Understanding the Nature and Effects of Content Providers’ Switching Behaviors: Evidence from Online Live Streaming

With the increasing prevalence of live streaming services, intensive competition has emerged among streamers on live streaming platforms. In the meantime, as a highly skewed market, live streaming also suffers from competitive bias toward popular streamers, leading to a potential loss of small streamers. As such, there is an urgent need for streamers and platforms to address this challenge. In this study, we examine competition among live streamers through the lens of content switching—an exogenous entry of streamers into a new category that streams different content. This content switching not only has a direct impact on the audience size of incumbent streamers, but it also indirectly influences incumbent streamers’ audience size by improving category visibility, thereby creating advantages (or disadvantages) for the incumbent. Based on the unique dataset of channel information and the viewer lists drawn from the live streaming platform Twitch.tv, we empirically examine how content switching impacts audience viewing choices for incumbent channels. Our results suggest that star entrant streamers increase incumbent audiences rather than reduce incumbents’ audience size, which contradicts the “poor-become-poorer” contention in the skewed market context. One of the main reasons behind this positive spillover effect is because incumbent streamers can actually benefit from the audience drawn from other categories due to the higher visibility of the entire category. In addition, small incumbent streamers benefit more from the entry of star streamers. However, the spillover effect of content switching becomes significantly negative for small entrants due to the increased competition intensity. This study contributes to literature in the live streaming community from a dynamic and empirical perspective and also offers actionable suggestions for streaming strategy and online advertising.