EXPRESS: More Ads, More Viewers? Analyzing Behavioral Shifts from Advertising Permissions to Live Streaming Consumption

There has been little exploration on how audience content consumption may change in response to advertising permissions on live streaming platforms. Ads are utilized by brands to generate revenue through ad exposure, but is this benefit thwarted by the reduction of audience consumption of content? Using a dataset containing over 12 million observations in the live streaming space and a difference-in-differences estimation approach, we study the effects of a policy intervention by a live streaming platform which provided (some) streamers the ability to display mid-roll advertisements (MRAs). Although the ad avoidance literature infers that ad-supported content should be viewed unfavorably by audiences, our results indicate that providing the mere ability to introduce MRAs has a notable positive effect on live streaming content consumption (average viewership and total hours watched). We discover that a viable explanation for this response is through increases in broadcasting airtime, stream frequency (somewhat) and quality by streamers after the intervention, as these adjustments are drastically easier to implement in a live streaming setting when compared to more “traditional” forms of media. We further explore heterogeneity in these effects in relation to initial success, streaming tenure, content activity, culture (of the streamer), and impact across time.