content producers, including many major network broadcasters, movie studios, and record labels, use YouTube’s Content ID Services to ensure control over their content. These entities shall be provisionally termed large businesses among the universe of identified businesses. To avoid misclassification of very successful small businesses that employ YouTube’s Content ID Services, entities generating more than $1 million in ad revenue shall be manually classified as small and large based on channel

2 According to the Statistics of U.S. Businesses’ (SUSB) most recent data. See SUSB’s Historical Data Tables by Enterprise Size – 2012.

3 NAICS code 512 4 According to Ken Sena at Evercore ISI investment bank and as reported by The Motley Fool and Music Business Worldwide.

5 The three years distinction is based on Title 26 of the U.S. Code § 183(d). The $1000 revenue guideline is based Census Bureau’s definition of non-employer businesses which states that non-employers are businesses that have no paid employment or payroll, are subject to federal income taxes, and have receipts of $1,000 or more ($1 or more for the Construction sector).

6 YouTube channels do not produce ad revenue automatically. Each channel must complete an exhaustive AdSense registration process by providing address, biographical, and banking information for verification by traditional mail.

It is substantially more difficult for podcasts to earn advertising revenue since no automated systems exist. Each podcaster must negotiate with a handful of specialty podcast advertising firms.

https://www.law.cornell.edu/uscode/text/26/183 https://www.law.cornell.edu/uscode/text/26/183 https://www.census.gov/epcd/nonemployer/view/define.html https://www.census.gov/econ/susb/data/susb2012.html https://www.census.gov/econ/susb/data/susb2012.html http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table http://www.fool.com/investing/general/2016/01/01/youtube-spends-more-than-netflix.aspx http://www.musicbusinessworldwide.com/youtube-will-earn-9bn-in-revenue-this-year-towering-over-spotify/ http://www.musicbusinessworldwide.com/youtube-will-earn-9bn-in-revenue-this-year-towering-over-spotify/ https://www.law.cornell.edu/uscode/text/26/183 https://www.census.gov/epcd/nonemployer/view/define.html content (e.g. Does content employ professional post-production, large cast of actors, etc.?)

iii. Businesses not identified as large businesses shall be considered small businesses unless otherwise noted by the researcher.7

3.3 Value of Research to External Entities

The data collection will serve as a benchmark for understanding the role of small businesses in media sharing. Stories like that of YouTube video-gamer, Felix Kjellberg, reported to have generated $7.4 million in YouTube ad revenue from playing video games with commentary in 20148, are fascinating but they provide a poor basis for assessing the economic impact of these platforms. Nevertheless, popular anecdotes provide the basis for most accounts in both the mainstream press and in academic research. No thorough database detailing the economic evolution of user-generated media exists, thus the proposed research will fill this vacuum while answering many questions including:

• How many and what proportion of YouTube channels and podcasts generate significant revenue? How has this changed over time?

• How does shared media compare to traditional media in terms of ad prices, revenue, viewership, and listenership? How has this changed over time?

• Large organizations such as the BBC and VEVO make a great deal of content available on these new platforms. What share of overall revenue can be attributed to these large, or otherwise traditional, producers of entertainment? How has this changed over time?

Was the growth of small business content generators stymied by the relatively recent YouTube utilization by large organizations?

3.4 Data Sources and Omissions

3.4.1 Data Sources

Collecting accurate and complete data is paramount. Given that these goals are met, the researcher is encouraged to compile the dataset in the fashion they deem most efficient. Three potential approaches include:

• Direct scouring of YouTube’s various application programming interfaces (API). YouTube offers several data interfaces at https://developers.google.com/youtube/v3/.

• Inquiring private firms that compile historical YouTube channel data. Among others, examples include http://VidStatsX.com, http://socialblade.com, http://socialbackers.com, and http://reelseo.com.

• Consulting marketing firms such as http://midroll.com, http://blogtalkradio.com, and http://advertisecast.com compile relevant statistics and inform ad pricing based on viewership, listenership, market share, and other economic measures.

3.4.2 Omissions

7 For example the channel of a large company, like HBO, should naturally be reclassified as large regardless of their Content ID Services.

8 See Fusion , 2015.

https://developers.google.com/youtube/v3/ http://vidstatsx.com/ http://socialblade.com/ http://socialbackers.com/ http://reelseo.com/ http://midroll.com/ http://blogtalkradio.com/ http://advertisecast.com/ http://fusion.net/story/162140/a-swedish-youtube-star-made-7-4-million-last-year-by-playing-video-games/

The variables, described in detail in the Components of Finished Research (4.6), include several time series spanning 10 years. Any omissions or limitations of the data must be thoroughly documented in the Variable Definitions Section (described in 4.6.1).

4. Scope

4.1 Additional terms. Any additional terms must be submitted with the proposal. No additional terms or agreements will be considered following award.

4.2 The research contract will incorporate the contractor’s complete research proposal, the complete

Statement of Work (SOW), and additional documents.

4.3 This is a nonpersonal services contract to provide services as detailed herein and in the contractor’s complete research proposal. The contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform this service as defined in this SOW. The contractor shall perform to the standards identified in this contract.

4.4 The contractor will compile data related to podcasts and user-generated videos from sources including, but not limited to, YouTube and the iTunes store. The core objective is to produce a well-documented and authoritative database describing these emerging entertainment mediums. The research will provide Advocacy, as well as outside researchers, a window into the history of this subsector and a benchmark against which to compare future developments.

4.5 The research will specifically illuminate trends in the levels and variances of variables such as ad revenue, ad prices, viewership, listeners, market share, and other economic measures across time.

4.6 Proposal Expectations

4.6.1 Proposals must include a detailed list of elements which the contractor reasonably expects to furnish in the final report. The list must be based on the Components of Finished Research, described below, but it need not contain all these elements nor is it constrained to those suggested.

4.6.2 Proposals offering only partial fulfillment of the Components of Finished Research WILL BE considered. A realistic and detailed proposal promising partial fulfillment is preferred to an overly-ambitious and vague proposal promising fulfillment of all components.

4.6.3 Proposals should clearly identify the inclusion or exclusion of each variable.

4.6.4 With respect to each variable in the proposed final dataset, the contractor must include the following information:

• Proposed sources and/or methodology for obtaining data

• Frequency of data, whether daily, monthly, annual, or otherwise

• Timespan of data. In general, the targeted span is the 10-year period from January 1st, 2005 to December 31st, 2015. Data extending beyond this period are welcomed.

• Whether the data are imputed or otherwise estimated with extrapolation, aggregation, or interpolation. 9

• Whether or not the contractor expects to make any payments for data procurement. Costs of data procurement must be included in quotation.

• Expected costs or quotes from third party data providers

4.7 Components of Finished Research

4.7.1 Variables

• A Variable Definitions Section should separately provide both succinct and extended definitions for each variable. Extended definitions will include references to sources and any limitations or notable methodological considerations.

• YouTube variables o Overall YouTube views o Overall hours watched o Number of YouTube channels o Number of active YouTube channels (i.e. number of channels sharing new content within the period) o Number of YouTube channels qualifying as non-businesses o Number of YouTube channels qualifying as small businesses o Number of YouTube channels qualifying as large businesses o Overall views of YouTube channels earned by each group: non-businesses, small businesses, and large businesses (as defined o Number of YouTube channels earning more than $10,000 in annualized ad revenue

(e.g. the number earning more than $833 per month) o Overall views of YouTube channels earning more than $10,000 in annualized ad revenue o Percent of YouTube channels earning more than $10,000 in annualized ad revenue

(e.g. the number earning more than $833 per month) by each group: non-businesses, small businesses, and large businesses o Number of channels showing ads o Number of views containing ads o Total time spent watching ads o Average revenue per 1000 banner ads o Average revenue per 1000 video ads o Average revenue per thousand impressions (RPM). This measure is defined by

Google as the estimated earnings one accrues for every 1000 “impressions” o Miscellaneous variables potentially relevant to future research

9 For example, suppose exactly 10 podcast episodes contained advertising in 2015 and each episode had only one

ad. The Atlantic estimated the ad prices between $25 and $40 for every thousand podcast listeners. If each episode had exactly 1000 listeners, a reasonable estimate of total revenue could be calculated by assuming uniformly distributed prices and applying arithmetic: ($25+$40)/2 = $32.5 per 1000 listeners and thus $325 in total revenue.

• iTunes Podcast variables o Number of podcasts available on iTunes o Number of podcast episodes available on iTunes o Number of active podcasters (i.e. number of podcasters sharing new content within the period) o Number of podcasts qualifying as non-businesses o Number of podcasts qualifying as small businesses o Number of podcasts qualifying as large businesses o Overall downloads of podcasts earned by each group: non-businesses, small businesses, and large businesses (as defined o Percent of podcasts earning more than $10,000 by each group: non-businesses, small businesses, and large businesses o Overall podcast episodes downloaded o Overall paid podcast episodes downloaded o Overall hours of podcasts downloaded o Number of podcasts paid for advertising o Number of podcasts charging for downloads o Number of episodes charging for downloads o Average revenue per 30 second advertisement o Average price per podcast downloaded among pay for download podcasts o Miscellaneous variables potentially relevant to future research

4.7.2 Methodology

The methodology should carefully

• describe the sources of all data

• describe any truncation of the universe of content providers.

• describe any proposed changes to the methodology. For example, if YouTube content providers generating more than $1,000,000 in any year are systematically excluded from the set of small businesses, then this decision to subset the universe of all potential small businesses must be carefully detailed

• report all calculations performed to arrive at reported values

• report any interpolations, extrapolations, or aggregations

• identify any incomplete series and describe reasons for exclusion

4.7.3 Dataset

• The data, as described above, should be provided in a standard format such as in .CSV or

.XCLS files.

• All data should be available in at least one shared frequency (e.g. monthly). Additional frequencies of raw data, such as daily data, are highly valued and should be included if possible. Interpolations or aggregations of raw data to frequencies besides the shared frequency are unnecessary and should not be included.

• Any missing data should be flagged with reference to the methodology section

5. Performance Requirements

5.1 The methodology and hypotheses put forth in the proposal will clearly show how the research will be conducted, are binding upon award, and are expected to be reflected in the final report. All research team members listed in the proposal, including but not limited to subject matter and technical experts, will actively contribute through the performance of this services. The resulting final submission will fully document the analysis and conclusions to fully support the position asserted.

5.2 The final product should contain a thorough review of the current and relevant literature, discussion of the data and findings, and overall conclusions. The report should demonstrate policy relevance to current issues and demonstrate a significant contribution to the literature or data universe. . Deliverables as listed in the final deliverable schedule will reflect reasonable progress toward the final product and should be submitted according to final product formatting requirements, meaning all deliverables should be thoroughly proofread and edited, written clearly and concisely and free of grammatical and typographical errors. For other details on the final product, see the “Deliverables” and “Performance Requirement Summary” sections that follow.

6. Deliverables

6.1 Specific deliverables and a deliverable schedule shall be finalized following the award of the contract and shall be mutually agreed upon by the Contractor, Contracting Officer, and Contracting Officer Representative at the Kick-off meeting for the contract. The deliverables and deliverable schedule shall be based on the milestones identified in this section, the accepted proposal, and the specific term of the contract upon award, including specific due dates within the contract term. The final deliverable schedule shall be formally amended to the contract through a modification.

Deliverables Due Date Format For Written Submissions

Transition Method Transmitted to Whom

Post Award Conference

10 business days after award

N/A -- Phone Conference

N/A CO and COR

Monthly progress reports

3rd business day of the month following initial award and each month thereafter

Microsoft Word document

Via Email COR

Discussions on reports/submittals

As scheduled by request of the COR

N/A -- Phone Conference

N/A COR/Vendor

I. Report detailing the data collection design including exhaustive lists of sources and costs (if any), as well as a data integration timeline

Months 1-2 of contract term

Microsoft Word documents and/or Microsoft Excel spreadsheets (no Adobe Acrobat PDF files or locked files)

Via Email COR

II. Preliminary dataset including notes describing any omissions.

Months 3-4 of contract term

Relational tables (i.e. CSV or XLS files) are preferred. Non-relational database formats may be accepted with prior COR approval.

Via Email COR

III. Preliminary dataset feedback

Month 4 of contract term

Microsoft Word documents and/or Microsoft Excel spreadsheets (no Adobe Acrobat PDF files or locked

Via Email Vendor

IV. Proposed final dataset

Months 4-5 of contract term

Relational tables (i.e. CSV or XLS files) are preferred. Non-relational database formats may be accepted with prior COR approval.

Via Email COR

V. Proposed final dataset feedback

Month 5 of contract term

Microsoft Word documents and/or Microsoft Excel spreadsheets (no Adobe Acrobat PDF files or locked

Via Email Vendor

VI. Final dataset

Month 6 of contract term

Relational tables (i.e. CSV or XLS files) are preferred. Non-relational database formats may be accepted with prior COR approval.

Via Email COR

6.2 Progress of Deliverables. Deliverables must show significant progress relative to each previous deliverable and must be consistent with the requirements in Section

7.1.7 of the Statement of Work. SBA’s Office of Advocacy will not cover the costs associated with rejected deliverables.

6.3 Acceptance of Deliverables. The Contracting Officer Representative (COR) shall review submitted deliverables over a reasonable amount of time and shall make an express determination of whether to accept or reject the deliverable. Acceptance of deliverables may be contingent upon whether timely and accurate incorporation of COR feedback has been incorporated.

7. Performance Requirement Summary

7.1 Contractors must adhere to the following when submitting drafts and the final report, with the final version completed not more than one year from the date of award:

7.1.1 Adherence to Contract Terms. All submissions will be presented by the prescribed timelines; presented under the prescribed methodology; in the prescribed format to the contracting officer’s representative (COR). Documents shall be clearly annotated and/or identified as either a draft or a final document.

7.1.2 Deliverables. The contractor will provide the Office of Advocacy with an electronic version of the final report within twelve months from the contract start date.

The research is expected to progress along the timeline and benchmarks as noted in the Deliverables section.

7.1.3 Contract Team.

7.1.3.a Key Personnel. Key personnel shall have the technical skills requisite to the project. This requires a minimum of advanced technical training in applied economic and econometric analysis and demonstrated experience as subject matter experts. For example, a Ph.D. in Economics or survey methodology would be considered acceptable. Offerors shall submit resumes that demonstrate these minimum qualifications for key personnel, such as project leads.

7.1.3.b Changes in Contract Team. Changes in Contract Team. Contractors must seek prior written approval from the contracting officer and COR before any changes are implemented among the key personnel and other staff listed in the proposal. Individuals that the contractor proposes to use as replacements for those listed in the proposal shall satisfy the personnel experience requirements contained in the solicitation and the contractor must provide resumes for each proposed replacement as part of its request for prior written approval.

7.1.4 Paperwork Reduction Act Requirements. When surveys or new information collections are necessary, contractors must meet the requirements of the Paperwork Reduction Act where applicable. In order to do so, the contractor will need to anticipate within the performance term the required public notice and OMB review for information collections under the PRA. The creation of a new information collection will require the contractor to develop survey procedures; identify appropriate respondents;

provide clarification of the collection process; provide realistic estimates of the response rates; and work to develop an appropriate survey instrument (see http://www.whitehouse.gov/omb/inforeg_infocoll). It is the contractor’s responsibility to prepare any materials necessary to obtain PRA clearances associated with the work to be performed.

7.1.5 Data Quality and Transparency Requirements. All research and data projects are subject to the Office of Management and Budget Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by Federal Agencies (http://www.whitehouse.gov/sites/default/files/omb/assets/omb/fedreg/reproducible2 .pdf). Per these guidelines, data source disclosure and robustness checks will be required for any research or data project, including all data coding necessary to replicate findings and datasets derived through coding and query and used in support of analysis, unless otherwise limited by special access agreements. Peer review may range from internal Advocacy staff review to that of external reviewers in relevant fields such as academics or technical experts. Feedback from this process will be incorporated into subsequent drafts before the report can be finalized for release.

7.1.6 Data Rights. Rights in Data under FAR 52.227-14-15 shall apply.

7.1.7 Editing and Proofreading Requirements. The documented submissions related to the post award service, including the final report and all intervening deliverables, must be thoroughly edited and of high professional quality before submission to the COR. These high professional quality drafts and reports should include professional language, presentation, and citations commensurate with published research in academic journals in the relevant subject matter field and should be free of typographical and grammatical errors.

7.1.8 Style Requirements. The final report must contain an executive summary and table of contents. It must conform to the current version of one of the major style guides, such as the University of Chicago Manual of Style or the American Psychological Association (APA) Style Manual, in terms of grammar, style, and organization. In particular, each table and figure must have a source specified on the page; references, footnotes and bibliographies shall be formatted consistent with a major style guide; and all pages shall have page numbers, including tables and figures.

7.1.9 ADA Section 508 Requirements. All government agency electronic and information technology (EIT) is required to comply with the Americans with Disabilities Act of 1990 (ADA). Section 508 of the ADA’s 1998 amendments requires the electronic documents posted by Federal agencies to be accessible to employees and members of the public with disabilities to the extent that it does not pose an “undue burden.” To comply with this mandate, the final report must be formatted in accordance with Section 508 requirements. The according to the Office of Advocacy will provide guidance to achieve 508 compatibility at the time of award; however, it is ultimately the contractor’s responsibility to provide all deliverables in accordance with the legal requirements for section 508 compliance. Per the guidelines, written descriptions of all figures and charts in the final report must be provided in a separate document.

7.1.10 Formatting Requirements. Final reports must be double-spaced. The format of the electronic version must be a native word processing software format. An Acrobat (PDF) file is not acceptable. All tables, graphics, and charts must be supplied in an editable software format. The font size used in the document will be no smaller than 12 point for manuscript text; 10 point for tables, graphics and charts; and 9 point for footnotes.

7.1.11 Disclaimer. The Office of Advocacy will prepare a cover page carrying the following disclaimer, "The statements, findings, conclusions, and recommendations found in this study are those of the authors and do not necessarily reflect the views of the Office of Advocacy, the United States Small Business Administration, or the United States Government.”

7.1.12 Release. If the contracted product is a complete publishable report, following approval and acceptance of the final report, the Office of Advocacy will assign a date for public release of the report. Upon release, an electronic final report, along with an Office of Advocacy-prepared research summary, will be posted on Advocacy's web site, http://www.sba.gov/advocacy/847, and the report also will be available for sale at cost through the National Technical Information Service.

7.1.13 Definition of Small Business. The definition of small businesses should be the same as that of the proposal and should be consistent with either the general definition of small businesses (less than 500 employees), the definition of small business established by the U.S. Small Business Administration’s Office of Size Standards, or a reasonably justified definition of small business as substantiated in the contractor’s proposal.

7.1.14 Future Publication and Attribution. The Office of Advocacy encourages contractors to publish their findings in professional journals, if possible, but they can do so only after completing the contract. Prior to publication the Contractor must approach the Contracting Officer Representative regarding attribution to the Office of Advocacy.