I always felt it went by # of Installs. While ratings would tend to roughly follow, it possible a channel might have 70 reviews with more installs than a channel with 200. Also, if a developer is reputable with several other high ranking channels, their other channels may stay higher. Examples like ESPN or CNN having multiple channels (CBS News, CBS Sports etc) but also take for example a game developer. If they create the #1 chess game, then later create a blackjack game, that may trend ranking higher (possibly).
On the flip side though, I'm not sure how thorough the algorithm is. Possibly after a certain percent of high ranking channels it lumps them together, possibly by date created. Whether it continues as a formula of date created value, versus reviews/installs/viewing time I dunno. Again, I think it goes by installs, but tbh I have never heard. I know it stays in 'New & Notable' for about 60 days and during that time I'd had a good amount of installs, and once removed they significantly do slow down.