The Economics of Online Live Video Streaming

With the rise of live streaming in popular culture, it has begun to attract interest from the research community. Despite recent research focusing on understanding the behaviors of people engaging live streaming and motivations behind them, we know little about how live streaming affects commercial aspects of modern life. In this paper, we establish a causal relationship between the adoption of live streaming strategy by online retailers and online product sales. The initial results indicate that adopting live video streaming strategy significantly boosts online product sales. By classifying the live videos with a deep learning approach, we find that the adoption of a selling-orientated live video streaming strategy significantly increases the online product sales, while there is no such impact for adopting a life-orientated live video streaming strategy. We further find that the impact of selling-orientated live videos is moderated as the existing buyer’s uncertainty decreases. This work is the first empirical study, to the best of our knowledge, that quantifies the effect of adopting live streaming strategy on online sales.