Direct and Indirect Spillovers from Content Providers’ Switching: Evidence from Online Livestreaming

Abstract

Content providers in online social media platforms, particularly livestreaming, often switch content categories. We propose a theory-based framework to study the direct and indirect spillover effects of content switching for livestreamers—individuals who broadcast content through livestreaming platforms. Contrary to conventional wisdom, we propose two positive spillover effects that are unique to the social media platform setting: (a) the entrant streamers do not just increase competition among streamers, but they also bring their own viewers to the new category (direct spillover), and (b) the entrant streamers influence incumbent streamers’ viewer size by boosting category visibility through indirect network effects (indirect spillover). We also propose that the two spillover effects are contingent on the size of the entrant streamers’ follower base. Our findings show that average content switching is associated with a 1.3% net increase in direct net viewer flow and a 2.6% net increase in indirect net viewer flow. Our results provide managerial implications for livestreaming platforms on how to maintain a healthy and fair community among streamers, such as encouraging popular streamers to switch to a category with many promising small streamers.