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

This article examines the impact of introducing midroll advertisements (MRAs)—short commercial breaks during live streams—on audience consumption behaviors on a live streaming platform. Using a large dataset of over 12 million observations and a difference-in-differences approach, the study finds that granting partnered streamers the ability to display MRAs leads to significant increases in average viewership and total hours watched. This positive effect is attributed to streamers’ strategic adjustments, including increased airtime and improved stream quality, motivated by the potential for ad revenue, which outweighs typical ad avoidance behaviors. The study also identifies heterogeneity in these effects based on streamer success, tenure, content sociability, and cultural context, with low-success, established, social-content streamers in collectivist cultures showing the largest consumption gains. These findings have implications for platforms, streamers, and brands regarding ad implementation strategies and revenue optimization in the live streaming ecosystem.