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Abstract
Profit distribution in sequential innovation is a crucial yet relatively unexplored area of empirical research. With novel cross-section data from the game live-streaming industry, we are the first to assess the contribution shared by initial and follow-on innovators empirically. Unlike the complex innovation paths of patents, the copyright structure within the game live-streaming industry is clear and concise, enabling direct measurement of innovation value. At the industry’s average level, the share stands at 1:2 between game producers and streamers. This measurement remains robust even after controlling for income levels and distinguishing between professionals and amateurs. Nevertheless, significant heterogeneity exists across different game genres. We suggest that a balanced distribution scheme between initial and follow-on innovators should seriously consider their contribution shares.
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